A Note to Readers For the benefit of readers, I am posting this article written by an Eritrean friend and economist, Kiros Beyene, bearing the title ‘Eritrea: Progressing or Regressing Under PFDJ Rule? I am doing so because the article portrays supported by hard statistical facts Eritrea’s predicament and the degraded human condition prevailing in the country under PFDJ rule. Enjoy reading!! Eritrea: Progressing or Regressing Under PFDJ Rule? Kiros Beyene, August 24, 2014 Background As UNDP’s independent report, the Human Development Report’s (HDR) single goal is to capture the true status of development by putting people back at the center of the development process in terms of public debate and policy dialogue at national and international levels. The human development goal is to measure people’s wellbeing by expanding the wellbeing dimensions beyond the Gross National Income (GNI) per capita to assess the level of people’s long-term well-being. The human development paradigm emphasizes the expansion of people’s choices and freedoms. Since 1990, at the global level, the HDR has been published annually as an advocacy and knowledge tool to advance human wellbeing by presenting cross-country comparisons in the three-dimensions of human development index (HDI) based mainly on comparable international databases such as those of by the United Nations Population Division, the United Nations Educational, Scientific and Cultural Organization (UNESCO), Institute for Statistics and the World Bank. In doing so, the HDI is traced back to 1980 and the current report presents HDI values and ranks from 1980 to 2013. The HDR is also published at national and regional levels. In some countries like India publications of HDRs are also published at district levels. Indicators of HDRs are being used by countries such as Indonesia to reallocate resources to sub-national governments together with other fiscal transfer variables. At the global level, the HDR group’s countries into low, medium, high and higher HDI groups besides regional and sub-regional HDI comparisons. Accordingly, the HDR values and ranks countries based on their progress in human development index (HDI) which is the composite average measurement of life expectancy at birth, education and living standard. Thus, the HDI is a composite long-term measure of progress in the three-dimensions of human development namely: • life expectancy at birth , • Educational attainments and • Decent living standards measured in Gross National Income (GNI) per capita (Purchasing Power Parity). The Report progressively introduces other measurements of human progress such as the inequality-adjusted HDI (IHDI), the Gender Development Index (GDI), the Gender Inequality Index (GII), and the Multidimensional Poverty Index (MPI) based on available national and international data. The 2014 Human Development Report: The UNDP Human Development Report 2014 was launched on July 24 in Tokyo, Japan. The theme of the Report is ‘Sustaining Human Progress: Reducing Vulnerabilities and Building Resilience’. The Report, to a great degree, has taken a broader approach to vulnerability by emphasizing the close links between reducing vulnerability and advancing human development. In doing so, the Report has introduced a new concept called HUMAN VULNERABILITY, a concept that describes the prospects of eroding people’s capabilities and choices. It has further indicated that globalization has produced major human development gains in the South and most people in most countries have been doing steady progresses in human development and that advance in technology, education and incomes still hold greater promise for longer, healthier and secured lives. Despite gains in human development in the world today there is still widespread of precariousness in livelihoods, personal security, the environment as well as in global politics. Thus, the Report has warned that high achievements on critical aspects of human development can quickly be undermined by natural disaster or economic decline. Having looked human vulnerability through the human development lens it has drawn attention on the risk of future deterioration posed by vulnerability. In particular, it emphasized the systemic and perennial sources of vulnerability and asked the following questions: • Why do some people do better than others? • What structural causes leave some people more vulnerable than others? • What types of investments and interventions can reduce vulnerability during the sensitive traditional periods of the lifecycle of the individual? The Report has made a case that sustained enhancement of individuals’ and societies’ capabilities is necessary to reduce persistent vulnerabilities – many of them structural and many of them tied to the life cycle of the individual. So much so that institutions, structures and norms can either enhance human resilience (ensuring that people’s choices are robust, now and in the future, and enabling people to cope and adjust to adverse events). Beyond providing knowledge and insights of human vulnerability, the Report further outlines key messages for national and global actors to address human vulnerabilities. The next section presents Eritrea’s human development status based on HDI figures for the period 2010 to 2013. Due to lack of relevant national data other human progress indices such as IHDI, GDI, GII, and MPI were not computed by the Report. Eritrea’s Human Development Status: Eritrea is not doing well in improving its human development status. Between 1990 and 2013, Eritrea’s life expectancy at birth increased by 14.7 years from 48.2 to 62.9, an average annual increase of only 0.61 years over the last 24 years. In education, expected years of schooling fell from 4.7 years in 2005 to 4.1 years in 2013 while the mean years of schooling remains the same for the period 2010 to 2013 at 3.4 years. Gross National Income (GNI) per capita has declined by about 21 percent from US$1,455 in 1995 to UD$1,147 in 2013 (at constant international dollar). Overall, Eritrea’s HDI values for the period between 2010 and 2013 has experienced extremely low progress from 0.373 in 2010 to 0.381 in 2013, an annual average growth rate of about 0.5 percent which is lower than the averages for the Low HDI Group and Sub-Saharan African countries. Thus, Eritrea’s HDI trend shows overall marginal progress which is driven by life expectancy at birth while educational attainments and GNI per capita income shows a downward trend. For instance, compared to other African countries with similar socio-economic conditions the image of Eritrea’s HDI progress is appalling. Burkina Faso and Guinea with a similar socio-economic conditions and population size to Eritrea show rapid progress in their HDI values for the period between 2010 and 2013. Eritrea’s 2013 HDI rank is 182 out