25 Years of Struggle Building Socialism in Eritrea; Fighting the Cancer of
Corruption
Submitted by Thomas C. Mountain on Tue, 05/17/2016 - 18:03
http://blackagendareport.com/eritrea_currency_change
*by Thomas C. Mountain*
Eritrea, the socialist nation of 6 million people on the Red Sea that has
been called “the Cuba of Africa,” is replacing all of its old currency with
new bills and moving away from a cash economy. “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.” That’s bad news for currency manipulators – both foreign and domestic.
*25 Years of Struggle Building Socialism in Eritrea; Fighting the Cancer of
Corruption**by Thomas C. Mountain*
*“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.”*
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.
*“The most likely way to get away from cash use is a mobile phone payment
system.”*
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 it’s 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.
*“It’s only the relatively well to do that are inconvenienced.”*
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 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.
*“Hundreds of millions of US$ of Eritrean Nkf held illegally by foreign
currency banksters were wiped out almost overnight.”*
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.
*“All evictions have been put on hold for at least another two years.”*
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*
Received on Wed May 18 2016 - 21:19:54 EDT