Do
sanctions work? The case of Eritrea says “no.”
21.01.2022
Do sanctions work ? The case of Eritrea says “no” | Democracy in Africa
Kjetil Tronvoll & Mohamed Kheir Omer 2 Years Ago113 Mins
Eritrea has lived under United Nations economic sanctions for more than
ten years without any notable impact on its politics or economy. Due to its
covert economic operations and owing to weak and ineffective enforcement,
Eritrea evaded the objective of the sanctions. A new unilateral sanction regime
was recently re-imposed by the United States on the belligerent Horn of Africa
nation – will the impact be different this time around?
The U.S. Treasury imposed economic sanctions in November
2021 on the Eritrean ruling party, the armed forces, and a slew of Eritrean
businesses, institutions, and individuals. The measure was in response to the
growing humanitarian and human rights crisis in Tigray, Ethiopia, where the
Eritrean armed forces reportedly committed widespread atrocities, which may
amount to war crimes, according to the Ethiopian Human Rights Commission and UN.
In August last year, the U.S. Treasury sanctioned the Eritrean army’s chief of
staff, General Filipos Woldeyohannes, for the same reasons. Those sanctions
were preceded by E.U. sanctions on Eritrea’s National Security Office in
March 2021. Thus, Eritrea and its officials have joined the club of more than two dozen countries and
more than 6,000 companies, individuals, and groups sanctioned by the US.
But will they work?
Old or new sanctions, the same sins
The new sanction regime on Eritrea comes only three years after the UN
Security Council lifted the old sanctions. The Eritrean regime has been at war
with its neighbours since it declared independence in 1993, after a 30-year
war of liberation from Ethiopia. After conflicts with Sudan, Yemen,
Ethiopia, and Djibouti during its first decade as an independent nation,
President Isaias Afwerki turned his eyes on Somalia and reportedly started to
support the Islamic rebel group Al Shabaab around 2007.
Hence, the UN Security Council imposed an arms
embargo on the Isaias regime in 2009, as well as travel and economic sanctions,
for its links to Al Shabaab and for refusing to withdraw its troops from a
disputed territory, namely Djibouti. The core criticism of Eritrea at the time
was that its aggressive foreign policy had destabilised the fragile political
context in the Horn of Africa.
In 2018, Ethiopia’s new Prime Minister, Abiy Ahmed, helped the regime in
Asmara emerge from isolation and picked up a Nobel prize along the way when he
signed a peace agreement with Eritrea in 2018. Subsequently, Ethiopia employed
its leverage to help lift
all the sanctions imposed on Eritrea.
It soon became clear, however, that this rapprochement was not intended
to ensure long-term peace but was rather a ploy by Isaias Afwerki to once
again go to war against his arch-enemy, the Tigray People’s Liberation Front
(TPLF), this time with the support from the Ethiopian government itself.
Why sanctions failed
The informal and clandestine nature of the
Eritrean government’s businesses and money-laundering operations makes them
difficult to target with a formal sanction regime. Eritrea runs a vast and
complex informal economy through which senior officials in the government and
the ruling People’s Front for Democracy and Justice (PFDJ) party collect and control hundreds of
millions of dollars each year in unofficial revenue streams, mainly from
(partly coerced) taxation of Eritreans in the diaspora and private
business arrangements involving PFDJ-run companies or business partnerships
abroad.
Some of these enterprises, which are owned by government-controlled
conglomerates, such as engineering and construction companies, operate
abroad. As a consequence, Eritrean government-owned revenue is “deposited” with
a new class of Eritrean diaspora millionaires in South Sudan, Kenya, Uganda,
and Angola, who are closely linked to military officials at home. The regime
also runs small businesses across the world, including money transfers, bars,
and restaurants, that operate simultaneously as instruments of surveillance of
Eritreans abroad.
