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A woman looks for clams on a beach in Eritrea. Photo: Eric Lafforgue/Gamma-Rapho via Getty Images

Eritrea is in dire need of economic development, but it has isolated itself from regional neighbors and the international community and doesn't trust or accept any foreign aid.

The bottom line: Without aid, Eritrea has to find other ways to make money, and one big asset is its coastline. The strip of land — just 200 miles from the Arabian peninsula where deadly conflicts between Gulf nations are playing out — is available to the highest Arab bidder.

Decades of mistrust

The backdrop: Eritrea's fight for independence, in which the small nation overcame Ethiopian forces backed by the West, shaped the worldview of Isaias Afwerki, the country's dictator since its founding in 1991.

"This perception that Eritrea must go at it alone in confronting a fickle, and often hostile, international community, continues to define Afwerki’s mindset," a senior Western diplomat, who served as ambassador in Eritrea in the early 2000s, tells Axios.

  • Afwerki is deeply suspicious of Western intentions and aid and cuts his country off from the globe, the ambassador says.
  • The repressive government has blocked development and pushed scores of its citizens to flee to other African nations, Europe and the U.S., says Meressa Kahsu Dessu, a regional expert at the Institute for Security Studies in Addis Ababa.
The bidders
  • The Saudi-led coalition waging war in Yemen "now uses a base in the Eritrean port of Assab, close to Djibouti, as a key spot from which to attack Houthi positions in Yemen," reports the Economist.
  • The league of Arab allies including Saudi Arabia, the United Arab Emirates, Egypt and Bahrain — sanctioning Qatar for alleged funding of regional terrorists have also won Eritrea's support.
    • That support has had its consequences. Eritrea is engaged in a territorial dispute along its border with Djibouti, but things quieted down when both parties agreed to let Qatar send troops to the region and serve as a peacekeeper and mediator. After Eritrea pledged support to the allies against Qatar, the Arab nation pulled its troops, sending the region into chaos once again, Dessu says.
Where things stand

Eritrea's neighbors have tried to get along. One semi-successful effort was the creation of the Intergovernmental Authority on Development (IGAD), a trade organization which includes Eritrea, Ethiopia, Djibouti, Uganda, Kenya, Somalia and Sudan.

  • Yes, but: Eritrea's membership in IGAD has been inconsistent. In 2007, it pulled out of the bloc for four years to protest Ethiopia's decision to send troops to fight al Shabaab in Somalia. Ethiopia remains Eritrea's biggest enemy, and it opposes nearly everything Addis Ababa supports.
  • "There's not an active conflict [between Ethiopia and Eritrea], but we call it 'no peace, no war," Dessu says.

Go deeper

Updated 1 hour ago - Economy & Business

Tax season nightmare ahead for understaffed IRS

Illustration: Shoshana Gordon/Axios

The IRS will start accepting 2021 tax returns in less than a week, and the filing delays and administrative headaches to come might eclipse last year — which was “one of the worst filing seasons," according to an independent advocacy agency within the IRS.

Why it matters: For taxpayers, especially with complex or paper filings, this means headaches, delayed refunds, and mistakes.

China builds its own movie empire

Expand chart
Data: Gower Street citing Comscore; Chart: Kavya Beheraj/Axios

China blocked all four of Disney's Marvel movies from being released in its theaters last year, a grim sign for U.S. film giants being squeezed out of the world's fastest-growing box office.

Why it matters: The Chinese Communist Party is using domestic films as a key conduit for mass messaging aimed at achieving political goals, leaving little room for foreign views.

Why 401(k) rollovers are so annoying

Illustration: Aïda Amer/Axios

If you happened to change jobs recently, you may have tried to transfer your retirement account from your former employer into an Individual Retirement Account or your new employer's 401(k) plan. If so, you probably encountered a bureaucratic gantlet — and you're not alone.

Why it matters: Kludgey processes around retirement account transfers result in people losing track of their funds, giving up important tax advantages, or otherwise disadvantaging themselves and being less prepared for retirement.