By Teweldeberhan Gebre
Since the ‘no peace, no war’ situation has been set by the inept regime in Ethiopia and its sponsors in the State Department, Eritrea has faced significant exodus of its youth. Unfortunately, many have lost their life in the Sahara Desert and the Mediterranean Sea in a bid to cross into Europe for a better life, and many became victims of human traffickers in the Sinai Peninsula as well. It is well known that two factors play for the massive migration of Eritreans: the push and pull factors. Some of the push factors that force young Eritreans to flee the homeland include economic hardships, indefinite national service, and human rights violations such as freedom of movements and lack of occupational choices, etc. There is no misgiving on the push factors that forced Eritreans to leave their homeland. The Eritrean government tried to curve illegal migration through tightening the borders but miserably failed. Other than that, the government did not take other means to stop or bend the mass and illegal migration and deserves criticism for its fixation of tightened border surveillance for such a long time now.
On the other hand, the last war of aggression in 1998-2000 was an educative lesson for both the inept leaders in Ethiopia and its sponsors in that it is impossible to break the gallant Eritrean Armed Forces through the art of war and direct combats. Being frightened by the 1998-2000 Border War outcome and vent its frustration on the then possible counter attacks by the gallant Eritrean Armed Forces, the US hurriedly took the so-called border issue to Algiers and was able to avoid the further humiliation of its frightened agent in Addis Ababa. As a result, the Algiers Peace Agreement was signed between Eritrea and Ethiopia on December 12, 2000. Informed Eritreans firmly believe that the ‘no peace, no war’ state of affairs that was bent by the terrified regime in Ethiopia and the US administration was meant to break Eritrea into pieces that were not possible through the act of war through breaking Eritrea from within. The evils in both the south and north know well what Eritreans are all about despite the failure of their leadership. In the words of the former US Ambassador to Eritrea, Ronald McMullen, in a cable sent to the different branches of his government in March 2009:
“Although the regime is one bullet away from an implosion, Eritrea’s resilience as a country is based on 1) a strong sense of nationalism forged over four decades of war, and 2) the capacity of most Eritreans to withstand suffering and deprivation with forbearance and toughness. Any sudden change in government is likely to be initiated from within the military. End Summary.”
H.E. the Ambassador was quite right in his judgment about the heroic people of Eritrea and their capacity to defy historical enemies including himself. What he has miserably failed to understand is that he though the people and the military are two different things. Many ill-wishing about Eritrea including from those across the southern border still think Eritrea will remain united as long as Isaias Afewerki is in power. In other words, Eritrea exists as long as Isaias is in power. Well, they can still dream but no matter what Eritrea and Eritreans are about resilience and resistance.
What Happened after the EEBC Ruling?
Ever since the border ruling was announced by The Hague-based Eritrea-Ethiopia Border Commission (EEBC) in 2013, the US has openly followed a migration policy that encourages illegal, unsafe and disorderly migration of Eritreans aimed at depriving the country of its youth and weaken Eritrea’s defense capability. The US did implement similar policies in Cuba under the ‘wet foot-dry foot’ policy that allowed any Cuban who set his/her foot in the US was guaranteed a permanent residence. The US had the same immigration policy in Eastern Europe encouraging anti-communism elements to escape their homelands using the American NGO called the International Rescue Committee (IRC) which was primarily created for this purpose. IRC was operating in Eritrea implementing water projects here and there, but its primary mission in Eritrea was to back the Sudan People’s Liberation Army (SPLA) stationed in Eritrea at the time. It is true that all NGOs are not cherubs!
All in all, when the US administration realized that it was impossible to break down the gallant Eritrean Armed Forces, it was left with no other option but use its old tactics in Cuba and Eastern Europe in depriving Eritrea its talent youth. To some extent, the US has succeeded to pull out Eritreans out of their homeland using different tricks. The story is, in 2002, the US opened its asylum screening post in the Shimalba Refugee Camp located in western Tigray. Right away in the same year, the camp was mounted. At the same time, the US has persuaded its allies in Europe to categorically offer asylums for anyone who claim to be an Eritrean. Initially, the United Nations Higher Commissioner for Refugees (UNHCR) rejected the idea of building a camp in Tigray because the minimum number of refugees to open a refugee camp was not satisfied as required by the UNHCR standards. However, to satisfy the required minimum number of refugees and to open the Shimalba Refugee Camp the TPLF regime quickly collected Tigreans from here and there and camped them in the Shimalba camp pretending they were Eritreans.
