Identifier
Created
Classification
Origin
08ASMARA366
2008-07-22 12:04:00
CONFIDENTIAL
Embassy Asmara
Cable title:
ASMARA,S UNFAIR EGYPTIAN TRADE FAIR
how-toVZCZCXYZ0006 RR RUEHWEB DE RUEHAE #0366/01 2041204 ZNY CCCCC ZZH R 221204Z JUL 08 FM AMEMBASSY ASMARA TO RUEKJCS/SECDEF WASHDC INFO RUCNIAD/IGAD COLLECTIVE RUEHEG/AMEMBASSY CAIRO 0452 RUEKDIA/DIA WASHDC RUEAIIA/CIA WASHDC RHEHNSC/NSC WASHDC RUEKJCS/SECDEF WASHDC RHMFISS/CDR USCENTCOM MACDILL AFB FL RUMICEA/JICCENT MACDILL AFB FL RUEPADJ/CJTF-HOA J2X CAMP LEMONIER DJ RHMFISS/HQ USAFRICOM STUTTGART GE RHRMDAB/COMUSNAVCENT
C O N F I D E N T I A L SECTION 01 OF 02 ASMARA 000366
SIPDIS
DEPARTMENT FOR AF/E
LONDON AND PARIS FOR AFRICA WATCHERS
E.O. 12958: DECL: 07/21/2018
TAGS: ERTD PREL PGOV EG ER
SUBJECT: ASMARA,S UNFAIR EGYPTIAN TRADE FAIR
ASMARA 00000366 001.2 OF 002
Classified By: Ambassador Ronald K McMullen for reason 1.4 (d)
C O N F I D E N T I A L SECTION 01 OF 02 ASMARA 000366
SIPDIS
DEPARTMENT FOR AF/E
LONDON AND PARIS FOR AFRICA WATCHERS
E.O. 12958: DECL: 07/21/2018
TAGS: ERTD PREL PGOV EG ER
SUBJECT: ASMARA,S UNFAIR EGYPTIAN TRADE FAIR
ASMARA 00000366 001.2 OF 002
Classified By: Ambassador Ronald K McMullen for reason 1.4 (d)
1. (C) SUMMARY: An Egyptian trade fair in Asmara concluded
July 18, after a week-long shopping frenzy generated by
Eritreans restricted by their tyrannical government from
traveling abroad or buying almost anything in Eritrea. The
regime extracted a high price from Egypt for agreeing to
allow the trade fair. The ruling party "took" 22 of 42
containers of Egyptian products, saying only that it would
discuss price and payment terms at a later date. END SUMMARY.
2. (C) PARTY TRUMPS GOVERNMENT
--------------
Despite three previous Egyptian trade fairs in Eritrea, the
Government of the State of Eritrea (GSE) flip-flopped several
times after initially agreeing to allow the trade fair to
proceed. Egyptian vendors, with the aid of the Egyptian
embassy in Asmara, shipped 42 containers of building
materials and consumer goods to Massawa after getting the
initial GSE green light, which then changed to amber and then
to red. As the containers languished in the Port of Massawa
for months, Port Authorities levied demurrage charges,
threatening to open the containers and auction the goods by
July 20 if the fees were not paid. In desperation, the
Egyptian ambassador went to Hagos Ghebrehiwet, the ruling
party's economic guru, to try to secure the containers'
release. Hagos overruled the Minister of Trade and Industry
and the trade fair went on, although not quite as planned.
3. (C) THE PARTY SEIZES MOST OF THE CONTAINERS
-------------- -
The Egyptian ambassador to Eritrea, when congratulated by the
ambassador for persuading the regime to allow the trade fair
to go on, revealed the steep price extracted by Hagos. All
containers with cement, plumbing and electrical fixtures, and
all tiles and building materials were "taken" by the party
(which runs all of Eritrea's legal construction companies).
Hagos reportedly tendered a vague promise to pay for the
materials at a later date, but price and terms of payment
were not specified. Worryingly for the Egyptians, other
Eritrean authorities ordered the vendors of consumer
electronics not to sell any items from their booths at the
exhibition, as the authorities wanted to buy everything.
After taking receipt of the electronic items, the Eritrean
authorities paid only half of the price of the goods,
according to the Egyptian DCM.
4. (C) SHOPPERS, BELLY DANCERS, AND VENDORS
--------------
The trade fair opened with a ceremonial flourish, featuring
an Egyptian folkloric troupe complete with whirling dervishes
and (Ukrainian, we suspect) belly dancers. Thousands of
shoppers eager to rush the pavilion were held back by
paramilitary forces armed with AK-47s. For consumers in
Asmara, where even basics such as milk, bread, sugar, and
cooking oil are largely unavailable in local markets, the
chance to purchase a plastic replica of King Tut's head, an
inlaid cane, or a leather jacket, was an opportunity not to
be missed. The Egyptian vendors, at a post-exhibition
farewell dinner hosted by the Egyptian ambassador, were rowdy
and almost giddy (be to leaving Eritrea?). Those that didn't
have their goods taken by the Eritrean authorities reportedly
sold "almost everything."
