Eritrea boosts economic ties with China
September 4, 2007 (ASMARA) — Eritrea is looking east. Frustrated with the Western nations it blames for a border feud with arch-foe Ethiopia, this east African nation is boosting economic and political ties with China and Arab nations.
Exports to Eritrea from China jumped over 350 percent last year from the previous year to some 35 million dollars (26 million euros), according to Chinese statistics.
“We have long relations with Eritrea from during its independence war, as well with other regional countries such as Djibouti, Sudan and even Ethiopia,” said Shu Zhan, China’s ambassador to Eritrea.
“We hope to build and improve on these,” he told AFP.
Such figures may be dwarfed by Chinese dealings with other African nations, but are extremely significant to Eritrea’s young economy, battered by years of war and with an annual gross national income per capita of just 220 dollars in 2005, according to the World Bank.
Eritrean President Issaias Afeworki, who developed close ties with China when he trained there during Eritrea’s 30-year liberation war against Ethiopia, has turned increasingly towards China and away from the West.
China, which earlier this year cancelled part of Eritrea’s debt, has focused efforts on construction — including developing a cement factory and a college — as well as upgrading Eritrea’s telecommunication network.
In an interview earlier this year with Chinese media, Issaias said that current links may only be the “tip of the iceberg.”
“In the last ten years we say our trade partnership was more with Europe rather than with China,” Issaias said in the interview, posted on an Eritrean government website.
“In the last few years dramatically everything has shifted to China,” he said.
Eritrea has also boosted ties with the Arab world, developing growing political and economic links with nations such as Libya, Saudi Arabia, the United Arab Emirates and Qatar.
But while Eritrea enjoyed rapid expansion after winning independence from Ethiopia in 1993, economic growth has been stifled by a border stalemate following their bloody 1998-2000 war.
While Asmara receives an 88-million-euro (119 million dollars) five-year development package from the European Union, relations have grown frosty with several Western nations, particularly the United States.
Washington, which ordered the closure of Eritrea’s Californian consulate in August, accuses Asmara of supporting Somalia’s Islamist insurgents battling Ethiopian and Somali interim government troops.
Dismissing those claims, Asmara in turn accuses the US administration of failing to pressure Ethiopia into implementing a UN border commission ruling granting a key border town to Eritrea.
Instead, Eritrea has asked China, as a veto-wielding UN Security Council member and as a strong trade partner of Ethiopia, to help break the deadlock.
“We hope that the ruling can be implemented as early as possible, so that the burden can be lifted,” Zhan told AFP in Asmara.
“Now we have ‘no-war no-peace’, which impedes the social and economic situation for both sides.”
That assistance is limited to peaceful negotiations, Zhan said, denying reports of loans from Beijing to buy arms.
Zhan also dismissed reports that relations were strained by accusations that Eritrea is backing rebels to fight a proxy war against Addis Ababa, potentially threatening Chinese interests in Ethiopia and Somalia.
He said he believed Asmara’s denial of backing the separatist rebels who led a bloody attack last April on a Chinese oil exploration facility in Ethiopia’s troubled eastern Ogaden region.
“We trust each other,” Zhan said.
Eritrea’s shift east follows a pan-African trend, seen in a Beijing summit last November attended by leaders from more than 40 African countries.
Chinese Prime Minister Wen Jiabao said at the summit that Beijing intended to more than double trade with Africa to 100 billion dollars a year by 2010.
Analysts say China is eyeing upbeat exploration reports of Eritrea’s lucrative gold and mineral deposits, which Asmara hopes will provide a crucial foreign currency income when production begins, potentially as early as next year.
But while Eritrea and its 4.4 million population may be a minnow compared to the Asian giant, observers say that fiercely self-reliant Asmara will be unlikely to simply cede its mineral rights away.
Issaias has warned that Eritrea must be “very cautious” to avoid a repeat of the historical “exploitation of resources by highly developed industrialised countries.”
“If it is a matter of selling raw materials to China and not getting any benefit by developing a partnership for the long term, that may become a problem,” Issaias said.
(AFP)