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Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).

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ERITREA

	FY 1997	FY 1998	FY 1999
	Actuals	Estimate	Request
Child Survival and Disease..........	$2,500,000	$ 6,300,000	$3,000,000
Development Assistance..............	$7,000,000	$ 4,350,000	$7,000,000
P.L. 480 Title II...........................	$ 735,200	$ 423,000	$1,956,375
P.L. 480 Title III..........................	$15,000,000	$5,000,000	$5,000,000

Introduction

Eritrea is Africa's newest nation, having won a 30-year war for independence from Ethiopia in 1991 and formalizing its independence with a popular referendum in 1993. The war left Eritrea with devastated institutions, infrastructure, and an unskilled human resource base; however, it also forged a strong determination to build a self-reliant nation. Eritrea controls two deep water ports and shipping lanes in the Red Sea. It is also a principal life line for humanitarian assistance to the Horn region. Given its strategic position and the leadership role it plays in the Horn, USAID assistance to Eritrea supports U.S. interests by promoting a market-based economy and the emergence of a democratic government in this historically volatile region. USAID/Eritrea's program incorporates the principles of President Clinton's Greater Horn of Africa Initiative by fully engaging Eritrea as a partner with full ownership in its long-term strategy and program implementation. This approach has earned USAID a high degree of confidence and collegiality with the Government of Eritrea.

The Development Challenge

Eritrea's major challenges are several: rebuilding infrastructure; building education and health systems; developing a broad-based private sector; and strengthening human, technical and management capacity. Foremost among its political goals are strong local and national government, a democratic constitution and legislature, and revitalized relationships with neighboring states. Despite many constraints, the potential for rapid development in Eritrea is high. The country has a productive labor force, an effective government, and a location advantageous to trade. With little national or international debt, Eritrea wishes to achieve self reliance within a decade.

USAID has been successful in helping Eritrea demobilize thousands of ex-fighters and resettle refugees. USAID is currently strengthening Eritrea's primary health care system and supports training and institutional linkages to build competent governance. USAID contributes to private enterprise development through the expansion of rural banking and support services to rural entrepreneurs. The challenge for USAID is to develop new ways of working with the Government of the State of Eritrea (GSE) as an equal partner in the development process. This has meant a more involved consultative process and more modest achievements in the short term, even as USAID assistance is building a base for long-term sustainable development.

Other Donors

Overall donor assistance for 1997 was $150 million, of which the United States provided about 15%. Italy, Germany, the European Union (EU), and the United States are currently the largest donors. The Scandinavian countries, the United Nations Development Program (UNDP), and the United Nations Children's Fund (UNICEF) also have sizeable assistance portfolios. The World Bank, Saudi Arabia, and Kuwait have negotiated several major loans. Through modest and carefully targeted initiatives, USAID assistance has also leveraged significant support from other donors in the areas of health, judicial training, and public administration.

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FY 1999 Program

USAID's program goal is to enable Eritrea to become a food secure, democratic, and leading nation in the region through key investments in primary health care, rural enterprise, and governance. Responding to Eritrea's determination of its own needs, USAID has a "investment partnership" with the Eritrean government to build the human capital and key institutions in these sectors which underpin successful development. Activities within these three sectors are cross-cutting, thus strengthening the effectiveness of the overall program. Based on the principle of Eritrean ownership of the development process, this partnership ensures sustainable results from U.S. assistance.

Strategic Objective 1: Increased Use of Sustainable, Integrated Primary Health Care Services: USAID assistance is improving health care service delivery in the central, southern, and western zones of the country. Through its health and population program with the Ministry of Health (MOH), USAID is facilitating the decentralization of health services. Technical assistance focuses on strengthening logistical, management, and financial systems and increasing the demand for health services nationally.