In the beginning, the US asylum screening and resettlement processes to the US were fast enough intended to pull Eritreans into the camp, and since then many more have crossed the border en masse. However, through time Eritrean refugees camped in Tigray realized that most of the US resettlement beneficiaries were Tigreans, not Eritreans. Disappointed by the US asylum screening conduct and the gradual slowdown of its resettlement program, Eritreans start to flee to the Sudan and from there to Libya in an attempt to cross into Europe as their final destination. In the end, Europe has become a victim of the US old tactics towards allegedly ‘unfriendly’ countries. It was only recently that member states of the EU have begun to review their asylum policies on Eritreans. They do so because they are worried by the influx of migrants from other countries such as Syria, Iraq, Somalia, Sudan, Ethiopia (of course, in the name of Eritreans), and many more countries. This development in Europe has set a new reality, and Europe has to do something about it.
US’s Deceptive Immigration Policy towards Eritrea and EU’s Policy Review
Deceived by the US anti-Eritrea stance, until recently, European asylum policies were more ‘generous’ for Eritreans. However, following the controversial report of the Danish immigration authorities in 2014 Europe’s liberal asylum policy has slowly begun to change. Particularly, with the recent UK Home Office’s report on the human rights conditions in Eritrea, the possibilities to return Eritreans from Europe back to Eritrea is becoming only a matter of time and when. Both reports concluded that Eritreans could be returned home without fear of consequences by the Eritrean Government. In Switzerland, Eritrean asylum issue is a recurrent issue in parliament following the visit of some Swiss members of parliaments to Eritrea or perhaps encouraged by the Denmark and the UK immigration authorities’ mission reports.
No doubt, other European countries will soon follow Denmark, Britain and Switzerland immigration authorities’ preliminary conclusions that Eritrea is safe for returnees. Israel has already returned hundreds of Eritreans in their accord. No consequences were reported to the returnees by the Eritrean government. Israel’s action strengthens the above two reports by Denmark and British immigration authorities in that no consequences can follow the returnees. Likewise, the Danish and British reports can encourage Israel to further intensify its hold on returning Eritreans.
In addition to the Danish and UK Home Office says preliminary conclusions there remains another reality that compels Europeans to review their Eritrean asylum policies. Many parliamentarians and immigration authorities in Europe are asking a legitimate question of what does it mean when those former Eritrean asylum seekers go back to their home country once they secured European citizenship? For many of them, the answer is the country is safe and nonviolent. Perhaps the most important question is if Eritrea is not prepared to accept forced returns can Europe’s asylum policy review on Eritreans work? In my view, it cannot work. It is for this reason that EU in general and its member states, in particular, have high stake to dialogue with Eritrea. Should Eritrea undermine this concern of its partners and potential partners? Of course not.
Even if Eritrea insists in its view of ‘no forced returns’ disorderly returns is not an option, and it is not in the best interest of the country at all. We have seen disruptive returns from Israel. Eritrean migrants who voluntarily leave Israel are offered $3,500 each as incentives. I believe the ‘no forced returns’ policy of the government of Eritrea will not only expose the country to a disorderly return of migrants but also will complicate its hard-won relations with the EU and some of its member states such as the very influential Germany. Unfortunately, the Eritrean authorities are known for setting hard per-conditions with limited intent to compromise. With all due respect, this culture has to be changed. There is no doubt in my mind that if the Eritrean authorities fail to pay attention to Europe’s concerns about the influx of migrants the economic and diplomatic costs will be enormous and damaging. Hence, to avoid unnecessary diplomatic damages and to revitalize its economy Eritrea should facilitate viable solutions through creating economic opportunities for its young people.
Going beyond the ‘No Forced Return’ Policy
Eritrea should go beyond the policy of ‘no forced returns’ and prepare for more viable alternatives. The one and critical alternative to curve migration would be creating economic opportunity for the young people. Curving migration is in our best interest and that of the European countries. Europe is now desperate by the influx of illegal migrants from Eritrea, Syria, Iraq and much more. Eritrea should not misplace the good partnership it has forged with the EU and should come with an opportune policy outside the ‘no forced returns’ by the host countries and governments. It is also important to keep the partnership momentum with the EU and some of its member states.
Eritrea should not be shy from appealing for financial and technical assistance for promoting small and medium-sized enterprises (SMEs) through available financing instruments by interested governments. In doing so, proactive actions are required by the Eritrean government. It is understandable that returning migrants should not be done disorderly. Yes, returns of migrants by the host countries and states should not be forced but based on viable economic opportunities and incentives. Eritrea must be prepared to negotiate, in the strongest terms possible and the best interests of the returnees and other vulnerable young people at home.
