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Economy
(Statistics prior to 1992 are extrapolated from Ethiopian data)

Real GDP (2000): $608 million.
Annual growth rate (2000): -8.2%
Per capita income: Less than $200 per year. On a purchasing power parity basis, it is $750.
Avg. inflation rate (CPI, Asmara, end of period): 27% in 2000, 15% in 2001.
Mineral resources: Gold, copper, iron ore, potash, oil.
Agriculture (22.1% of GDP in 1990): Products--millet, sorghum, teff, wheat, barley, flax, cotton, coffee, papayas, citrus fruits, bananas, beans and lentils, potatoes, vegetables, fish, dairy products, meat, and skins. Cultivated land--10% of arable land.
Industry (29.6% of GDP in 1990): Types--processed food and dairy products, alcoholic beverages, leather goods, textiles, chemicals, cement and other construction materials, salt, paper, and matches.
Trade: Exports (1996)--$48 million: skins, meat, live sheep and cattle, gum arabic. Major markets--Ethiopia, Saudi Arabia, Italy. Imports (1994)--$360 million: food, manufactured goods, machinery and transportation equipment. Major suppliers--Saudi Arabia, Ethiopia, Italy, UAE.

GEOGRAPHY
Eritrea is located in the Horn of Africa and is bordered on the northeast and east by the Red Sea, on the west and northwest by Sudan, on the south by Ethiopia, and on the southeast by Djibouti. The country has a high central plateau that varies from 1,800 to 3,000 meters (6,000-8,000 feet) above sea level. A coastal plain, western lowlands, and some 300 islands comprise the remainder of Eritrea's land mass. Eritrea has no year-round rivers.

The climate is temperate in the mountains and hot in the lowlands. Asmara, the capital, is about 2,300 meters (7,500 ft.) above sea level. Maximum temperature is 26^o C (80^o F). The weather is usually sunny and dry, with the short or belg rains occurring February-April and the big or meher rains beginning in late June and ending in mid-September.

PEOPLE
Eritrea's population comprises nine ethnic groups, most of which speak Semitic or Cushitic languages. The Tigrinya and Tigre make up four-fifths of the population and speak different, but related and somewhat mutually intelligible, Semitic languages. In general, most of the Christians live in the highlands, while Muslims and adherents of traditional beliefs live in the lowland regions. Tigrinya and Arabic are the most frequently used languages for commercial and official transactions, but English is widely spoken and is the language used for secondary and university education.

HISTORY
Eritrea officially celebrated its independence on May 24, 1993, becoming the world's newest nation. Prior to Italian colonization in 1885, what is now Eritrea had been ruled by the various local or international powers that successively dominated the Red Sea region. In 1896, the Italians used Eritrea as a springboard for their disastrous attempt to conquer Ethiopia. Eritrea was placed under British military administration after the Italian surrender in World War II. In 1952, a UN resolution federating Eritrea with Ethiopia went into effect. The resolution ignored Eritrean pleas for independence but guaranteed Eritreans some democratic rights and a measure of autonomy. Almost immediately after the federation went into effect, however, these rights began to be abridged or violated.

In 1962, Emperor Haile Sellassie unilaterally dissolved the Eritrean parliament and annexed the country, sparking the Eritrean fight for independence that continued after Haile Sellassie was ousted in a coup in 1974. The new Ethiopian Government, called the Derg, was a Marxist military junta led by strongman Mengistu Haile Miriam.

During the 1960s, the Eritrean independence struggle was led by the Eritrean Liberation Front (ELF). In 1970, members of the group had a falling out, and a group broke away from the ELF and formed the Eritrean People's Liberation Front (EPLF). By the late 1970s, the EPLF had become the dominant armed Eritrean group fighting against the Ethiopian Government, and Isaias Afwerki had emerged as its leader. Much of the materiel used to combat Ethiopia was captured from the Ethiopian Army.

By 1977 the EPLF was poised to drive the Ethiopians out of Eritrea. That same year, however, a massive airlift of Soviet arms to Ethiopia enabled the Ethiopian Army to regain the initiative and forced the EPLF to retreat to the bush. Between 1978 and 1986, the Derg launched eight major offensives against the independence movement -- all failed. In 1988, the EPLF captured Afabet, headquarters of the Ethiopian Army in northeastern Eritrea, prompting the Ethiopian Army to withdraw from its garrisons in Eritrea's western lowlands. EPLF fighters then moved into position around Keren, Eritrea's second-largest city. Meanwhile, other dissident movements were making headway throughout Ethiopia. At the end of the 1980s, the Soviet Union informed Mengistu that it would not be renewing its defense and cooperation agreement. With the withdrawal of Soviet support and supplies, the Ethiopian Army's morale plummeted, and the EPLF -- along with other Ethiopian rebel forces -- began to advance on Ethiopian positions.

