The Kind of Investment Eritrea Needs
by Daniel Semere
In today’s world where interactions and transactions have reached to its highest point, investment has become extremely fluid concept. Especially starting from the second half of the previous century, a number of steps have been taken, globally and countries individually, that enabled an easy flow of capital from a country to another. This as might be expected had a direct influence on the issue of investment as well.
However, such fluidity, as much as it has propelled the hitherto unprecedented economic growth the world has enjoyed in the past couple of decades, has also led to exploitation of various forms. Exploitation of cheap labor, especially in third world countries; tax evasion as movement to and fro countries has become extremely easy; exploitation of resources through corrupt leaders; exploitation of the environment; etc. The in and outs of these exploitations could be much to be discussed here. However, an important point that should be raised, as a result of these threats, is that investments need a proper scrutiny.
Our capital recently hosted an investment conference. This conference, which was held from 17 – 18 December under the theme “Development by the People for the People”, had more than 700 participants coming from inside and outside of Eritrea. The socio-economic development of our nation can depend upon many resources and factors. As in elsewhere progressive development of our country can take into account the natural resource, availability of capital, human resources, organization, technology, and the likes.
The role all these factors can play in the uplifting and development of any nation is obvious. The recent initiative in the matter of investment therefore should play its due role in this overall plan. But the success of this initiative depends on many factors. To start with the kind of investment, whether it is home grown or outside, by citizens or foreigners, on sectors we have comparative advantages on or not, can be various. These factors need to be taken in to account as they can have tremendous impact on the result they would bring.
As any investment has its home base, the fact that the prospective participants in this investment plan are Eritrean has its own positive impact. Indeed, what makes this arrangement even more appealing is this very fact. Of course, any investment’s main drive is profit, and in that respect the proposed investment by Eritreans couldn’t be expected to be any different. However, as Eritreans’ attachment with their homeland is famous, it could be a plus in this endeavor as well. In other words, the home base for much of this investment would be Eritrea, which would mean a guarantee for the accumulation and reservation of our wealth and capital in the country. This would in turn also mean a guarantee for sustainable economic growth in the country.
Whether at the moment or in the future our sustainable development can only come from home driven investment, and as such, we should have great expectation from this project. However, as high is our expectation it is also something that has to be implemented with great care. Indeed expectation of instant change and directing valuable resource in to alleviating temporary problems has backfired in many African countries. The expectation and aspiration of instant change has led the unwise management of resources and, in most instances, it has rendered conflict and contention among different section of the society.
As a result, Africa has become a scene of civil wars, coups and corruption because of its resources. Therefore, the investment Eritrea needs is one that has a sustainable impact on the well being of the society in its every aspect. Most of the time such investments involves as many citizens as possible and hence creating a vast employment for the people; they also tend to utilize the nation’s natural resource first and foremost thereby bringing extra revenue for the state; there are also other sensitivities that they also can take in to account as far as culture is concerned.
What this goes down to is that in the face of immense resources, prudence and calculation is a crucial component. Resources should render a sustainable development where the society depends on its ability to be productive. And for this to happen, we have also to fulfill the expectation the potential investors have. As we have stated above any investment is driven by profit. As such, confidence on the part of the investors is a crucial prerequisite if it is going to be materialized at all. Such confidence on the other hand emanates as a result of the opportunity there is in the country of investment, and the various apparatus that compliments the exploitation of this opportunity. This includes physical, institutional, and legal infrastructures. Concrete steps in the building of these infrastructures are the fist stride we can take in order to inspire confidence on the part of the potential investors. The task in this respect might be huge but it should nonetheless begin in the very near future. But most of all the commitment from the state is the ultimate guarantee that can do the trick in this respect.
In this time of promising future in Eritrea, we should be able to learn from other’s experience. What ever resource we might be endowed with, we should never forget that it is meaningless without the utilizing it prudently for the overall development of the nation. That’s why our bright future rests not in the material resources we are blessed with, but on efficient and effective use of it in which the right kind of investment can play a great part in. And it needs a concerted effort from all section of the society and the government.