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ERITREA TO FREE ITS TRADE ZONE IN 2006 DESPITE TENSION December 30, 2005
Apunyu Bonny
(SomaliNet) Eritrea has indicated plans to open its first free trade zone in 2006 expecting to concentrate on its Red sea location to spur growth and broaden its economy, a trade official said Thursday.
Massawa, the planned free port is expected to offer tax exemptions and potential access to markets in huge neighbours Sudan and Ethiopia. The initiative will however largely depend on whether Eritrea and its neighbours Sudan and Ethiopia can re-open trade relations which has been closed for years and tap into healthy growth in boith nations despite political tension.
Strong warnings from analysts indicate a possible renewal of conflict between Eritrea and Ethiopia over border stalemate lingering from a deal to end a 1998-200 war that killed nearly 70,000 civilians.
Earlier this December, Sudanese officials said they would discuss re-opening the border closed after Khartoum accused Eritrea of backing eastern rebels.
" operations will start step by step , hopefully in the first half of 2006", Araia Tseggai, the chief executive officer of the Eritrea Free Zone Authority said.
Tseggai defended that nearby free trade areas in Djibouti and Aden in Yemen would pose competition but said that Eritrea's location was its best advantage.
Eritrea stands to gain much if it can agree to trade with Ethiopia.