of 187 countries and UN-recognized territories excelling only 5 African nations namely: Sierra Leone, Chad, Niger, Central African Republic, and the Democratic Republic of Congo. Due to civil wars and internal instabilities these countries are the most troubled nations in the African continent. Moreover, Eritrea’s 2013 HDI value of 0.381 is not comparable with the averages of Sub-Sahara Africa and Low HDI group countries which are 0.502 and 0.493, respectively. Obviously, there have been some improvements in the health services despite problems in medical supplies and lack of trained personnel. As indicated in the Report, between 2003 and 2012 there were 0.5 physicians per 10,000 Eritreans and the 2011 total health expenditure as a percentage of GDP was 2.6 percent of which 51.2 percent was out of pocket expenditure . In absolute terms the 2.6 percent of GDP is extremely small for a small economy of about US$3 billion GDP. Similarly, the education sector suffers from low investment of about 2.1 percent of GDP for the period between 2005 and 2012. Both the education and health sectors are dependent on foreign aids. The African Development Bank (ADB) is the major financier of the education sector, while the health sector benefits from the World Health Organization’s regular budget and resources mobilized from other donors. On the national economy side, ADB recent estimate shows a sharp drop in GDP growth from 7.0% in 2012 to 1.1% in 2013. Overall the economy of Eritrea is shrinking which will further worsen the life of the Eritrean people and investments in education and health are expected to feel the pain of the pinch further. The following are some of the facts about Eritrea provided by the African Development Bank and African Economic Outlook (2014): • Total revenue (taxes, non-taxes, and grants) fell from 32.3% of GDP in 2005 to about 18.4% in 2013. • Tax revenue fell from 14.9 of GDP in 1995 to 10.7% in 2013 (estimation) while grants fell from 9.3% to 1.2% of GDP for the same period. • Capital expenditure declined from 17.9% of GDP in 2005 to 6.7% in 2012 and is projected to fall further to 5.9% by 2015. • Total revenue fell between 2005 and 2010 due to reduction in donor grants and poor or non-existent major economic activities. • Diaspora tax began to decline to less than 10% of GDP following the UN imposed sanctions on the “2% diaspora tax”. • The contribution of agriculture declines from 17.4% of GDP in 2008 to 16.9% in 2012. Over 80% of the Eritrean people live in the rural area and depends on backward farming system/traditional and rain fed agriculture; • Manufacturing fell from 6.8% to 5.9% for the period 2008 to 2012; • Construction show similar trend and fell from 18.1% of GDP in 2008 to 15.5% in 2012. Note that this sector is 100% monopolized by the PFDJ construction companies that enslaves the Eritrean youth under the pretext of national service. In short, the PFDJ’s poor and ad hoc based economic policy has failed miserably. In order to fulfil its foreign currency greed, the regime has invented foreign direct investment in the extractive (mining) sector to tactically match the declining trends of donor grants, diaspora tax and narrow tax base. In an economy where citizens (the local people) are not given the freedom and the right to be actively engaged in businesses and gainful employment, foreign direct investment in the extractive industry is wastage. The regime knows that this will not help the economy and the people at present and in the long-term. It also knows how to fix the problem the country is facing. The solution is opening up the economy for citizens and ensuring the participation of the private sector and freeing citizens to work the type of work they aspire. However, the PFDJ regime is very much aware that this cannot be realized without constitutional and pluralistic governance which is hardly coming. Conclusion It is thus safe to conclude that Eritrea is under an economic siege under the PFDJ regime. Lack of data or statistics to measure the human development progress in Eritrea shows lack of progress in human development. Over the 24 years of PFDJ tenure nothing has changed positively in both the economy and the life conditions of the Eritrean people. So what do we expect in the near future for Eritrea and its people? Among other things, we should expect further: • The decline of the economy and in human development; • The worsening living standard-due to the poor economic activities and placed the productive workforce in non-productive sectors such as the military, etc. • The decline in the education and health sectors – as national revenue declines due to narrow economy, decline of donor grants, and diaspora tax • even more migration of young people drying its productive workforce • worse political repression and tyranny • Lack of resource endowment – lack of accountability and transparency especially in the mining sector. References UNDP, Human Development Report (2014) African development Bank, African Economic Outlook Eritrea (2014) Endnotes Life expectancy at birth - number of years a new born infant could expect to live if prevailing patterns of age-specific mortality rates at the time of birth stay the same throughout the infant’s life. Education as one of the three dimensions of HDI has two proxy indicators – mean years of schooling which is the average number of years of education received by people ages 25 and older, converted from education attainment levels using official duration of each level; and the expected years of schooling – which is the number of years of schooling that a child of school entrance age can expect to receive if prevailing patterns of age-specific enrolment rates persist throughout the child’s life. GNI per capita is aggregate income of an economy generated by its production and its ownership of factors of production, less the income paid for the of factors of production owned by the rest of the world, converted to international dollars using purchasing power parity (PPP) rates, divided by midyear population. total health expenditure refers to current and capital spending on health from government (central and local) budgets, external borrowing and grants (including donations from international agencies and non-governmental organizations) and social (or compulsory) health insurance funds, expressed as a percentage of GDP. Out of pocket health expenditure refers to households’ direct payments to public and private providers of health care services and nonprofit institutions and non reimbursable cost sharing, such as deductibles, copayments and fee for services, expressed as a percentage of total health expenditure. See African development Bank, African Economic Outlook 2014 (Eritrea) avail
Posted on: Mon, 25 Aug 2014 10:05:16 +0000
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