The bad boy of the Horn of Africa: How Eritrea’s
strongman uses Kenya as a terror finance hub
07 August, 2011 | By Christine Mungai (The East African)
----------------------------------------------------------------------------------
In early July, as Kenya’s President Mwai Kibaki headed to Addis
Ababa to chair a meeting of the Intergovernmental Authority on
Development (Igad), a six-country partnership formed to address
issues of drought, security and development in the Horn of Africa, he
sounded a stern warning to Eritrea.
For Kibaki, a president who is not known for his love of dramatic
public gesture, to adopt a hostile posture against another country,
there must have been more to the issue than the government was
revealing to the public.
In March, Ethiopia’s Prime Minister Meles Zenawi — whose country
has a strong security partnership with Kenya — had also warned that
his government would use “all possible means” to depose Eritrea’s 67-
year old strongman Isaias Afewerki, with whom he had fought a
bloody secessionist war that killed 70,000 people between 1998 and
2000.
However, with the release of the UN Monitoring Group report on
Somalia and Eritrea last week, it is now becoming clearer why
Afewerki has gained the reputation of the bad boy of the Horn of
Africa, a pariah state under international sanctions for sponsoring
terrorism in the region.
While Eritrea has in the past been repeatedly accused of supporting
Somalia’s Islamist militia Al Shabaab, a charge it strenuously denies,
the current report catalogues Afewerki’s growing notoriety in the
world of terrorism finance, and in particular the global web through
which these funds are routed, with Kenya serving as a global
transaction distribution hub.
The report details the country’s activities in funding the terror group,
following the money trail from its citizens in the diaspora in Europe
and North America, through Dubai and the Eritrean embassy in
Nairobi, and into the hands of Al Shabaab, all the while concealed in
convoluted and opaque informal financial networks.
The details of Eritrea’s destabilising role in the Horn of Africa are
chilling, and would make good fodder for an action flick if only they
were the stuff of fiction. The implications for the security of the greater
East African region are deep and pertinent, so much so that the
typically restrained President Kibaki came out strongly to chide
Eritrea for supplying arms to Al Shabaab, calling upon Igad, which he
chairs, to rein in the rogue state.
The report states that Eritrean support to armed opposition groups
has routinely involved cash payments to members of rebel groups.
The country only has a gross national income per capita of $360,
among the lowest in the world. However, analysts say that in spite of
its relative poverty, Eritrea’s ingrained siege mentality drives its foreign
policy agenda relentlessly towards military activity, directing much of
its revenue to armed opposition groups throughout the region, in the
spirit of “my enemy’s enemy is my friend.”
Proxy war
The enemy in this case is Eritrea’s former colonial master Ethiopia.
For both these countries, Somalia is merely the theatre of a raging
proxy war, an extension of their longstanding border dispute, with
each side supporting various rival factions and administrations since
1998. Al Shabaab is thus propped up by Eritrea’s determination to
keep Ethiopia “off-kilter and overstretched,” according to British
journalist Michela Wrong, writing in the Financial Times. Ms Wrong
has written a bestselling book I Didn’t Do It for You, on the country’s
struggle to free itself from various occupiers.
According to the report, Eritrea justifies its actions in Somalia by
pointing to Ethiopia’s failure to implement the UN ruling of arbitration
on the disputed border, and the continued presence of Ethiopian
civilian officials and military forces on territory awarded to Eritrea.
The UN Monitoring Group indicates that cash transfers to Al
Shabaab are facilitated by a vast and complex informal economy
through which senior officials of the Eritrean government and ruling
People’s Front for Democracy and Justice (PFDJ) collect and control
hundreds of millions of dollars each year in unofficial revenues, largely
from taxation of Eritreans in the diaspora, and private business
arrangements involving PFDJ-run companies or business partnerships
abroad.
The report highlights that essentially, Eritrea maintains two parallel
economies: A formal economic system presumably managed by the
state, and an elaborate, largely offshore financial system controlled by
powerful officials of the government and ruling party. The formal
economic system involves transactions almost exclusively in nakfa, the
non-convertible Eritrean national currency, and suffers from a chronic
hard-currency deficit that theoretically makes it extremely difficult for
the country to provide financial support to foreign-armed groups.
However, the report indicates that the informal, PFDJ-controlled
economy involves a much higher proportion of hard-currency
transactions than the formal economy and is managed almost entirely
offshore through a labyrinthine multinational network of companies,
individuals and bank accounts, many of which do not declare any
affiliation to PFDJ or the Eritrean state. Although it is impossible to
obtain reliable figures about the size of this unofficial economy, it is
apparently more than sufficient to fund external operations such as Al
Shabaab.
The most significant source of revenue for PFDJ is the imposition of a
2 per cent income tax on Eritrean nationals living abroad, who number
an estimated 1.2 million, or 25 per cent of the total population, and
are concentrated in North America, Europe and the Middle East.
