In most successful economies, it is observed that the private sector has been the driving force for employment creation and economic development. The private sector is particularly innovative when offered a conducive environment. This case applied to Eritrea after independence but the opposite has happened in the recent past in a number of areas such as finance, foreign exchange, utility services, petroleum products and trade; significantly increasing the role of the government in the economy. To reduce the burden of the Government, create employment opportunities and boost the economy, Eritreans in Diaspora have to invest substantially in their motherland.
In the past, Eritrea benefited substantially from Diaspora financing, which brought the country much-needed foreign exchange. This support has been mainly guided by family relationships and patriotism. On the other hand, it has also been increasingly viewed as an investment in the country. As the latter element increases in importance, the soundness of government policies and the performance of the economy will increasingly condition the preparedness of the Diaspora to make savings available to the country and influence the sustainability of the public finances.
Diaspora’s important role in public finances and foreign exchange is evident. For example; the level of bonds issued to the Diaspora reached 3.1 per cent of GDP in 1999. On the external account, private transfers from the Diaspora are the largest single source of foreign currency inflows into Eritrea, with the ratio of these transfers to GDP averaging 37 per cent over the last twelve to thirteen years. These levels of Diaspora financing are clearly exceptional, providing an impetus to the economic development of Eritrea.
Eritrea can set up economic zones exclusively for Non-Resident Emigrants (NREs) to facilitate more investments. The Eritrean Government can think positively about setting up economic zones after interacting with the NRE industrialists and investors interested in investing capital in their home country. These economic zones can be set up in every state capital such as Asmara, Berentu, Mendefera, Keren, Massawa, Asseb, Adiguadat and Adinefas. The economic zones should be set up on a priority basis in the capitals of Maakel Anseba, Debub, Northern Red Sea, and Southern Red Sea, as these zobas/provinces account for a large number of people of the Eritrean Diaspora. These economic zones should have state of the art infrastructure, hotels, motels, higher educational institutions, IT industry and research centers. The new Massawa International Airport, which is believed to be one of the major impetuses to investment and development in Eritrea should be modernized. Embassies and consular offices in different countries and Eritrean National chamber of Commerce and other departments or agencies should organize the interaction among the Eritrean community in Diaspora.
The Government should work with various line ministries to create opportunities for the NRE scientists/ professionals keen to work in the country like it is doing to attract some professionals to Eritrean Institute of Technology- Mainefhi. It should work out a package to attract NRE investment in tourism, education and facilitate transfer of technology with local Eritreans. According to the available statistics, Eritrean Diaspora could invest substantial amount in the country projects. Both fiscal and external sustainability depend critically on the continued support of the Diaspora.
Some Eritreans in the US, Europe and Saudi Arabia are very rich. The government has to create conditions to make them invest back in their country. In the meantime, the government has to be committed to protect the interests of NREs. In fact, it is for this purpose that a separate department can be established as a nodal point to address all issues related to the Diaspora. For all the NREs who want to invest, a single window clearance system should be introduced both at the national level and in all the zobas. This will certainly save time for the NREs. Otherwise, NREs have to run around for seven to eight months to get clearances.
The Eritrean NREs or investors ought to know that their investments can create new job opportunities that will help their own people, thereby improving the infrastructure of Eritrea in a big way. Countries such as China, India and Israel created conditions to facilitate their Diaspora to invest back. Eritreans in Diaspora can also join their hands in building the strong and multifaceted economy of Eritrea.
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