The Government of the State of Eritrea has defined a macro-economic policy for recovery, reconstruction and development, which emphasises the new role of the Government as a facilitator for private sector development. After years of conflict and war with Ethiopia, during which the economic fabrics of the country were devastated, it is quite apparent that there is a crisis that requires the collective attention of both the Government and the private sector. Such interaction between the two key stakeholders would ensure confidence, create an atmosphere of sharing information and transparency and the emergence of policy decisions that all sides of the economy could live with.

The starting point of this analysis is the macro-economic policies and strategies aimed at transforming the socio-economic landscape of Eritrea by revitalising the productive sectors; increasing production, in particular, export-oriented production; generating employment; eradicating poverty, as well as achieving political and economic stability and sustainable development. Macro-economic policies and stability per se would not ensure sustainable industrial development. Other conditions should be in place for the private sector (expected to be the engine of growth and development) to respond positively to macro-economic stability. The globalisation of economic activities also makes it imperative for the private sector to be competitive.