25 Years of Struggle Building Socialism in Eritrea

Asmara, Eritrea

By Thomas C. Mountain

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 introduced.

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 business people with bags stuffed waiting outside their banks.

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 books.

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 of such.

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 a struggle.

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

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