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Cablegate: President Isaias - Bread and Pasta Are Luxuries

VZCZCXRO2097
RR RUEHROV
DE RUEHAE #0325 1700914
ZNR UUUUU ZZH
R 180914Z JUN 08
FM AMEMBASSY ASMARA
TO RUEHC/SECSTATE WASHDC 9748
INFO RUCNIAD/IGAD COLLECTIVE
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKDIA/DIA WASHDC
RUEPADJ/CJTF-HOA J2X CAMP LEMONIER DJ

UNCLAS ASMARA 000325

LONDON AND PARIS FOR AFRICA WATCHERS
DEPT FOR AF/E

SENSITIVE
SIPDIS

TAGS: ECON EAID EAGR PGOV ER
SUBJECT: PRESIDENT ISAIAS - BREAD AND PASTA ARE LUXURIES

REF: A) ASMARA 221 B) ASMARA 225 C) ASMARA 236

1. (SBU) Summary: President Isaias Afwerki appeared to be preparing
the Eritrean people for future reduced supplies of basic foodstuffs
in recent interviews and speeches, including his May 24 Liberation
Day address. High import costs and heavy subsidies have combined to
lead Eritrea's command economy decision makers to substitute locally
grown, but insufficiently produced corn, sorghum, and barley for
imported wheat, rice, and teff, in an apparent attempt to achieve
food security. End Summary.

LIBERATION PERHAPS, BUT NO CHOICE OF FOOD
------------------------------------------
2. (SBU) In his Liberation Day Speech on May 24, Eritrean President
Isaias Afwerki informed the Eritrean people that the 2007 "bumper"
harvest was mismanaged and misallocated, adding some areas of the
country face food shortages. He said further import regulations,
price controls, and "necessary practical measures" will be taken to
deal with Eritrea's food problems. He claimed the global rise of
basic commodity prices is to blame, leading President Isaias to
attempt to "rectify the excessive consumption of wheat," noting that
"seeking to consume white bread and pasta can only be considered as
naivety."

3. (SBU) Isaias repeated these themes in a recent Reuter's
interview, where he stated Eritrea will continue price controls on
agricultural commodities and distribution through state-run outlets.
The president said Eritrea's local climatic conditions are best
suited for corn, sorghum, barley, and lentils, noting "if you depend
on wheat, you're finished." He went on to blame the global increase
in commodity prices for food shortages and commended his
government's overall efforts to work through the problem.

SELF-DEFEATING POLICIES
-----------------------
4. (SBU) Eritrean World Bank Country Manager Chris Lovelace
(protect) characterized the Government of the State of Eritrea's
(GSE) mechanism for dealing with the food crisis as
"self-defeating." The GSE is setting agricultural prices offered to
farmers below the cost of production, but mandating that 100% of the
harvest be sent to the grain board. This attempt to alleviate the
current crisis creates new problems, such as black markets,
hoarding, and reduced production.

WHO NEEDS FOOD AID? THE GSE SAYS "NOT ERITREA"
--------------------------------------------- ---
5. (SBU) The GSE halted the distribution of food aid in 2005/2006,
seizing without permission or compensation 90,000 metric tons (MT)
of humanitarian food aid to implement a "cash for work" program.
The GSE's justification was to promote self-reliance and discourage
the Eritrean people's dependence on freely distributed relief aid.
The GSE failed to engage donors to implement the program, and
subsequently USAID, World Food Program (WFP), and the European
Commission (EC) no longer engage in food aid projects in Eritrea.
UN agencies and other aid organizations claim two-thirds of
Eritrea's people were short of food, but GSE officials have stated
the fears were unfounded and unsubstantiated.

6. (SBU) Comment: The Ministry of Agriculture claims Eritrea
produced 80% of its food needs domestically during the previous four
years of above average rains. Nongovernmental organizations in
Eritrea believe this figure is closer to 60%, and could plummet to
as low as 10% during the next inevitable drought. Even if upcoming
rains are plentiful, the GSE will scramble for hard currency to make
up for this shortfall with imported food. President Isaias' recent
comments indicate the GSE either does not possess or will not
allocate the additional funds necessary to import food at present
levels, presaging hungrier times ahead for Eritrea's already
suffering population. End Comment.
MCMULLEN

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