Building new states: lessons from Eritrea
A well-defined economic strategy, and careful use of aid, promised higher returns to investment (and fewer unsustainable projects) than found elsewhere in SSA. By the start of 1998, the country had achieved much in a short time. The 1998-2000 war between Eritrea and Ethiopia threatens to undermine this achievement. The ashes of the war that ended in 1991 have reignited in a surprising and different way, and the fall out from the war endangers progress in development and democratization.
Both sides in the conflict have suffered major damage which will be long-lasting. The disruption to their trade and investment relationships is particularly severe. Moreover, the war imperils the construction of a development state in both Eritrea and Ethiopia. In 1991, both had real prospects of achieving this, thereby reversing the misguided and venal policies of the Derg. But the war has strengthened nationalist forces in both countries and may endanger further progress in democraticatization. It is to be hoped that Eritrea's strong social capital can redirect the energies of the state back to development if peace can truly be secured.