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Country Commercial Guides FY 2000: Eritrea Report prepared by U.S. Embassy Asmara, released July 1999 Note*

CHAPTER III: POLITICAL ENVIRONMENT

NATURE OF POLITICAL RELATIONSHIP WITH THE U.S.: ERITREA AND THE UNITED STATES HAVE A STRONG BILATERAL RELATIONSHIP. THE VISIT OF FIRST LADY HILLARY RODHAM CLINTON TO ASMARA IN APRIL 1997 IS A DEMONSTRATION OF THE U.S. COMMITMENT TO ENHANCE BILATERAL RELATIONS. THE U.S. PROVIDED U.S. $350 THOUSAND IN DIRECT SUPPORT OF THE ERITREAN REFERENDUM FOR INDEPENDENCE IN 1993, AS WELL AS A VARIETY OF OTHER ASSISTANCE. USAID PROGRAMS PROVIDE ASSISTANCE IN THE AREAS OF HEALTH, REFUGEE RESETTLEMENT, AND GOVERNMENT AND UNIVERSITY TRAINING PROGRAMS, SMALL ENTERPRISE DEVELOPMENT, AND EMERGENCY FOOD ASSISTANCE. THE U.S. ALSO SUPPORTS FINANCING FOR REGIONAL PROJECTS THAT BENEFIT THE AREA SUCH AS LOCUST CONTROL PROGRAMS AND EARLY FAMINE WARNING SYSTEMS. IN 1998 USAID ALLOCATED U.S. $9 MILLION, THROUGH THE RURAL ENTERPRISE UNIT, FOR PROVISION OF CREDIT TO PROMOTE SMALL SCALE INDUSTRIAL AND AGRICULTURAL DEVELOPMENT IN THE DISADVANTAGED REGIONS OF THE COUNTRY.

MAJOR POLITICAL ISSUES AFFECTING BUSINESS CLIMATE:

SINCE LIBERATION IN 1991, ERITREA HAS BEEN RECOGNIZED FOR ITS POLITICAL STABILITY, FISCAL RESTRAINT, AND VERY LOW LEVELS OF CORRUPTION. IN DECEMBER 1995, ERITREA FOUGHT AGAINST YEMEN OVER DISPUTED ISLANDS IN THE SOUTHERN PART OF RED SEA. THE HANISH ARCHIPELAGO DISPUTE WAS ADJUDICATED BY AN INTERNATIONAL TRIBUNAL IN 1998 AND BOTH ERITREA AND YEMEN HAVE ACCEPTED THE DECISION OF THE COURT. ERITREA'S RELATIONS WITH SUDAN WERE STRAINED SINCE 1995. THE TWO COUNTRIES HAVE RECENTLY AGREED TO RESTORE DIPLOMATIC TIES AND WORK TOWARDS NORMALIZING BILATERAL RELATIONS. THERE HAVE BEEN SEVERAL HIGH-LEVEL MEETINGS OVER THE PAST FEW MONTHS, WHICH ALSO INCLUDED A SUMMIT MEETING BETWEEN THE PRESIDENTS OF THE TWO COUNTRIES. IN MAY-JUNE 1998, ERITREA AND ETHIOPIA CLASHED OVER DISPUTED BORDER AREAS AFTER ETHIOPIA ACCUSED THE ERITREAN GOVERNMENT OF INVADING ITS TERRITORIES. FIGHTING BROKE OUT AGAIN IN FEBRUARY AND MARCH, 1999 AN AGAIN IN MAY-JUNE 1999. TENSIONS BETWEEN THE NEIGHBORING COUNTRIES REMAIN HIGH BUT THEY HAVE ACCEPTED A PEACE PROPOSAL FORWARDED BY THE OAU. THERE HAS BEEN NO CEASE FIRE AT THE TIME OF WRITING THE CCG. EFFORTS ARE UNDERWAY TO IMPLEMENT A MODALITIES AGREEMENT, WHICH BOTH COUNTRIES ACCEPTED, AT THE OAU ALGIERS SUMMIT IN JULY, 1999.

BRIEF SYNOPSIS OF POLITICAL SYSTEM, SCHEDULE FOR ELECTIONS AND ORIENTATION OF MAJOR PARTIES:

THE ERITREAN PEOPLE'S LIBERATION FRONT, A GUERRILLA GROUP THAT LED THE 30 YEAR DRIVE FOR INDEPENDENCE, TRANSFORMED ITSELF IN FEBRUARY 1994 INTO A POLITICAL PARTY UNDER THE NAME PEOPLE'S FRONT FOR DEMOCRACY AND JUSTICE (PFDJ). THE PFDJ HAS BEEN RULING THE COUNTRY SINCE ITS LIBERATION FROM ETHIOPIA IN 1991. THE COUNTRY'S FIRST CONSTITUTION WAS RATIFIED BY A CONSTITUENT ASSEMBLY IN LATE 1997. THE CONSTITUTION CALLS FOR POLITICAL PLURALISM AND A MULTI-PARTY POLITICAL SYSTEM IN ERITREA. HOWEVER, ERITREA REMAINS A ONE-PARTY COUNTRY WITH NO RECOGNIZED OPPOSITION. OPPOSITION ORGANIZATIONS IN EXILE ARE FOUND MOSTLY IN SUDAN AND INCLUDE THE DIFFERENT FACTIONS OF THE ERITREAN LIBERATION FRONT (ELF) AND THE ERITREAN ISLAMIC SALVATION (EIS). GENERAL ASSEMBLY ELECTIONS, PREVIOUSLY SCHEDULED FOR 1998, ARE NOW POSTPONED INDEFINITELY DUE TO THE BORDER CONFLICT WITH ETHIOPIA. BASED ON THE CONSTITUTION, THE PRESIDENT ILL BE ELECTED FROM THE NEW ASSEMBLY FOR A FIVE-YEAR MANDATE AND CAN SERVE A MAXIMUM OF TWO TERMS.