Courtesy
strongman uses Kenya as a terror finance hub
07 August, 2011 | By Christine Mungai (The East African)
----------------------------------------------------------------------------------
In early July, as Kenya’s President Mwai Kibaki headed to Addis
Ababa to chair a meeting of the Intergovernmental Authority on
Development (Igad), a six-country partnership formed to address
issues of drought, security and development in the Horn of Africa, he
sounded a stern warning to Eritrea.
For Kibaki, a president who is not known for his love of dramatic
public gesture, to adopt a hostile posture against another country,
there must have been more to the issue than the government was
revealing to the public.
In March, Ethiopia’s Prime Minister Meles Zenawi — whose country
has a strong security partnership with Kenya — had also warned that
his government would use “all possible means” to depose Eritrea’s 67-
year old strongman Isaias Afewerki, with whom he had fought a
bloody secessionist war that killed 70,000 people between 1998 and
2000.
However, with the release of the UN Monitoring Group report on
Somalia and Eritrea last week, it is now becoming clearer why
Afewerki has gained the reputation of the bad boy of the Horn of
Africa, a pariah state under international sanctions for sponsoring
terrorism in the region.
While Eritrea has in the past been repeatedly accused of supporting
Somalia’s Islamist militia Al Shabaab, a charge it strenuously denies,
the current report catalogues Afewerki’s growing notoriety in the
world of terrorism finance, and in particular the global web through
which these funds are routed, with Kenya serving as a global
transaction distribution hub.
The report details the country’s activities in funding the terror group,
following the money trail from its citizens in the diaspora in Europe
and North America, through Dubai and the Eritrean embassy in
Nairobi, and into the hands of Al Shabaab, all the while concealed in
convoluted and opaque informal financial networks.
The details of Eritrea’s destabilising role in the Horn of Africa are
chilling, and would make good fodder for an action flick if only they
were the stuff of fiction. The implications for the security of the greater
East African region are deep and pertinent, so much so that the
typically restrained President Kibaki came out strongly to chide
Eritrea for supplying arms to Al Shabaab, calling upon Igad, which he
chairs, to rein in the rogue state.
The report states that Eritrean support to armed opposition groups
has routinely involved cash payments to members of rebel groups.
The country only has a gross national income per capita of $360,
among the lowest in the world. However, analysts say that in spite of
its relative poverty, Eritrea’s ingrained siege mentality drives its foreign
policy agenda relentlessly towards military activity, directing much of
its revenue to armed opposition groups throughout the region, in the
spirit of “my enemy’s enemy is my friend.”
Proxy war
The enemy in this case is Eritrea’s former colonial master Ethiopia.
For both these countries, Somalia is merely the theatre of a raging
proxy war, an extension of their longstanding border dispute, with
each side supporting various rival factions and administrations since
1998. Al Shabaab is thus propped up by Eritrea’s determination to
keep Ethiopia “off-kilter and overstretched,” according to British
journalist Michela Wrong, writing in the Financial Times. Ms Wrong
has written a bestselling book I Didn’t Do It for You, on the country’s
struggle to free itself from various occupiers.
According to the report, Eritrea justifies its actions in Somalia by
pointing to Ethiopia’s failure to implement the UN ruling of arbitration
on the disputed border, and the continued presence of Ethiopian
civilian officials and military forces on territory awarded to Eritrea.
The UN Monitoring Group indicates that cash transfers to Al
Shabaab are facilitated by a vast and complex informal economy
through which senior officials of the Eritrean government and ruling
People’s Front for Democracy and Justice (PFDJ) collect and control
hundreds of millions of dollars each year in unofficial revenues, largely
from taxation of Eritreans in the diaspora, and private business
arrangements involving PFDJ-run companies or business partnerships
abroad.
The report highlights that essentially, Eritrea maintains two parallel
economies: A formal economic system presumably managed by the
state, and an elaborate, largely offshore financial system controlled by
powerful officials of the government and ruling party. The formal
economic system involves transactions almost exclusively in nakfa, the
non-convertible Eritrean national currency, and suffers from a chronic
hard-currency deficit that theoretically makes it extremely difficult for
the country to provide financial support to foreign-armed groups.
However, the report indicates that the informal, PFDJ-controlled
economy involves a much higher proportion of hard-currency
transactions than the formal economy and is managed almost entirely
offshore through a labyrinthine multinational network of companies,
individuals and bank accounts, many of which do not declare any
affiliation to PFDJ or the Eritrean state. Although it is impossible to
obtain reliable figures about the size of this unofficial economy, it is
apparently more than sufficient to fund external operations such as Al
Shabaab.
The most significant source of revenue for PFDJ is the imposition of a
2 per cent income tax on Eritrean nationals living abroad, who number
an estimated 1.2 million, or 25 per cent of the total population, and
are concentrated in North America, Europe and the Middle East.
Courtesy
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