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Monday, March 31, 2008

Asmara, Eritrea – Secret Art Deco Capital of Africa & Meeting the Chinese Bankers

Monday 31 March 2008
Asmara, Eritrea – Secret Art Deco Capital of Africa & Meeting the Chinese Bankers
Now in Asmara, capital of Eritrea, staying at Concord Pension, a very nice place right at the heart of this clean, cool city in the highlands. Asmara has some of the cleanest streets of all Africa and everything is very orderly here. The art deco architecture built by the Italians during the colonial days are quite impressive. Mussolini built Asmara with fervor for it represents the first building block of the Italian East African empire that he wanted to found. The city was adorned with the latest architectural fashion of the day – art deco modernism and fascism functionalism.
Asmara, with its Italianate Roman Catholic Cathedral complete with Venetian towers a la St Mark's and numerous el fresco cafes along the key downtown Harnet Ave, looks more like an Italian town than an African capital. The streets are clean and key buildings well-maintained.
Eritreans fought the Ethiopians for 30 years before defeating the Communist Ethiopian army and achieving independence in 1993. Up till recently (and perhaps still do), there is a tremendous sense of national pride and sense of purpose. For the first time on my African journey, I did not have little kids running after me shouting (and often adults too) "China China" as though they were calling for their pet dogs. Eritreans would nod their heads silently to acknowledge me, sometimes saying "Good morning". At the airport last night, several immigration and customs officials already said to me, "Welcome to Eritrea". Eritrean officials are known to be the least corrupt in Africa but as Chinese businessmen told me, they are also among the most stubborn and most inflexible. Eritrean officials are known to stick strictly to the books for fear of being accused of being bribed.
Eritrea's tensions with Ethiopia has been rising since end of last year when Ethiopia refused to withdraw from the disputed Badwe region even after the International Court of Justice had ruled the dispute in Eritrea's favour. Both countries had also mobilized their forces, as some say, in preparation for a second war over this useless piece of desert and savannah. The first was in 2002 resulting in hundreds of thousands dead in these two countries, amongst the world's poorest. UN peace monitors had left the buffer zone between both armies and Eritrea showed its displeasure with perceived UN incompetence in forcing Ethiopia out by deny water and food to UN forces.
As a result, travel permits are now needed by foreign tourists who want to get out of the capital. I dropped by the tourist office at 8am today and applied for travel permits to major towns in the country. Got it by 5:30pm. I went to the Sudan Embassy to enquire about Sudanese visa again. The friendly consul told me that he was only authoried to issue visas to Eritrean citizens. He said I should try the Sudanese embassy in Singapore, but I told him there aren't any in Singapore. He simply shrugged.
At 5pm everyday, the entire city is engaged in that timeless Italian ritual, passeggiata, i.e., strolling up and down the main street to catch up with friends, do window-shopping and generally see how things are in town. I found the streets crowded, especially with retired gentlemen in their suits and ties. All the cafes were full – half the city was having coffee at that time.
With the 2002 war with Ethiopia, current rising tension and the unstable geopolitical situation, there has been little foreign investment in Eritrea. With rising oil prices, the country is now going through tough times. The currency, nakfa, is now under pressure. Official exchange rate is 15 nalfa to the USD, but black market rate is, as I have heard, 19 nafka. The government has enacted laws that imposes huge penalties on unauthorized trade in foreign currencies. When entering the country, one has to register on a special blue form the amount of cash one possesses. Whenever one exchanges money at an authorized shop, that transaction would be noted down on the blue form. When one leaves the country, the remaining foreign currency cash one possesses would be counted against records on the blue form. So one has to be conscious of what was noted earlier and what was changed or spent.
On the plane last night from Djibouti, I had long conversations with a few bankers from China. They are young and educated in the West. They belong to the Ethiopia/Horn of Africa team and are stationed here for up to 2 years (with quarterly home visits to China) just to do deals relating to these few countries (Ethiopia, Eritrea & Djibouti). Think they are on their way to Eritrea to evaluate some projects and they are very knowledgeable about social-economic-political aspects of many African countries – even Somaliland. Certainly very sophisticated people.
China is so involved in Africa that their bank has such teams in over 20 African countries, financing all sorts of projects. These teams are not branches, hence no need to get formal approval from local regulatory authorities. Now – I can't even figure out if any of the western investment banks have any African country team.
Anytime they need to do a deal, they fly expensive teams from London, New York and increasingly, Dubai, if they have recently established a presence there; and most of these teams won't stay a long time in these "hardship locations". Banks from the new boy on the block, China, has dedicated country teams in over 20 African countries. That is very impressive!
I may do a day trip to the port city of Massawa tomorrow. Will be in Asmara until Wednesday when I fly back to Djibouti.

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