USAID-sponsored technical assistance has enabled the MOH to develop a human resources plan; explore options for cost recovery; take initial steps toward decentralization; upgrade the capabilities of rural health providers; and expand child immunization services. Continued progress in 1999 will focus on promoting decentralized planning and implementation, increasing cost recovery, improving the management of health commodities and pharmaceuticals, and strengthening the delivery of health services.

Strategic Objective 2: Increased Income of Enterprises, Primarily Rural, With Emphasis on Exports: The primary guarantor of food security in Eritrea will be a robust and diversified rural economy. Therefore, USAID's objective is to help make food more available in rural areas through expanding trade and private enterprises. USAID is building on its past achievements in improving livelihoods for 2,400 refugee families from Sudan and hundreds of ex-fighters; preventing locust damage to grain harvests; providing food in food-deficit areas (500,000 beneficiaries); and helping Eritreans shift away from government food handouts to create a cash food economy and safety net. The 1999 Rural Enterprise program provides a combination of bilateral and P.L. 480 resources to support rural banking, farmer associations, cooperatives, and enterprises; the rebuilding of rural roads; and the expansion of rural income and trade.

Strategic Objective 3: Increased Capacity for Accountable Governance at Local and National Levels: USAID has initiated a governance capacity-building effort to support the establishment of a democratic government in Eritrea. The focus of this effort has been human capacity at all levels: linkages with U.S. universities in law, public administration, journalism, and political science; support to the Constitutional Commission; in-country training for judges and local officials; and a major training program for government officials abroad.

Although USAID's efforts in this area are relatively recent, intermediate results are already evident. Partnerships have been established between major American universities and Eritrea's university. A broad and successful outreach effort by the Constitutional Commission resulted in the ratification of the constitution. The program for 1999 will continue to develop and improve higher education in Eritrea through linkage programs; build technical and administrative capacity of government officials through graduate training abroad; and strengthen the Central Bank of Eritrea's capacity for better policy decision-making and management.

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ERITREA
FY 1999 PROGRAM SUMMARY
(in thousands of dollars)

USAID Strategic and Special Objectives	Economic Growth & Agriculture	Population and Health	Environment	Democracy	Human Capacity Development	Humanitarian Assistance	TOTALS
S.O.01 Increased Use of Sustainable, Integrated Primary Health Care Services by Eritreans - CSD - DA - P.L.480,Title II	--- --- ---	3,000 700 ---	--- --- ---	--- --- ---	--- --- ---	--- --- ---	3,000 700 ---
S.O.02 Increased Income from Enterprises, Primarily Rural, with Emphasis on Exports - DA - P.L.480,Title II - P.L.480Title III	4,600 --- ---	--- --- ---	200 --- ---	--- --- ---	--- --- ---	--- 1,956 5,000	4,800 1,956 5,000
S.O.03 Increased Capacity for Accountable Governance at Local and National Levels - DA	---	---	---	1,500	---	---	1,500
Totals - CSD - DA - P.L.480,Title II - P.L.480,Title III	--- 4,600 --- ---	3,000 700 --- ---	--- 200 --- ---	--- 1,500 --- ---	--- --- --- ---	--- --- 1,956 5,000		3,000 7,000 1,956 5,000

USAID Mission Director: G. William Anderson

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ACTIVITY DATA SHEET

PROGRAM: ERITREA
TITLE AND NUMBER: Increase Use of Sustainable Integrated Primary Health Care (PHC) Services by Eritreans, 661-SO01
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $3,000,000 CSD; $700,000 DA
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2000

Purpose: To increase use of sustainable integrated primary health care (PHC) services by Eritreans through improving access to and quality of, PHC services. Eritrea's basic package of PHC services includes safe infant delivery, family planning, prenatal care, immunization, the prevention and management of childhood diseases and malnutrition, HIV/AIDS and other sexually transmitted infections.