Negotiation terms have to be in the first place outlined, internally conceptualized and developed into actionable schemes and programs to develop SMEs across all sectors. We all know that Eritrea’s economy is not only narrow and undiversified but also lacked backward and forward linkages. To create a viable economic base and create jobs, the development of SMEs is crucial. If given the opportunity young Eritreans have the power and talent to make SMEs work for them and their country. If genuinely crafted the development of SMEs can be an excellent start to revitalize the Eritrean economy by diversifying its base and serving as a stepping stone in going up the value-chain which gradually enables the country to compete at the regional and global levels. I trust the EU in general, and its members that are thunderstruck by illegal migrants, in particular, will be interested to cooperate and born all costs to the development of SMEs provided Eritrea comes with fundable schemes and programs to help its young people. Eritrea should not wait its partners to tell her about what is possible and what is not. Instead, Eritrea should take proactive roles and prepare to negotiate with the host governments in Europe on the possible financial and technical assistance. Eritrea’s negotiators need to be reoriented to negotiate with the host countries’ authorities effectively. Furthermore, Eritrea’s negotiators need to be refocused on the cost-benefit of both negotiating parties and need to have the competence to negotiate in the best interests of the returnees, Eritrea and the host countries in Europe.
It is also advisable that our negotiators should include relevant state and non-state entities such as the National Bank of Eritrea, the Commercial Bank of Eritrea, the commercial and Housing Bank of Eritrea, the ministries of finance and development, and representatives of mass organizations such as the NUEYS, NUEW, the chambers of commerce, and whenever possible resident international NGOs should be involved as well. It is also critical to include young and bright men and women negotiators who understand the situation of their peers more than the old folks. I believe this approach will give leverages and bargaining power for the Eritrean government to efficiently and productively negotiate with the host countries and governments in Europe in this initiatives.
Access to Finance Schemes for SMEs
As stated above Eritrea should explicitly negotiate with its EU partners on the possibilities of economic opportunities for its young people who are interested in running SMEs ventures and can come up with fundable proposals. I believe the EU and its member states must be keen to hear from Eritrea such as the SMEs financing schemes for its youth. Eritrea can ask on a scale the following funding schemes:
- Start-up capital: a seed capital fund in the form of a grant for young people to start and setup SMEs. It is a small component of the overall SMEs financing to purchase necessary tools to set up SMEs businesses. Gradually, grantees need to be linked to the credit guarantee fund and foreign exchange services schemes to develop their SMEs further.
- Credit Guarantee Fund (CGF): is a fund that could be hosted by the National Bank of Eritrea to guarantee loans by SMEs lacking collateral and or security to access traditional banks (the commercial banks of Eritrea, for example) for manufacturing, agricultural, and commercial loans. While the seed capital helps very much for the setting up of SMEs the CGF allows SMEs to access a collateral free or on risk sharing with the commercial banks and that which protect the banks against defaulters.
- Foreign Exchange Services (FXS) for SMEs: in developing countries, this is a critical service when dealing with international payments, particularly when SMEs have to import key inputs and machinery.
In my humble professional view, hundreds of millions of dollars can be mobilized from the EU and its members, particularly from those countries that hosts or potential destinations for thousands of Eritrean migrants. Evidently, this initiative can be a useful tool to curve economic migration, and undoubtedly EU partners have vested interests to invest in SMEs development that has tremendous potential to stop economic migrations from Eritrea.
While collateral-free credit access to local banks through the establishment of CGF is possible to finance SMEs development, it is not enough. With the help of host countries and governments, it is also feasible to establish an FXS for SMEs with the support of the host countries and states in Europe. FXS can be grant and long-term concessional loan or a combination. With the availability of the FXS, SMEs will be able to import key inputs and machinery which will also help to revitalize the economy in the directions of regional and global value-chain activities.
In both developing and developed economies SMEs are the lifeblood of an economy, provide jobs and sustainably contribute to the gross domestic product (GDP). If the investment climate in Eritrea is improved and institutional arrangements are made SMEs can play an active role in generating growth, creating decent employment, and a lasting solution for illegal migrations. I believe there are tremendous investment opportunities and potentials in the different sub-sectors including but not limited to irrigation, manufacturing, poultry farming, dairy and fish harvesting, and processing, information and communication technology (ICT), energy, artifacts, distribution, wood and metal works, food industry, construction, services, etc.
