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EPDP Editorial

About five weeks ago, the Swiss Leaks Project in collaboration with the International Consortium of Investigative Journalism (ICIJ) made public over 100,000 secret bank accounts of HSBC in its Swiss branches. The leaks include clients’ detailed information such as accounts held by an individual and by a group and the country of origin. In the leaks, Eritrea is ranked 53rd out of 200 countries with a total asset of US$699.6 million stashed in these offshore bank accounts. Of this amount, US$695.2 million is kept under one person’s (entity’s) account. Without going into detail, what is clear is that one of the common and defining characteristics of dictators is “looting people’s money” and stashing it in offshore secret bank accounts in countries such as Switzerland and other countries. Switzerland is the headquarter of a global infrastructure of international financial secrecy, which facilitates the flight of trillions of dollars in illicitly generated money out of Africa and the rest of the developing countries.

Volumes of account records show that there has never been a single dictator from Africa, Latin America, and Asia who had not had their public loots put in the Swiss banks over the last many decades. The list of dictators who stole money and wealth from their citizens and stashed it in the secretive bank accounts of HSBC is long. To name a few: Mobutu of Zaire; Sani Abacha of Nigeria; Lansana Conte of Guinea; Gnassingbe Eyadema of Togo; Arap Moi of Kenya; Omar Bango of Gabon; Obiang Nguema of Equatorial Guinea; Blaise Compaore of Burkina Faso; Denis Sassou Nguesso of Congo; Eduardo Dos Santos of Angola; Sadam Hussien of Iraq; Fredinand Marcos of Philippines; Bashar al-Assad of Syria; Baby Doc Duvalier of Haiti; Hosni Mubarak of Egypt; Yoweri Museveni of Uganda; Augusto Pinochet of Chile; Gaddafi of Libya; Ibrahim Babangida of Nigeria; Moussa Traore of Mali; Ali Abdullah Saleh of Yemen; etc. The outrage is that none of these dictators faced justice in their respective countries. For example, Ali Abdullah Saleh of Yemen during his reign of three decades, and until he was deposed through a popular revolt, he stole billions of dollars for his country. A recent UN report revealed the following:

Ali Abdullah Saleh, the former president of Yemen, allegedly siphoned billions of dollars into his own coffers while in power. An expert panel presented the UN Security Council with a report this week outlining the alleged corruption practices of former Yemeni President Ali Abdullah Saleh. The main finding of the report highlighted the fortune - estimated to be between $32 and $60 billion (28 billion-53 billion euros) - which the former strongman amassed during his 33 years in power. (http://www.dw.de/ex-yemen-president-saleh-amassed-up-to-60-billion-un-reports/a-18282279)

Now, despite the public’s portrayal of Issaias that he lives a normal life in Eritrea, beneath the surface, however, he is like the rest of dictators or worse who embezzles, launders, and steals public money. And the recent leaks add Issaias as one of the worst looters to the long list of dictators who suck monies from the public and hide them in offshore bank accounts, mostly under fictitious names. In fact, this latest news confirms what many Eritreans had already known for some time that Issaias and his front men/women were stealing vast wealth of Eritrean people and hiding it in the Swiss bank in a manner of a kleptocratic action.

But the looting needs to be put in the context of a lack of democracy and gross human rights violations in Eritrea:

One, what is important to point out here is that the squandering of Eritrean wealth and siphoning it out to offshore secretive bank accounts is happening in the background of the heavy foreign debt Eritrea is incurring every day and at a time when Eritrean people are being wallowed in deep poverty, misery, malnutrition, disease, and economic meltdown. Money that should have been invested in activities that could have ameliorated these problems is sitting in secret Swiss bank accounts. Yet and true to the nature of Issaias, his regime continues to prey on Eritrean people not only for the day but also for its future (by stealing and stashing money in secret offshore bank accounts) by denying its citizens the chance to escaping poverty and misery.

Two, this grand theft news also came out at a time not only when the dictatorial regime is intensifying its ‘atomize, impoverish, and rule’ policy but also at a time when the basic necessities of life in Eritrea are dependent upon regime’s infamous policy of “rationing economy.” Basic necessities of life are rationed on a strict quota system and chronic shortage of essential goods and services is the norm.