USAID Role and Achievements to Date: USAID is the Ministry of Health's (MOH) primary donor-partner. USAID is providing the critical inputs necessary for MOH and associated organizations to plan, manage and implement effective and sustainable PHC services. Achievements to date include development of the Safe Motherhood Protocols, the National Drug Policy and the National Standard Treatment Guidelines; a 25% expansion in child immunization since 1994; an increased demand for family planning services; and an increase in domestically iodized salt (towards the elimination of iodine deficiency disorder) from 0% in 1994 to nearly 90% in 1997.

Description: USAID has been a major provider of technical assistance and training to the Ministry of Health since 1994 through the $15 million, five-year Eritrea Health and Population Project. This project provides nine person-years of specialized technical assistance, 300 person-months of training, support vehicles (eight), medical and office equipment and furniture, selected building renovations, contraceptives and essential drugs. Current USAID activities include technical assistance and training in decentralized planning and implementation, logistics management, the development of health finance schemes for cost recovery, service provision and capacity building. Several activities, such as long-term participant training at U.S. universities and a U.S. university linkage program with the University of Asmara-College of Health Sciences, complement and reinforce USAID's strategic objective in governance. Activities are concentrated both nationally and in the three most populated zones of the country, Gash Barka, Central and Southern. While program inputs primarily target the MOH, USAID is also working with the National Union of Eritrean Youth and Students (NUEYS) to enhance access to services, build awareness regarding reproductive health and harmful traditional practices such as female circumcision. USAID technical assistance will enable the development of the requisite management systems, institutional structures, technical capacity, and client awareness for effective and sustainable primary health care service delivery. This project is supplemented by one grant to a U.S. PVO and one to UNICEF. Grant activities are complementary to EHP Project activities in that they target increased access and quality of PHC services through improved service delivery in rural areas, expanded vaccination coverage and an increase in basic maternal and child health care services. The MOH's cautious use of resources and cost recovery policy ensures sustainability of these activities. The substantial capital investment in building and equipping new rural health care facilities by the government and other donors will also contribute to achieving this objective.

Host Country and Other Donors: The MOH provides the total cost of its central and local staff, as well as salaries for medical staff at health centers and stations. The MOH also covers the major portion of its other operating costs. USAID works closely with United Nations Fund for Population Activities (UNFPA), World Health Organization (WHO) and UNICEF; however, it is important to note that donor coordination is within the purview and mandate of the MOH. UNFPA will procure one million condoms for the USAID-funded condom social marketing activity as part of their program of improved service delivery in reproductive health. Through USAID grants to UNICEF, immunization rates have increased and infrastructure for salt iodization has been developed. USAID will develop two additional grants to

UNICEF for the procurement of essential drugs and the construction of three pharmaceutical warehouses. The WHO has a program with the Italian Cooperation which supports the improvement of the delivery of PHC services through infrastructure support, equipment, communicable disease control, development of human resources and capacity building at all levels. Several donors -- Germany, Italy and the European Union -- have provided concessional funding for the construction and renovation of health facilities, particularly in the rural areas. The World Bank has negotiated a loan to support the construction of two regional hospitals and to promote capacity-building and sustainability of health services. World Bank and other donor activities complement USAID's investments in the Eritrean health sector.

Beneficiaries: Approximately one million mothers and children under five in the three USAID target zones are the primary direct beneficiaries of these activities, although it is expected that these activities will have nationwide impact, benefitting an additional 500,000 mothers and children. It is also important to highlight the MOH as a direct beneficiary of USAID technical assistance since the transfer of skills and knowledge promotes its capacity to plan and manage the implementation of PHC services and a quick graduation from donor assistance.

Principal Contractors, Grantees, or Agencies: Basic Support for Institutionalizing Child Survival (BASICS); Family Planning Service Expansion And Technical Support (SEATS); Opportunities for Micronutrient Interventions (OMNI), Population Services International (PSI); Africare; UNICEF; a university consortium including Johns Hopkins, Berkeley, and State University of New York/Stoneybrook.