The United States played a facilitative role in the peace talks in Washington during the months leading up to the May 1991 fall of the Mengistu regime. In mid-May, Mengistu resigned as head of the Ethiopian Government and went into exile in Zimbabwe, leaving a caretaker government in Addis Ababa. Having defeated the Ethiopian forces in Eritrea, EPLF troops took control of their homeland. Later that month, the United States chaired talks in London to formalize the end of the war. These talks were attended by the four major combatant groups, including the EPLF.

A high-level U.S. delegation also was present in Addis Ababa for the July 1-5, 1991 conference that established a transitional government in Ethiopia. The EPLF attended the July conference as an observer and held talks with the new transitional government regarding Eritrea's relationship to Ethiopia. The outcome of those talks was an agreement in which the Ethiopians recognized the right of the Eritreans to hold a referendum on independence.

Although some EPLF cadres at one time espoused a Marxist ideology, Soviet support for Mengistu had cooled their ardor. The fall of communist regimes in the former Soviet Union and the Eastern Bloc convinced them it was a failed system. The EPLF now says it is committed to establishing a democratic form of government and a free-market economy in Eritrea. The United States agreed to provide assistance to both Ethiopia and Eritrea, conditional on continued progress toward democracy and human rights.

In May 1991, the EPLF established the Provisional Government of Eritrea (PGE) to administer Eritrean affairs until a referendum was held on independence and a permanent government established. EPLF leader Isaias became the head of the PGE, and the EPLF Central Committee served as its legislative body.

On April 23-25, 1993, Eritreans voted overwhelmingly for independence from Ethiopia in a UN-monitored free and fair referendum. The Eritrean authorities declared Eritrea an independent state on April 27. The government was reorganized and after a national, freely contested election, the National Assembly, which chose Isaias as President of the PGE, was expanded to include both EPLF and non-EPLF members. The EPLF established itself as a political party, the People's Front for Democracy and Justice (PFDJ), and is now in the process of drafting a new constitution and setting up a permanent government.

GOVERNMENT
The new government faces formidable challenges. Beginning with no constitution, no judicial system, and an education system in shambles, it has been forced to build the institutions of government from scratch. The present government includes legislative, executive, and judicial bodies.

The legislature, the National Assembly, includes 75 members of the PFDJ and 75 additional popularly elected members. The National Assembly is the highest legal power in the government until the establishment of a democratic, constitutional government. The legislature sets the internal and external policies of the government, regulates implementation of those policies, approves the budget, and elects the president of the country.

The president nominates individuals to head the various ministries, authorities, commissions, and offices, and the National Assembly ratifies those nominations. The cabinet is the country's executive branch. It is composed of 17 ministers and chaired by the president. It implements policies, regulations, and laws and is accountable to the National Assembly. The ministries are agriculture; defense; education; energy and mines; finance; fisheries; foreign affairs; health; information; labor and human welfare; land, water, and environment; local governments; justice; public works; trade and industry; transportation and communication; and tourism.

Nominally, the judiciary operates independently of both the legislative and executive bodies, with a court system that extends from the village through to the district, provincial, and national levels. However, in practice, the independence of the judiciary is limited. In 2001, the President of the High Court was fired after criticizing the government for judicial interference.

On May 19, 1993, the PGE issued a proclamation regarding the reorganization of the government. It declared that during a four-year transition period, and sooner if possible, it would draft and ratify a constitution, prepare a law on political parties, prepare a press law, and carry out elections for a constitutional government. In March 1994, the PGE created a constitutional commission charged with drafting a constitution flexible enough to meet the current needs of a population suffering from 30 years of civil war as well as those of the future, when stability and prosperity change the political landscape. Commission members traveled throughout the country and to Eritrean community’s abroad holding meetings to explain constitutional options to the people and to solicit their input. A new constitution was promulgated in 1997 but has not been implemented, and general elections have not been held. The government had announced that the National Assembly elections would take place in December 2001 but these have been postponed and new elections have not been rescheduled.