Required Institutional Arrangements for SMEs Development
To take advantages of the new realities in Europe, Eritrea needs to take a proactive stance to change the puzzling migration experience into opportunities through constructive dialogue with the EU and its member states. In my view, establishing institutions of SMEs development alone send a great message to EU countries. It is a signal of political commitment which I think many countries will be willing to drop their money into the different financing instrument coffers. I propose the following institutions of SMEs developments by and for our talented young people:
- National SMEs Development Board: a national authority that oversees, facilitates and proactively support the development, growth, and competitiveness of SMEs as an integral part of the national economic development and prosperity.
- National Credit Guarantee Corporation (NCGC): a government scheme that administers the credit guarantee fund financed by the government of Eritrea and its partners/donors. In this case, the government of Eritrea will ensure to pay perhaps 50 percent of the principal outstanding loan on defaulted SME loans. The guarantee covers lending by commercial banks to all sectors and sub-sectors. In this regard, the SME-CGC is meant to improve SME access to finance and at the same time enable lending banks to share part of the risk with Government.
- Credit Guarantee Fund Trust for Small and Medium Sized Enterprises (CGF-SMEs): is an autonomous entity charged with implementation of the Credit Guarantee Fund (CGF) through the provision of technical assistance and advisory services to SMEs and beneficiary banks. The Managing Director of the CGF-SMEs directly reports to the National SMEs Development Board. While the CGC mobilizes and facilitates SMEs access to flexible financing, the CGF-SMEs implements the Credit Guarantee Fund Scheme for SMEs. Incorporation of CGC is critical because it deals with multiple sources of Credit Guarantee Funds.
- Company Formation Specialists: young people should be assisted by experts in their structures of SMEs and even large enterprises. Especially, the legal structures of limited private companies deserve singular treatments and specialist services right away from their setting up and after. Business formation might seem straightforward and simple, but it is not. Let alone in countries like Eritrea even in the most developed countries enterprise establishments need the hands of professionals. In setting up private firms, the company formation experts could suggest different structures which would affect taxation and the overall protection of the enterprises. Company formation specialists also play key capacity building roles by educating firms and their managers in the development potentials of their businesses, national legislation, shaping of enterprises memorandum of associations, issuing shares (that they might choose to), etc.
In their own rights, the above institutional arrangements can serve as attractions for financing and partnership if Eritrea genuinely wants to help its youth and revitalize its economy from the current standoff. I am not suggesting in any way or form this approach is new in Eritrea. For instance, in the 1990s the Commercial Bank of Eritrea used to have a credit guarantee scheme with German banks for Eritrean returnees from Europe and the Middle East. My proposal is to the Government of Eritrea to do it at scale and do it quickly. If not now when should our youth be supported? I believe the above institutional arrangements could serve as stepping stones to help young scientists and entrepreneurs to achieve their dreams and the dreams of all Eritreans too.
In its right, the policy of ‘no forced returns’ by the Eritrean government is not wrong and or detrimental. However, under no or little economic and business incentives for the returnees and other vulnerable young people back home, no Eritrean migrant in his/her right mind is expected to return and or stay at home willingly. Thus, Eritrea needs to prepare and take an active role in handling migration issues by engaging the EU and its member states. Eritrea should not disappoint the EU countries who are willing to do everything to stop migration from Eritrea. Rather Eritrea should openly negotiate with the EU and its member states taking into consideration their immediate concerns and interests. Moreover, Eritrea should avoid the ‘wait and see’ attitude. If the above-proposed financing instruments and institutional arrangements for SMEs are explicitly communicated with the EU and its member states funding to revitalize the private sector that creates decent employment is more than guaranteed.
The benefits of promoting SMEs are enormous and long-lasting for curving migration which is in the interests of Eritrea and its partners in the EU. In this regard, returnees will benefit from the soft terms of the CGF scheme for SMEs; local banks protect themselves against possible defaults by borrowers and encourages the banks to lend more to SMEs without fearing a default; reduces Eritrea’s pressure on foreign currency as SMEs should have access to foreign exchange services funded by host countries and government to import key inputs and machinery; helps Eritrea to revitalize its economy because SMEs contribute to gross domestic products (GDP); expands the current narrow tax base and increases tax revenue; creates more jobs, ensures sustainable and inclusive growth; and curbs further migration making Eritrea beneficiary of its young population in its development ambition.
If Eritrea genuinely and proactively handles the situation, which of course should, the whole illegal migration issues can be a win-win outcome for Eritrea and its partners in Europe.