Business is booming.

Eritrea as a political entity

Federation with Ethiopia (1952-1962)

As soon as Eritrea federated with Ethiopia in 1952, everything went worse. Ethiopia deliberately deteriorated the Eritrean economy. As part of its economic policy the Ethiopian government hampered foreign investors under a threat of expulsion from engaging in business activities in Eritrea. For example, it rejected the agreement between the Eritrean government and Italian company FIAT to set up an automotive assembly factory to be established in Dekemhare and the electric company, SADAW, to build hydro-electric power involving cotton plantation around Tesenei and the setting up of textile factory in 1954-1955. Many factories in Asmara such as textile, tannery, and earth ware factories were either shut or reallocated in Ethiopia. The Ethiopian government deliberately did all these to prove the non viability of Eritrea as an independent country and to have access to the Eritrean skilled labor. As a result of this policy, the Eritrean working class has been disbanded leading to massive exodus into Ethiopia, the Sudan and the Middle East.

This economic revitalization has been followed by efforts to depoliticize the Eritrean society. The government began to oppress trade unions, political parties and the press. Eventually all political parties, except pro-Ethiopia unionists, were banned. Important party personages were arrested. In 1956 Tigrigna and Arabic languages were officially banned as official languages of Eritrea. They were replaced by Amharic as the only official language. In December 1958, the Eritrean flag was lowered. In September 1959, Eritrean laws were replaced by the Ethiopian penal code.

In May 1960 Eritrea became one of the provinces of Ethiopia against the will of the Eritrean people. Then the Eritrean armed struggle for independence began on September 1, 1961. The war for independence took about 30 years until finally the Ethiopian colonial army was badly humiliated and defeated and driven out from the whole country on 24 May 1991. Eritrea became free to officially declare it independence on 24 May 2993 after the Eritrean people held referendum. 99.8% of the votes were in favor of independence.

Source: New World History Outline