In September 2001, after several months in which a number of prominent PFDJ Party members had gone public with a series of grievances against the government and in which they called for implementation of the Constitution and the holding of elections, the government instituted a crackdown. Eleven prominent dissidents, members of what had come to be known as the Group of 15, were arrested and held without charge in an unknown location. At the same time, the government shut down the independent press and arrested its reporters and editors, again, holding them incommunicado and without charge. In subsequent weeks, the government arrested other individuals, including two Eritrean employees of the embassy. All of these individuals remain held without charge and none are allowed visitors.

Principal Government Officials
President of the State of Eritrea; Chairman of the Executive Council of the PFDJ--Isaias Afwerki
Director, Office of the President--Mr. Yemane Gebremiskel
Minister of Defense--H.E.Sebhat Ephrem
Minister of Foreign Affairs—Ali Said Abdella
Minister of Local Government—Vacant
Minister of Finance—Berhane Abrehe

Eritrea maintains an embassy in the United States at 1708 New Hampshire Ave., NW, Washington, DC 20009 (tel. 202-319-1991) headed by Ambassador Ghirma.

ECONOMY
The Eritrean economy is largely based on agriculture, which employs 80% of the population but currently may contribute as little as 22% to GDP.  Export crops include coffee, cotton, fruit, hides, and meat, but farmers are largely dependent on rain-fed agriculture, and growth in this and other sectors is hampered by lack of a dependable water supply. Worker remittances from abroad currently contribute 40% of GDP.

The Government of Eritrea states that it is committed to a market economy and privatization, and it has made development and economic recovery its priorities. Nevertheless, the government or the ruling PFDJ party plays a pervasive role in the economy and the government has imposed an arbitrary and complex set of regulatory requirements that discourage investment. The economy was devastated by war and the misguided policies of the Derg, which disrupted agriculture and industry. The more recent war with Ethiopia has also had a major, negative impact on the economy and further discouraged investment. Eritrea lost many valuable economic assets in particular during the last round of fighting in May-June 2000, when a significant portion of its territory in the agriculturally important west and south was occupied by Ethiopia. As a result of this last round of fighting, more than one million Eritreans were displaced. According to World Bank estimates, Eritreans also lost livestock worth some $225 million and 55,000 homes worth $41 million were destroyed. Damages to public buildings, including hospitals, are estimated at $24 million. Much of the transportation and communications infrastructure remains outmoded and deteriorating. As a result, the government has sought international assistance for a variety of development projects and has mobilized young Eritreans serving in the National Youth Service to repair crumbling roads and dams.

Small businesses, such as restaurants, bars, stores, auto repair, and crafts continue to thrive in the Asmara area. A brewery, cigarette factory, small glass and plastics producers, several companies involved in making leather goods, and textile and sweater factories operate in the Asmara area. The textile and leather industries have made a partial recovery since independence.

In Massawa, the port has been rehabilitated. In addition, the government has begun to export fish from the Red Sea to markets in Europe and elsewhere. Also in Massawa, in 2001, Seawater Farms Eritrea began to export shrimp to Europe and the Middle East. The farm is a joint venture between a group of international investors based in the U.S. and the Eritrean Ministry of Fisheries. It is an integrated project designed to grow shrimp, tilapia, and salicornia (a succulent that can be irrigated with seawater), and to foster the growth of mangrove wetlands. The project is expected to generate a significant volume of exports as well as employment opportunities for Eritreans. The investors also hope that it will serve as the model for a new kind of sustainable, ecologically friendly, yet profitable operation.

DEFENSE
During the war, the EPLF fighting force grew to almost 110,000 fighters, about 3% of the total population of Eritrea. In 1993, Eritrea embarked on a phased program to demobilize 50%-60% of the army, which had by then shrunk to about 95,000. During the first phase of demobilization in 1993, some 26,000 soldiers -- most of whom enlisted after 1990 -- were demobilized. The second phase of demobilization, which occurred the following year, demobilized more than 17,000 soldiers who had joined the EPLF before 1990 and in many cases had seen considerable combat experience. Many of these fighters had spent their entire adult lives in the EPLF and lacked the social, personal, and vocational skills to become competitive in the work place. As a result, they received higher compensation, more intensive training, and more psychological counseling than the first group. Special attention has been given to women fighters, who made up some 30% of the EPLF's combat troops. By 1998, the army had shrunk to 47,000.

