25 Years Of Struggle Building Socialism In Eritrea
By Thomas C. Mountain
17 May, 2016
This coming May 24 marks 25 years since a rag-tag afro coifed army of
Eritrean rebel fighters drove their captured Ethiopian tanks through
the Eritrean capital of Asmara and gave birth to the modern,
“socialist” country of Eritrea.
The birthing process, the “armed struggle for independence”, took 30
years so the modern struggle to build a country based on “scientific
socialism”, as Pan Africanists have called it, is still maturing.
While the lives of the people of Eritrea is still a hard one, a major,
and very popular, step in the development of socialist society has
been introduced in what's known here as the “currency change”, the
calling in of all the old currency for replacement. Eritrea at this
stage of socialism is still a cash based society with bank accounts
something still only for a minority. So changing all the money is a
really big deal in a developing third world country.
Now if you are a black market agent using cash to do your business and
have literally millions of Nakfa, the Eritrean currency, stuffed under
your bed, you got some explaining to do.
Villas in the better parts of the capital Asmara were selling recently
for up to 50 million Nakfa.
Who in this country of hard times is able to explain the legal
acquirement of 50 million Nkf?
So the “currency change” has brought to a halt much of black market
business, a move enormously popular with 95% of the long suffering
eritrean people, especially considering that ordinary citizens are
restricted to withdrawing 5000 nkf a month from an account. Most
Eritreans can only dream of earning 5000 nkf a month so its only the
relatively well to do that are inconvenienced.
In a socialist country the push will always be away from a cash based
economy and initially, at least in Eritrea, towards using checks for
major payments over a few thousand Nkf. The most likely way to get
away from cash use is a mobile phone payment system such as is used in
Sudan and increasingly in Kenya and this is what most probably will be
The currency change has also foiled a major plot by Eritrea’s enemies,
mainly based in Ethiopia and Djibouti, to destabilize the economy by
buying up Eritrean currency, which is illegal to take out of the
country. It got so bad in 2015 that only 10nkf and 20nkf notes were
available from banks and with limits on amounts.
Hundreds of millions of US$ of Eritrean Nkf held illegally by foreign
currency banksters were wiped out almost overnight, with the
notification of the currency change being kept a total secret until a
few weeks before its implementation.
This, along with a limit of only 1 million Nkf deposits prior to the
change left the crooks holding the bag, literally, for in a last
minute rush to get their ill gotten gains in the bank, there were
desperate lines of businesspeople with bags stuffed waiting outside
Without lots of cash floating in the community the black market price
of dollars quickly dropped from 54 to 1 to 22 to 1 and even lower,
what it was 15 years ago when I first was first here in Eritrea.
The shortage of cash has forced down the price of basic food stuffs as
well, with tomatoes once as high as 60 nkf a kilo now varying between
10nkf and 20nkf a kilo. Goats that were going for up to 2000 nkf are
now around 800 nkf. Wheat is down to 10 nkf a kilo and sorghum even
less (and this while our neighbors in Ethiopia starve).
Of course none of this is happening without learning pains, and the
banks are having to adapt on a day by day basis. Nobody in the banks
knew about the “currency change” until the general public did, so
there wasn't any time to plan what to do.
Transfers between accounts quickly had to be limited to control money
trafficking. Laws making it an offense to refuse checks are now on the
Rent control is being fully implemented with all rents frozen and
having to be registered with the local government and paid directly to
the owners bank account. All evictions have been put on hold for at
least another two years.
A new set of regulations is being implemented using floor space and
location for uniform rates to control the explosion of illegal rent
increases the country has seen with rents costing thousands when they
should be only hundreds per month.
Upscale neighborhoods in the capital saw rents as high as 40,000 a
month, paid for with black market money, but not any longer. A lot of
crooked Eritreans are starting to have to answer from where their
wealth was begotten and facing the loss of it all.
We will have to wait and see what is next but a major step has been
taken in the struggle to build a centralized, popular, socialist based
economy free of corruption, the ultimate cancer in Africa and the rest
of the third world.
This is something that those in the international community that claim
the name “socialist” should be following closely, much like what has
happened in Cuba with the relaxation's in private ownership.
Building socialism means taking care of the poorest, most needy,
first. While many in the cities may complain about lack of water to
take a shower, there are still Eritreans struggling to find water to
wash their hands.
Socialism means free health care for all. Socialism means free
education for all. Socialism means social equality, “democracy” really
(using the dictionary definition), or at least moving in the direction
Eritrea is a “socialist” country, though leadership doesn’t use the
word. The 25 year struggle has been to build “socialism” as in “ A
rich Eritrea without rich Eritreans”.
For all the talk of “socialism” these day, Eritrea is one of only
three socialist countries on the planet and in all three life remains
Thomas C. Mountain is an independent journalist living and reporting
from Eritrea since 2006. He can be reached via facebook at
thomascmountain, on twitter #thomascmountain or at
thomascmountain at g mail dot com