Three, the regime and his corrupt officials are hiding over US$600 million while there is a widespread poverty and large-scale of unemployment and underemployment (paid work is hard to find), which in turn is keeping the average Eritrean totally occupied with a constant anxiety of daily survival instead of focusing on the fight against the regime.

Four, with the galloping inflation and shrinking labor market and the lack of national income, household disposable income has been declining precipitously in real terms in Eritrea. With very low and stagnant salaries, and with lack of income opportunities rampant, most Eritrean families are kept on the edge totally consumed by the constant thoughts and anxieties of daily survival. The absence of “social safety nets” makes the conditions of Eritrean households in general and the destitute or the chronically poor in particular precarious. The reality is that the State of Eritrea is weak, decayed, and venal that lacks rule of law and one that is experiencing a decline in the basic functions of a normal state such as possessing authority and legitimacy, making laws, preserving order, and providing basic economic and social services to its citizens.

Five, looting public money is a threat and that is the State of Eritrea under the dictatorial regime of Issaias is becoming increasingly incapable of providing minimal functions such as defense, law and order, property rights, public health (potable water and sewage disposal), macroeconomic stability, and protection of the destitute, in addition to the failure of having intermediate public functions such as transport and communications, adequate schools, hospitals, roads, harbors, rail infrastructure, sanitation facilities, electricity, irrigation facilities, pollution control, pension, family allowances, and health, life, and unemployment insurance. Such a vicious cycle of declining legitimacy, fiscal mismanagement, and the ever growing erosion of legitimacy as a result of decline in public services and denial of fundamental rights and freedoms are contributing to the country’s economic incapability and political instability.

Six, the looting of millions of public money is a reflection how deep the State of Eritrea is privatized and appropriated by the political elite, how it lacks economic institutions and good governance, and how it encourages capriciousness and predatory behavior. Simply put, the disclosure of the looting shades some light on how far the regime of Issaias has gone to become a kleptocratic regime with no concern to the institutional foundation of the economy and the State of Eritrea. What we have in Eritrea is “a political institutional failure” and a wanton disregard for the rule of law and individual liberties.

The Eritrean predatory state is also patrimonial that controls all spheres in Eritrean society by establishing a personalized relationship between a patron (the regime) and clients of the regime, commanding unequal wealth, status, or influence, based on conditional loyalties that involve mutual benefits. Such form of administration also lacks the bureaucratic separation of the private and the official sphere because both political administration and political power are treated as purely the personal affairs of Issaias.

The looting of Eritrea’s wealth is also occurring because the country is suffering from lack of professional bureaucrats and civil servants (what we have is military generals and officers), as well as from the lack of both meritocracy and rule-governed behavior throughout the state apparatus, which is put in place by design to make corruption and embezzlement of the public wealth much easier. In truth, the state operates according to the whims of Issaias who functions in patrimonial tradition of an absolute ruler with a clustered presidential clique and untrained bureaucrats who control the state apparatus and siphon public money out to foreign accounts. Issaias uses state power to reward rent-seeking behavior and his regime gains from extensive unproductive activities characterized by sophisticated smuggling networks. These smuggling networks that operate under Issais and his band of corrupted cohorts are not limited to smuggling in and out of Eritrea’s wealth, but also smuggling out people (young and old, men and women) from Eritrea to neighboring countries by being the main actors in the international human trafficking networks. The money exhorted from the victims of this unholy and criminal activity fills the coffers of the Eritrean regime. The regime also collects a large of amount money from dubious mineral extraction activities (both royalties and concession fees) and in the absence of transparency, accountability and external audit all these monies get siphoned out to offshore bank accounts in Switzerland and other havens.

In all, the message is issaias is not only a brute dictator who continues to torture, kill, and violate Eritrean people’s fundamental human rights and freedoms, but also he is a kleptocratic leader who is involved in stealing millions of dollars from the treasury of the country, which is shrinking the country’s economy in real terms and deteriorating the life standard of Eritreans to the extreme. The portrayal of Issaias that he lives a normal life is simply the talk of his spin doctors who have a high stake in the continuation of the kleptocratic system in Eritrea. They do this by hiding everything from the public scrutiny.

The other message is that the disorganization of the Eritrean opposition and its civil society is becoming the sine qua non political survival for Issaias’ regime. If there is a lesson to learn from this grand theft is simply to ask ourselves: Are we doing enough to get rid of the regime before it becomes too late and the State of Eritrean decays irreversibly?