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The Economic Cost of the Eritrean Civil War



The civil war in Eritrea has disrupted trade flows and regional integration efforts in East Africa. Eritrea's geographical location and its potential as a transit hub for regional trade have been impacted. The conflict has led to the closure of borders, hindered cross-border movements, and disrupted transportation routes, affecting the smooth flow of goods and services.


The civil war has created an environment of instability, insecurity, and uncertainty, leading to an economic downturn. Ongoing conflict and political instability can discourage foreign direct investment (FDI) and limit economic growth. The presence of conflict can deter businesses from expanding or establishing operations in the region, impacting job creation and economic development.


The war has caused a significant influx of refugees fleeing Eritrea into neighbouring countries, particularly Ethiopia and Sudan. The hosting of refugees places a strain on the resources and economies of these countries, impacting their ability to allocate resources for development projects and economic growth. International humanitarian assistance may be required to support the refugee population, diverting resources away from other development initiatives.


Eritrea has raised regional security concerns. Ongoing conflicts and political instability can have spillover effects, leading to increased tensions, conflicts, and security challenges in neighbouring countries. This can hinder regional cooperation, disrupt business activities, and impact investor confidence.


Agricultural and Food Security Challenges, conflict and displacement can disrupt agricultural activities and food production in Eritrea and neighbouring countries. Displacement of farmers, destruction of infrastructure, and disruption of supply chains can lead to food shortages, increased food prices, and food insecurity. This poses challenges to the livelihoods and well-being of communities in the region.


Eritrea has contributed to a brain drain as skilled professionals, intellectuals, and young people seek safety and opportunities in other countries. The loss of human capital can hinder economic development and innovation, as skilled individuals leave the region, impacting sectors such as healthcare, education, and technology.


The civil war in Eritrea highlights the importance of regional cooperation and peacebuilding efforts in East Africa. Regional organizations, such as the African Union (AU) and the Intergovernmental Authority on Development (IGAD), play a crucial role in promoting peace, stability, and conflict resolution. Strengthening regional cooperation and dialogue can contribute to resolving the conflict and mitigating its economic impact.


It is important to note that the specific economic impacts of the Eritrea civil war can vary across countries and over time. The extent of the impact depends on factors such as the duration of the conflict, the severity of violence, the effectiveness of peacebuilding efforts, and the resilience of the economies in the region.

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