The Red Sea Corporation, one of these government-owned conglomerates,
has been named an octopus entity involved in multiple
sectors that serve the ruling elite’s interests. The Red Sea Corporation also
allegedly exports illicit gold and large quantities of alcoholic beverages to
Sudan through individual trading networks.
The Eritrean government is moreover experienced in manipulating regional
currency differences, a craft they developed during the early 1990s when
they siphoned off millions of dollars from Ethiopia by using a different
exchange rate to the Ethiopian currency in Eritrea than that officially set by
the Ethiopian National Bank (ENB).
General Tsadkan, one of the leaders of Tigray Defence Forces, claimed in
a recent interview that the Eritrean
regime has more than 20 official foreign exchange bureaus in Ethiopia today –
replicating their strategy from the 1990s – which they use to make a profit
while laundering the state’s foreign currency – an accusation supported
off-the-record by international diplomats.
Taken together, these covert operations, the manipulation of the
informal economy, ineffective implementation, and the use of international
partners to facilitate revenue flows outside formal channels enabled Eritrea
to survive the decade-long UN sanctions. In doing so, they have consistently
relied on trusted “partners in crime.” First, Libya was such a trusted partner under
President Gaddafi; after his fall, Eritrea engaged the Gulf countries, notably Qatar and Iran, before shifting focus to Saudi Arabia and
the UAE in 2016.
What could be done to make sanctions effective?
The effectiveness of sanctions – and how to make them effective – is
disputed.
Experts indicate that for US sanctions
to be effective, they need to be specific and to identify and target sources of revenue that
keep the regime afloat and key players who control the funding. It helps also
if those entities sanctioned have strong economic ties to the US, which makes
it possible to go after the money directly.
For the sanctions on Eritrea to be effective, they must thus hit the
economic nerve centre of the regime surgically and unveil its covert money
laundering operations in Africa and the West. It may thus take considerable
time and effort to be able to identify the appropriate business enterprises and
individuals responsible.
For symbolic reasons, an effective strategy would probably also need to
name and target President Isaias Afwerki in person and his main functionaries.
Furthermore, all Eritrean ambassadors and consuls would need to be sanctioned
for two reasons: first, they are vested with the responsibility to oversee the
illegal activities in the countries they are accredited to, and secondly, it
sends a strong signal to host governments that they harbor sanctioned
diplomats.
To work, the sanctions would also need to target the primary known
revenue sources of the Eritrean government, such as Bisha gold mine and the new
Potash Colloli development and the foreign companies involved in those
projects. All countries that help facilitate revenue streams, particularly Saudi
Arabia and the United Arab Emirates, would need to be warned, and the illegal
trade with Sudan and Ethiopia would need to be monitored.
To date, the U.S. imposed sanctions on Eritrea have not forced the
Eritrea government to stop meddling in Ethiopian affairs, and it seems unlikely
that they will do so in the future. In a recent interview with the local government,
the Eritrean president described the sanctions as ‘unjust and unfair’ and argued that it was imposed by special “interest groups” in the USA.
Isaias admitted that the sanctions hurt but added that they made
Eritrea even more resilient.
The U.S. has suspended development aid to Ethiopia, as well as the country’s status under AGOA, due to the
atrocities that its troops have committed during the conflict in Tigray.
However, Washington has yet to activate direct sanctions under the Executive Order sanctions regime, although
Ethiopia has been warned about such possibilities.
So far, however, neither international criticism, nor the recent
warnings, have persuaded the Ethiopian government to stop its aerial bombardment of targets in Tigray
– or to allow humanitarian assistance to its famine-stricken population. Thus,
sanctions or no sanctions, the most important net result is likely to remain
the same: the humanitarian disaster in Ethiopia will continue.
Kjetil Tronvoll (@kjetil.tronvoll), Professor (of peace and conflict
studies), Oslo New University College
Dr Mohamed Kheir Omer (@mkheirom), African-Norwegian writer with
interest in the Horn of Africa, based in Norway
