Analysis Of Eritre A Country With Many Economic Challenges

Eritrea: a Country with Several Economic Challenges Eritrea is a country in the East African region with a population of 6.3 million. Eritrea borders to Sudan, Ethiopia, Djibouti, and the Red Sea. The country s location towards the Red Sea has geopolitical strategy as a shortest sea rout from Europe to Middle East and Asia. As a result, the country has been targeted to several geopolitical games. After many consecutive colonization from Europe as well as been part of Ethiopia, Eritrea overcome its independence in May 1991 and received international recognition as a country by the United Nations in 1993. The Eritrean independence resulted a new geopolitical structure in the horn of Africa mainly in relation to Ethiopia, which became†¦show more content†¦The Eritrean economy continues to face several challenges which are increasingly undermining inclusive growth and job creation. One of the main factors that brought the Eritrean economy to the level of recession is war. According to African Developmental Bank Group, Eritrea was engaged in a border conflict with Ethiopia in 1998 to 2001. The war caused losing of millions of dollars and hundreds of human casualties in both countries(10). The border conflict rose up in the less than a decade after Eritrea became an independent country. This shows that how the economic progress of the country in the nation rebuild strategy diverted to regional war, and cost the new country millions of dollars in its few years of independence. This political instability influenced that level of governmental spending in to war and caused tremendous economic destruction. According to Eritrea Finance Ministry report, Government spending was 3.4 millions dollars in 1990 s. These amount were implemented in several infrastructure building, social and educational facilities and many other basic and fundamental implementations. According to World Bank report, the governmental spending lead investments were provide high level of job opportunities and Eritrea unemployment rate during first eight years of independence was between 7.1 and 7.5 (4). This fact shows that the