Country Report - Eritrea

Capital: Asmara

Population: 4,400,000

GDP: 190

Accountability and Public Voice: 0.67

Civil Liberties: 1.54

Rule of Law: 1.03

Anticorruption and Transparency: 1.71

(Scores are based on a scale of 0 to 7, with 0 representing weakest and 7 representing strongest performance.)

Anticorruption and Transparency – 1.71

Throughout the post-independence years, the economy has been dominated by the state and the PFDJ, which share ownership of the country's major financial and commercial institutions, agricultural and industrial enterprises, utilities, services, communications facilities, and transport companies. The PFDJ itself holds dozens of businesses in banking, trade, construction, shipping, metal-works, auto repair, road surfacing, and well drilling, among other industries, and it holds controlling stakes in a number of joint ventures with foreign investors for other large-scale undertakings, such as mining.[26] These, set up in the 1980s and 1990s, had been operated by the liberation front, and the PFDJ has expanded them since then with state favor. While the state has divested itself of some large and medium-size enterprises, it continues to play a commanding role in the economy. Privatization has gone slowly, in part out of would-be investors' fear of party interference in economic ventures and in part due to the precarious security situation since 1998.

Personal corruption among individuals has historically been low in Eritrea - and severely punished when uncovered - but the state and the ruling party have made extensive use of economic levers for political ends, often acting in concert. It is common, for example, for the PFDJ to pressure enterprises to include it as a partner in new ventures and to exact payment or a percentage of profits for its cooperation. Meanwhile, in recent years, strict controls on travel - both within the country and abroad - have generated a lucrative business in such documents as highly prized exit visas and, in the process, fostered a growing practice of graft and corruption among state bureaucrats. Largely on this basis, Transparency International rated Eritrea 102nd of 146 nations in its Transparency International Corruption Perceptions Index 2004, scoring the country only 2.6 on a scale of 1 to 10.[27]

Brigadier General Estifanos Seyoum, a high-ranking member of the PFDJ and a veteran of the independence war, was relieved of his post in the ministry of finance in August 2001 after questioning the equity of tax collection from PFDJ-owned enterprises. A signatory of the May 2001 "Open Letter to the PFDJ," he was detained with the other members of the G-15 in September 2001 and has not been heard from since.[28] No public questions about tax collection or government expenditure have been raised in public forums since then. Nor is there any independent auditing body with authority to take up such issues. Under the constitution, the president appoints an auditor general, but this position has not been functional. There is no public record of the party's economic operations, no published line-item national budget for the state, no detailed accounting for tax collection or remittances - no fiscal transparency of any kind for either state or party finances. In fact, the line items for the national budget remain a well-guarded secret - not only from the general public but from most members of the cabinet and the ruling party.[29]

With an executive-dominated government running a one-party state that prohibits independent media, quashes non-party NGOs, and detains without trial or recourse to appeal those who dissent individually, there are no whistleblowers for misconduct of any kind.

Recommendations

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The financial affairs of the state and the People's Front for Democracy and Justice should be fully disentangled and made transparent.
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A comprehensive line-item national budget for revenue and expenses (operational and capital expenditures) should be prepared, published annually, and made easily accessible to the public.
*
Tax policies and procedures should be open and transparent and subject to independent review.
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The practice of requiring exit visas to leave the country should be ended. Collection of bribes and favors for issuing government permits and documents should be thoroughly investigated and laws should be passed to prevent it in the future.
*
The government should implement safeguards to protect whistleblowers on institutional and personal corruption from retributive action by those whom they expose.

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