Major Results Indicators:		
			 		Baseline	 	Target
			
Full immunization coverage	41%  (1995)	 	  75% (1999)

Couple Years (Contraceptive) Protection  	5900 (1995)	   	 22,000 (1999)
 (in target zones)

Prenatal Consultation during pregnancy       	49% (1995)		 65% (1999)
(% of births where mothers were
attended to at least once during pregnancy
by medically trained personnel for reasons related to pregnancy)

Increase in percent of service delivery points	0 (1994)		20% (1999)
in target zones where Integrated Management
of Childhood Illnesses (IMCI) is offered

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ACTIVITY DATA SHEET

PROGRAM: ERITREA
TITLE & NUMBER: Increased Income of Enterprises, Primarily Rural, with Emphasis on Exports, 661-SO02
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $4,800,000 DA; $1,956,375 P.L.480 Title II; $5,000,000 P.L. 480 Title III
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To increase the ability of the rural population to access food by increasing rural enterprises, employment, income, and exports.

USAID Role and Achievements to Date: Efforts by USAID to build a development partnership with the Government of the State of Eritrea (GSE) provided the framework for a new development assistance program, the Rural Enterprise Investment Program (REIP), which was signed in September 1997. Technical assistance has promoted improved banking services and the first steps toward the expansion of credit services and savings mobilization in rural areas. Successful trials at a USAID-supported experimental farm have led to the decision to invest in a larger, commercial endeavor, utilizing drip irrigation systems for the production of high value crops. The Title III food assistance program has helped the GSE to attain two of its four food security targets (increasing the strategic grain reserve to 50,000 metric tons and decreasing non-emergency food aid to zero) two years early. By monetizing Title III wheat, funds have been generated for rehabilitating secondary rural roads, thus increasing market access to previously isolated rural areas, and pulling them into the national economy for the first time. The Title II irrigation program is substantially expanding new production areas.

Description: USAID is supporting Eritrea's effort to achieve food security and to build a vibrant, free market economy. The Mission's Rural Enterprise Investment Partnership (REIP), a five-year, $11.6 million program of assistance to rural based enterprises, promotes sustainable food security by moving beyond food assistance to create viable productive enterprises. It aims to jump-start Eritrea's critically underdeveloped enterprise sector, build rural-urban linkages, and support an export-oriented growth strategy. A Rural Enterprise Unit funded under this program will provide technical services and training to small and medium-sized enterprises to improve their productivity and marketing. A key component of this Partnership is an Enterprise Investment Fund which will finance the import of critically needed equipment and technology for commercial agriculture and rural based enterprises, and will make investments in enterprises which have the potential for increasing employment and generating exports. Loans will begin to be made in mid-1998. Two additional elements support the REIP program: Trade & Investment Facilitation Fund (TIFF) and Critical Rural Infrastructure Support (CRIS) which provide the means to underwrite reverse trade missions to the United States and to strengthen the human resource capacity of government staff working in irrigation, agribusiness and rural enterprise sector development. The Ministry of Construction is utilizing the proceeds resulting from the Title III program to rehabilitate key rural secondary roads in the target area. This road rehabilitation activity has opened market access to Eritrea's rural area with the most potential for commercial agriculture. Preliminary results from these improvements in infrastructure will be increased settlement and greater economic activity in domestic, regional and international markets.

Host Country & Other Donors: Several donors, including Germany, Italy, the European Union (EU), and the World Bank, are providing concessional assistance for rural road and agricultural development projects. The United Nations Development Program (UNDP) has a microfinance program with the associations and cooperative groups in marine fisheries. USAID collaborates with the EU in areas of food policy and with the Government of Israel on irrigated horticultural production. USAID's lead role in negotiating a bilateral food aid grant agreement has expanded the USG's influence beyond a level indicated by the comparatively modest amount of assistance provided.

Beneficiaries: The direct beneficiaries of USAID assistance will be approximately 10,000 rural households. However, the entire rural population of Eritrea's central-western zone of approximately one million will ultimately benefit from greater food availability. An additional 10,000 people are benefitting from the P.L. 480 Title II irrigation project in the eastern plain.

