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Viewing cable 08ASMARA366, ASMARA,S UNFAIR EGYPTIAN TRADE FAIR

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Reference ID Created Released Classification Origin
08ASMARA366 2008-07-22 12:04 2011-08-30 01:44 CONFIDENTIAL Embassy Asmara
VZCZCXYZ0006
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) 
 
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