American Club Lecture - July

"Why Free Zones?" at the July 26th American Club

"Why Free Zones?" was the topic at the July 26th American Club meeting. With over 100 people in the audience, Dr. Araia Tseggai, Chief Executive Officer of Eriteran Free Zone Authority, discussed the establishment of Free Zones within Eritrea and the possible benefits for the Eritrean people. Free Zones are specially designated areas in which the customary regulations of commerce are suspended in order to attract foreign business activity. If all goes according to plan, businesses operating within the Free Zone will have collateral effects leading to growth for the rest of the Eritrean economy.

Dr. Araia Tseggai stated that the primary purpose of establishing Free Zones is to generate hard currency for the Eritrean government. Hard currency is necessary for purchasing products abroad. The current state of the Eritrean economy does not attract hard currency. This causes the Eritrean government to make choices among competing demands for foreign products, including medicine, fuel, and food. Eritrea’s first Free Zone will be in Massawa. Dr. Araia noted that business activity within the Massawa Free Zone will begin sometime in the next two or three months. At least two businesses are ready to begin operations, and about twelve others are waiting to be invited as soon as necessary infrastructure projects are completed.

The American Club event lasted for over two hours and particiants engaged Dr. Ariaia in a very lively question and answer session that expresses the hopes and concerns of the Eritrean people about Free Zones. The questions concentrated on the composition of the Free Zone’s labor force and the legal protections of the workers, but also included questions about environmental protection and how the concept of Free Zones can work in an economy with extensive restrictions on commerce.

The American Club's next event, on Thursday, August 30, will feature Professor Abebbe on the topic "Women who Migrate, Men who Wait."