WAR-TORN ERITREAN ECONOMY – SOME ISSUES AND TRENDS

The three decades of armed struggle, the subsequent drought, and deliberate policies of neglect and mismanagement by the last two regimes in Eritrea made growth of the Eritrean economy practically impossible. After independence, the country achieved a steady growth for some years. However, due to the border conflict with Ethiopia, the economy was characterised by severe macroeconomic imbalances and unusually high level of public expenditure. Poverty and inflation also increased many folds. Both domestic and external public debts reached unsustain¬able levels. Thus, an attempt is made in this paper to delve into some important trends of the Eritrean economy before and after 1998. The paper highlights some of the key economic issues like education, health, infrastructure, unemployment, poverty etc., and provides some concluding remarks.