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USAID Information:
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Eritrea
The Development Challenge: Eritrea remains one of the world's poorest countries, ranking 157th out of 173 countries in the UN Human Development Index. In 2003, the Government of the State of Eritrea (GSE) faced the worst drought in the country's 10-year history as it continued its attempts to revive the economy and restore infrastructure damaged by the 1998-2000 conflict with Ethiopia. International Monetary Fund (IMF) data show a gross domestic product (GDP) per capita of $153 in 2002. Macroeconomic indicators show GDP declining by 1.2% in 2002, consumption in local currency (nakfa) falling since 2002 to below the 1997 level, and the budget deficit (excluding grants) at 42.5% of GDP in 2002. According to the IMF, Eritrea currently has minimal foreign exchange reserves. Household coping mechanisms and safety nets have been eroded as a result of the drought and the continued large-scale military mobilization that deprives tens of thousands of households of able-bodied family members.
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Eritrea faces a number of daunting social challenges. An estimated 66% of households live below the poverty level. Illiteracy rates are high at 42% of the population. Life expectancy is only 51 years. The HIV/AIDS prevalence is moderate at around 3%, but the disease already strains Eritrea's limited trained human resource base and fledgling institutional capacity. Without vigorous preventive programs, demobilization could spread HIV/AIDS very rapidly.
The border demarcation has been delayed and the 200,000 soldiers are yet to be demobilized causing serious shortages of skilled labor across all sectors of the economy. Peace with Ethiopia remains fragile until the Eritrea Ethiopia Boundary Commission's decision is finally and fully implemented by both countries.
Eritrea remains chronically food insecure, and is likely to remain so for the foreseeable future, as severe drought conditions persist. Some 80% of recently surveyed households received some form of food aid in 2003. Domestic food production is a very low fraction of total consumption requirements. For example, in 2002, the worse year for agriculture since independence, cereal production amounted to only 57,000 metric tons vs. a national consumption requirement of 612,000 metric tons; although meteorological conditions improved in 2003, cereals production increased to less than 120,000 metric tons.
The ruling People's Front for Democracy and Justice (PFDJ) is the only legal political party and also dominates commercial activities. In addition, since 2001, the GSE has controlled domestic media outlets.
Key United States' interests in Eritrea are fostering regional stability, combating terrorism, promoting a democratic system of governance where human rights and religious freedom are respected, providing humanitarian relief and encouraging economic development.
The USAID Program: The USAID/Eritrea strategic objectives support the joint State-USAID strategic goals. USAID/Eritrea's development strategy (2003-2007) will achieve results in three areas: health, education capacity building, and increasing familial resiliency to reduce chronic food insecurity in rural areas.
The health program has achieved dramatic gains in child survival that will be challenging to sustain during the post-conflict transition. Maternal health has improved more slowly than child health. Planned demobilization of soldiers makes the next two years the critical time for preventing an explosion of the HIV/AIDS epidemic. Therefore, the health program will increase quality and demand for HIV/AIDS prevention services, expand active demand for primary health care, especially at the community level, continue to improve the quality of primary health services, and improve institutional capacity for resource allocation and management.
To improve rural livelihoods, USAID/Eritrea will continue to provide credit and consulting services to small and medium enterprises, improve access to safe water, rebuild key infrastructure in border areas, and assist the most vulnerable populations through a micro-lending activity.
USAID/Eritrea will also continue to enhance the capacity of Eritreans to participate more actively in the growth and development of their country. Activities under this program will provide skill-based training in targeted sectors, improve access to basic education, strengthen institutions of higher learning, enhance access to information through the Internet, and develop community-based organizations.
Other Program Elements: In FY 2003, USAID's Education for Development and Democracy Initiative implemented a pilot girls' education program through which 80 middle-school girls, who otherwise would have dropped out of school, received scholarships and access to tutoring services. USAID/Eritrea has also received funds from the Africa Bureau's Conflict and Peace Building Fund to undertake activities for conflict prevention. These funds are used to create new income generation opportunities for the youth population and develop new business and vocational skills in productive sectors to facilitate the reintegration of the large displaced and refugee populations returning from Sudan and, thereby, avert potential internal conflict. Funding from the Muslim Education Initiative will support activities to improve access to basic education in underserved and minority populations. In response to the drought, USAID's Office of Foreign Disaster Assistance (OFDA) and Food for Peace (FFP) provided resources to mitigate the impact of drought. OFDA funding has been critical for rehabilitation and expansion of rural water systems. USAID/Eritrea is using Economic Support Funds (ESF) received in FY 2003 to support reconstruction of infrastructure in war-affected border areas.
Other Donors: The World Bank and the European Union (EU) are Eritrea's largest donors, in addition to the United States. The World Bank supports education, health, and demobilization. The EU provides humanitarian assistance to war-affected and drought-prone areas for agriculture production, energy, water and sanitation. Other donors are Italy, the Netherlands, Denmark, China, Germany, Japan, France, Ireland, and Cuba. The UN agencies support health, education, and humanitarian recovery programs.
USAID/Eritrea collaborates closely with the World Bank and the European Commission in responding to needs in the health, education, and agriculture sectors, as well as those of a humanitarian nature. In addition, the Mission works closely with UN agencies, including UNICEF, UNAIDS, and WHO, to implement health, nutrition, and HIV/AIDS activities.
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