Criticizing Eritrea for absence of free market economy is like tying a boxer’s hand behind his back, throwing him into the ring, and blaming him for losing.
By George F Tesfa,
Although each of these countries has a unique path of development from their founding, the political ideologies of their founding fathers are similar, to the point of being identical: equal access to education, health care, housing, and clean water through state ownership of most of the economy.
In the pre-Cold War era, this ideology was known as socialism. In fact, to this day, these three countries are, for the most part, following socialist policies, while acknowledging the role of the free market, or laissez-faire economic policy, unlike communist countries in the past.
The other similarity is that all three have one dominant political party associated with the founding of the country, with the slight exception of Cuba. Singapore has many opposition parties, but under one coalition, the Singapore Democratic Alliance. Meanwhile, the People’s Action Party has been ruling Singapore since the day it was founded. Eritrea’s only political party was also responsible for the founding of the nation. Their similarities can also be summed up as being founded and led by corruption-free leaders who live and have lived a simple life.
Singapore is now known by many as the only successful socialist country in the world. Singapore was kicked out of the Federation of Malaysia due to economic, financial, and political disagreements between the leaders of Singapore and the federal government of Malaysia amid race riots.
Lee Kuan Yew, Singapore’s founding father, and his party faced a dire economic forecast, with an unemployment rate of 25% and with almost zero productivity. Their economic plan was to install private management in some sectors of their economy, while still being owned by the state.
The government selected talented and highly educated citizens from the private sector and handed them those institutions to run as if they were privately owned. Those executives were paid and rewarded handsomely by the board members, as they would have been by private companies.
The government withdrew from daily management completely. One of those partially privatized organizations is Singapore Airlines. Today, it is believed that about 60% of Singapore’s GDP is owned by the state and roughly 40% is owned and/or run by private sector. It is most successful economic model ever.
Cuba’s national health care system is known as one of the most cost-effective and proactive in the world, far better than even that of many advanced countries. As we all know, Cuba has a long history of global medical voluntarism. They have played a big role in fighting malaria and Ebola in Africa. In fact, its heath expenditure per capita is relatively high given its struggling economy.
Former Secretary General of the United Nations Ban Ki-Moon once said, “Cuba’s health care system should be a model for many countries.”
Even though Cuba, like Singapore and Eritrea, successfully transformed its heath care and education system (unlike many developing countries), its economy as a whole has lagged far behind. Its unmatched public sector growth is overshadowed by the complete absence of a functioning private sector.
Cuba’s socialist economic model is like that which failed in the Soviet Union and Eastern Europe.
Eritrea’s economy has a lot of similarities with Singapore and Cuba. It has fulfilled Millennium Development Goals with respect to health care, gender equality, and empowering women. It would be utterly wrong and unfair to criticize the country for the lack of a private sector or even slow economic growth. Eritrea was only a seven-year-old nation after a long fight for independence when a political and economic war was waged on it, not by Ethiopia, but by the ruling TPLF party, with the blessing of Ambassador Susan Rice of the United States, followed by sanctions.
Criticizing Eritrea for the complete absence of a free market economy at this time is like tying a boxer’s hand behind his back, throwing him into the ring, and blaming him for losing. The country and its government have no choice but to control revenue and the budget for its survival. In fact, had the Eritrean government been corrupted like many other African countries, including its main rival Ethiopia, Eritrea would not exist as a nation now. When the time comes, I believe Eritrea will follow the path of Singapore and learn a lesson from Cuba, and run an economy that is majority state-owned, with some private sector role, which is the most successful economic model nowadays.
Some economists call it the socialist market economy of China; the welfare states of the Scandinavians; or the state-owned economy of Canada. No matter how we call it, the best economic model has proven to be a non-corrupted state controlling a good portion of GDP and privatizing and/or letting some sectors be run by private hands.
Applying the United States’ super-capitalism model and exporting its form of democracy to a complete different political culture, however, will only create fictitious economic growth for certain areas and corrupt leaders, like what we are witnessing now in Ethiopia. This is a country believed to be growing by double digits, while a double-digit percentage of the population is on the verge of starvation.
Some countries tend to function well both politically and economically under one political party, given their political culture, civilization, and history, so long as that political party is corruption-free. Many African countries and emerging nations tend to fall in these categories, Eritrea being one of them, to say the least.
In general, however, the least corrupt countries also tend to be those who believe less in super-capitalism and monopolization, and more in state ownership of the economy, while allowing the private sector to flourish.
I hope Eritrea will follow in the path of those countries.
The top 10 least corrupt nations, according to Corruption Perception Index of 2015:
4. New Zealand
Source: World Economic Forum.