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Cablegate: Hot and Dry in Keren: The Local Economy Shrivels Up

VZCZCXRO8654
PP RUEHROV
DE RUEHAE #0509 1581437
ZNR UUUUU ZZH
P 071437Z JUN 07
FM AMEMBASSY ASMARA
TO RUEHC/SECSTATE WASHDC PRIORITY 8892
RUCNIAD/IGAD COLLECTIVE
RUEHKM/AMEMBASSY KAMPALA 1061
RUEHLO/AMEMBASSY LONDON 1370
RUEHFR/AMEMBASSY PARIS 1548
RUEKJCS/SECDEF WASHDC
RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC
RUEPADJ/CJTF-HOA J2X CAMP LEMONIER DJ

UNCLAS ASMARA 000509

SIPDIS

SIPDIS
AIDAC

STATE FOR USAID/DCHA/OFDA
NAIROBI FOR USAID/OFDA/ECARO
LONDON FOR AFRICA WATCHERS
PARIS FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: PGOV EAID ECON ER
SUBJECT: HOT AND DRY IN KEREN: THE LOCAL ECONOMY SHRIVELS UP


1. On a recent trip to Keren, Embassy employee observed that
Eritrea's economic crisis appears more acute outside of the capital
city of Asmara. Keren sits 91 km northwest of Asmara in the Anseba
Zone. With a population of 120,000, Keren is a major agriculture
center of Eritrea, particularly for fruits and vegetables. At this
time of year, the farming areas near Keren should be green and lush,
however the farmland is noticeably dry and dusty. A lack of rain
has created a severe water shortage, resulting in long queues of
individuals fetching water for daily use. In addition, as most
water pumps require diesel to operate, a shortage of diesel has
dramatically diminished the farmers' ability to irrigate.

2. Signs of economic strain were also evident in the government
food shops which maintain a minimal inventory of basic items such as
sugar, pasta, coffee, maize, cooking oil and lentils which are
rationed at point of sale at subsidized prices. However, due to
last year's poor harvest and lack of profits, many farming families
do not have the resources to purchase the basic staples, even at
subsidized prices. Local hotel workers told Embassy employee that
since mid-2005 most of the hotels remain vacant, with entire floors
going unused for months for lack of tourists. In addition, hotel
staff commented that two-thirds of their coworkers have lost their
jobs in recent months. Beneficiaries of loans received under
USAID's Humanitarian Assistance Relief Program (HARP) also commented
on their economic difficulties, noting that they are unable to earn
enough money from their work to both support their families and pay
off the loan.

3. Comment: Reports from the field give an early indication of a
drought that could result in an extremely poor crop in the fall.
The early rains in April and May in Anseba and Gash Barka fell short
of expectations and the Anseba Region has become nearly a desert.
With the decreased and erratic rainfall, residents are increasingly
reliant on groundwater resulting in a falling of the groundwater
table and burdening already limited well resources. As a result,
local water experts from UNICEF, the GSE's Office of Water Resources
and the Ministry of Agriculture have all articulated an urgent need
for a thorough groundwater assessment. Farmers near Asmara have
also commented on an impending crisis as the "small rains" of April
were smaller than usual. If rain does not come in the next few
weeks, many Eritrean farmers speculate they are at risk of losing
all of their crops. Combining a local food crisis with the hard
currency challenges will add another strain an already stressed
economy and further aggravate a thoroughly frustrated population.
End Comment.

MCINTYRE

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