The moves to demobilize were abruptly reversed after the outbreak of war with Ethiopia over a contested border. During the war, which is estimated to have generated well over 100,000 casualties among the two sides, the armed forces expanded to close to 300,000 members, almost ten percent of the population. This generated a huge economic burden on the country. The IMF estimates that the economy shrank by more than 8% in 2000, although it is projecting a rebound in 2001. The war ended with a Cessation of Hostilities agreement in June 2000, followed by a Peace agreement signed in December of the same year. A UN Peacekeeping Mission, UNMEE, has been established and monitors a 25-kilometer-wideTemporary Security Zone separating the two sides. Per the terms of the Cessation of Hostilities agreement, two arbitration commissions have been established, one to demarcate the border, and another to weigh compensation claims by both sides. The Border Commission is scheduled to announce its findings in early 2002.

The government has been slow to demobilize its military after the most recent conflict, although it recently formulated an ambitious demobilization plan with the participation of the World Bank. A pilot demobilization program involving 5,000 soldiers began in November 2001 and is scheduled to be followed immediately thereafter by a first phase in which some 65,000 soldiers would be demobilized. However, the demobilization program has not yet been approved by the World Bank and funding for it from other donors is uncertain.

United States military cooperation with Eritrea, which was suspended following the outbreak of hostilities with Ethiopia and a UN embargo on military cooperation with either side, has resumed on a modest basis. U.S. military assistance includes re-establishing a demining training program and the training of Eritrean officers in the United States.

FOREIGN RELATIONS
Eritrea is a member in good standing of the OAU and of COMESA. It has had close relations with the United States, Italy, and a number of other European nations, including the United Kingdom, Germany, Norway, and Denmark, which have become important aid donors. These relations have been jarred as a result of the recent government crackdown against political dissidents and others and the independent press and by the expulsion of the Italian Ambassador to Eritrea.

Eritrea has now renewed diplomatic relations with both Sudan and Djibouti. Relations with Sudan are mixed, however, due to occasional incidents involving the extremist group, Eritrean Islamic Jihad (EIJ), which the Eritrean government believes is supported by the National Islamic Front government in Khartoum and to continued Eritrean support for the Sudanese opposition coalition, the National Democratic Alliance.

U.S.-ERITREAN RELATIONS
The U.S. consulate in Asmara was first established in 1942. In 1953, the United States signed a mutual defense treaty with Ethiopia. The treaty granted the United States control and expansion of the important British military communications base at Kagnew near Asmara. In the 1960s, as many as 4,000 U.S. military personnel were stationed at Kagnew. In the 1970s, technological advances in the satellite and communications fields were making the communications station at Kagnew increasingly obsolete. Early in 1977, the United States informed the Ethiopian Government that it intended to close Kagnew Station by September 30, 1977. In the meantime, U.S. relations with the Mengistu regime were worsening. In April 1977, Mengistu abrogated the 1953 mutual defense treaty and ordered a reduction of U.S. personnel in Ethiopia, including the closure of Kagnew Communications Center and the consulate in Asmara.

In August 1992, the United States reopened its consulate in Asmara, staffed with one officer. On April 27, 1993, the U.S. recognized Eritrea as an independent state, and on June 11, diplomatic relations were established, with a charge d'affaires. The first U.S. Ambassador arrived later that year.

The United States has provided substantial assistance to Eritrea, including food and development. In FY 2001, the United States provided $50.9 million in humanitarian aid to Eritrea, including $40.5 million in food assistance and $8.3 million in refugee support. The U.S. also provided another $10.2 million in development assistance, for a total aid package of $61.1 million.

Ongoing U.S. interests in Eritrea include consolidating the peace with Ethiopia, encouraging progress towards establishing a democratic political culture, supporting Eritrean efforts to become constructively involved in solving regional problems, assisting Eritrea in dealing with its humanitarian and development needs, and promoting economic reform.

Principal U.S. Officials
Ambassador--Donald McConnell
Deputy Chief of Mission--Vicente Valle, Jr.
Political/Military Officer-- Frank Milhous
Consular/Political Officer--Jack Doutrich
Administrative Officer--Virginia Milhous
Public Affairs Officer--Ira Levin
USAID Representative--Jatinder Cheema
Defense Attache--Maj. Christopher Isham
Security Assistance Officer -- Lt. Col. John Sapienza

The address of the U.S. Embassy in Eritrea is 28 Franklin D. Roosevelt Street, P.O. Box 211, Asmara, tel. 291-1-120-004.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled Health Information for International Travel (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including  Background Notes; daily press briefings; Country Commercial Guides; directories of key officers of Foreign Service posts and more.

National Trade Data Bank (NTDB). Operated by the U.S. Department of Commerce, the NTDB contains a wealth of trade-related information. It is available on the Internet (www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more information.