Principal Contractors, Grantees, or Agencies: U.S. Department of Agriculture, Africare, Virginia Polytechnic and State University, Centre for International Cooperation of Israel's Ministry of Foreign Affairs, and Agricultural Cooperative Development International.

Major Results Indicators: 
	Baseline		Target
	(1997)

Decrease in non-emergency food aid	75,000 mt		 0  (1997)
Strategic food grain reserve	0		 50,000 MT (1997)
Secondary Roads Rehabilitated	0		 200 km (1999)
Additional number of enterprises
  receiving banking services	0		 350  (1999)

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ACTIVITY DATA SHEET

PROGRAM: ERITREA
TITLE AND NUMBER: Increased Capacity for Accountable Governance at Local and National Levels, 661-SO03
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $1,500,000 DA
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To build the skills, knowledge and institutional infrastructure necessary to establish and strengthen accountable governance in Eritrea.

USAID Role and Achievements to Date: As USAID's role is primarily that of human resource capacity building and institutional strengthening for better public administration in Eritrea, the influence of USAID's assistance will likely be widespread and long-term. While USAID's activities are relatively new, three achievements are noteworthy: the establishment of an influential, U.S.-Eritrea university partnership in the critical areas of law, journalism, political science and public administration; ratification of the Eritrean national Constitution through a three-year participatory process, with extensive civic education and outreach to all sectors of Eritrean society; and improved management in monetary and fiscal policy by the Central Bank of Eritrea.

Description: Since winning independence in 1991, Eritrea has been in a transitional stage of building the institutions and processes required for an accountable government. The USAID strategy for accountable governance comprises activities in support of human and institutional building in selected government institutions. The U.S. Government's partnership with Eritrea, in supporting its human resources development strategy, will be key to achieving Eritrea's objective of establishing an efficient, lean and effective government. USAID-supported activities include a partnership between the University of North Carolina and the University of Asmara featuring the exchange of faculty and graduate students in law, journalism, and public administration along with the strengthening of Asmara University's facilities and equipment. USAID will also provide a capacity-building grant that supports in-country training programs for administrators and middle level officials through strengthening the new Eritrean Institute of Management. A program to send selected officials to the United States and third countries for specialized training has been initiated. Continued progress in institutional capacity building will also be achieved through a USAID-funded grant to the United Nations Development Program (UNDP) to help train, advise, and equip Eritrea's Central Bank to improve monetary and fiscal management; and a grant to the National Council of Negro Women for building the institutional capacity of the National Union of Eritrean Women.

Host Country and Other Donors: The United States, is now one of the leading donors in building accountable governance through supporting the GSE Human Resources Development Program. Other donors such as Germany, Norway, Canada, the Netherlands and UNDP, have been active in Eritrea's governance programs and projects. The World Bank has piloted a Community Development Fund which involves public administration and governance. The Bank has also negotiated a major program in support of the Human Resources Development Program of Eritrea.

Beneficiaries: The direct beneficiaries are the civil servants who are expected to receive training from the U.S.-Eritrea development partnership. Also benefitting directly are the various government institutions and National Union of Eritrean Women which will acquire U.S. Government-financed computers, vehicles, and equipment and furniture, and will participate in activities designed to strengthen their institutional capacities. Ultimately, the entire nation will benefit from more competent and accountable governance.

Principal Contractors, Grantees, or Agencies: These comprise University of North Carolina, National Council of Negro Women, the Universities of Western Michigan, Cornell and SUNY/Albany, the United States Information Agency, the National Center for State Courts, and World Learning.

Major Results Indicators:
	Baseline		Target
Constitution Ratified	N/A		Mid-1997 (Completed)
Representative Elections      	N/A		Late 1998
Number of long-term training  participants	
studying abroad	0		6  (1998)
Updated curriculum in use for the
  College of Business and Economics and the 
  Eritrean Institute of Management	N/A		1999

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