5. (C) COMMENT: The Egyptian trade fair disaster is ample
warning to any foreign entity considering doing business in
Eritrea - in a country with no rule of law, capricious
authorities are willing and able to make huge demands on the
resources of foreign entrepreneurs. The Russian CDA
mentioned that Russia had also inquired about holding a trade
fair in Eritrea, but was told it wouldn,t be allowed until
"Russia changed its behavior in the UN Security Council."
Post notes that the Eritrean regime took a majority of the
incoming trade fair containers at almost the same time as it
agreed to accept over a thousand refouled refugees from
Egypt. End Comment.
ASMARA 00000366 002.2 OF 002
MCMULLEN
SIPDIS
DEPARTMENT FOR AF/E
LONDON AND PARIS FOR AFRICA WATCHERS
E.O. 12958: DECL: 07/21/2018
TAGS: ERTD PREL PGOV EG ER
SUBJECT: ASMARA,S UNFAIR EGYPTIAN TRADE FAIR
ASMARA 00000366 001.2 OF 002
Classified By: Ambassador Ronald K McMullen for reason 1.4 (d)
1. (C) SUMMARY: An Egyptian trade fair in Asmara concluded
July 18, after a week-long shopping frenzy generated by
Eritreans restricted by their tyrannical government from
traveling abroad or buying almost anything in Eritrea. The
regime extracted a high price from Egypt for agreeing to
allow the trade fair. The ruling party "took" 22 of 42
containers of Egyptian products, saying only that it would
discuss price and payment terms at a later date. END SUMMARY.
2. (C) PARTY TRUMPS GOVERNMENT
--------------
Despite three previous Egyptian trade fairs in Eritrea, the
Government of the State of Eritrea (GSE) flip-flopped several
times after initially agreeing to allow the trade fair to
proceed. Egyptian vendors, with the aid of the Egyptian
embassy in Asmara, shipped 42 containers of building
materials and consumer goods to Massawa after getting the
initial GSE green light, which then changed to amber and then
to red. As the containers languished in the Port of Massawa
for months, Port Authorities levied demurrage charges,
threatening to open the containers and auction the goods by
July 20 if the fees were not paid. In desperation, the
Egyptian ambassador went to Hagos Ghebrehiwet, the ruling
party's economic guru, to try to secure the containers'
release. Hagos overruled the Minister of Trade and Industry
and the trade fair went on, although not quite as planned.
3. (C) THE PARTY SEIZES MOST OF THE CONTAINERS
-------------- -
The Egyptian ambassador to Eritrea, when congratulated by the
ambassador for persuading the regime to allow the trade fair
to go on, revealed the steep price extracted by Hagos. All
containers with cement, plumbing and electrical fixtures, and
all tiles and building materials were "taken" by the party
(which runs all of Eritrea's legal construction companies).
Hagos reportedly tendered a vague promise to pay for the
materials at a later date, but price and terms of payment
were not specified. Worryingly for the Egyptians, other
Eritrean authorities ordered the vendors of consumer
electronics not to sell any items from their booths at the
exhibition, as the authorities wanted to buy everything.
After taking receipt of the electronic items, the Eritrean
authorities paid only half of the price of the goods,
according to the Egyptian DCM.
4. (C) SHOPPERS, BELLY DANCERS, AND VENDORS
--------------
The trade fair opened with a ceremonial flourish, featuring
an Egyptian folkloric troupe complete with whirling dervishes
and (Ukrainian, we suspect) belly dancers. Thousands of
shoppers eager to rush the pavilion were held back by
paramilitary forces armed with AK-47s. For consumers in
Asmara, where even basics such as milk, bread, sugar, and
cooking oil are largely unavailable in local markets, the
chance to purchase a plastic replica of King Tut's head, an
inlaid cane, or a leather jacket, was an opportunity not to
be missed. The Egyptian vendors, at a post-exhibition
farewell dinner hosted by the Egyptian ambassador, were rowdy
and almost giddy (be to leaving Eritrea?). Those that didn't
have their goods taken by the Eritrean authorities reportedly
sold "almost everything."
5. (C) COMMENT: The Egyptian trade fair disaster is ample
warning to any foreign entity considering doing business in
Eritrea - in a country with no rule of law, capricious
authorities are willing and able to make huge demands on the
resources of foreign entrepreneurs. The Russian CDA
mentioned that Russia had also inquired about holding a trade
fair in Eritrea, but was told it wouldn,t be allowed until
"Russia changed its behavior in the UN Security Council."
Post notes that the Eritrean regime took a majority of the
incoming trade fair containers at almost the same time as it
agreed to accept over a thousand refouled refugees from
Egypt. End Comment.
ASMARA 00000366 002.2 OF 002
MCMULLEN