From ‘remittance’ to ‘tax’: the shifting meanings and strategies of capture of the Eritrean transnational party-state

Abstract

For decades, mass out migration has remained a defining characteristic of Eritrea. The country's first major refugee crisis occurred in the early 1980s, in the midst of its liberation movement. Upon gaining resettlement in the industrialized world, Eritreans overwhelming continued their support of the liberation war, both financially and politically. Since independence, the ruling government adopted strong measures to ensure the diaspora's continued political and economic engagement. We examine the Eritrean party-state's changing relationship with members of its dispersed population focusing on the evolution of an expatriate tax (2 percent Income Tax on Eritreans Working Abroad) levied on all emigrant Eritreans. Building on work that argues for recognizing the social and political dimensions of money sent ‘home’, this paper makes two contributions. First, we use an historical perspective to show how contextual changes can significantly shift the meanings of remittances, in this case from a voluntary patriotic remittance sent to the liberating government, to a coerced tax. Second, we bring the remittance-tax into the literature on remittances and development, expanding the types of income transfers under consideration. Attention is drawn to the party-state's articulation of the 2 percent Tax policy as a national development imperative and the various transnational governance mechanisms employed to coerce compliance. Citizenship serves as a lens for examining the state's instrumentalization and politicization of the diaspora's engagement with the Eritrean nation.

Keywords:

• remittances
• expatriate 2 percent Tax
• governance
• citizenship
• Eritrea

Notes

1. Remittances may flow in other or multiple directions, particularly during times of economic instability (Cf. Besserer 2002).

2. The government possesses de facto control of the national economy (Styan 2007). All banks in Eritrea are government owned. In addition, bank rates are less than half the black market rates, thus further complicating any understanding of data pertaining to the national economy.

3. Our focus here is on migration to industrialized countries leading to the formation of the diaspora in the West and thus the periodization is from the 1980s.

4. The policy's name as stated in governmental documents written in Tigrinya, one of Eritrea's official languages, is Mehway Gibri, loosely translated to ‘healing taxes’ in English. Given the politicized context, the weighty choice of words has affective value for Eritrean nationals and proves instrumental to garnering financial contributions.

5. One of the first notable instances of opposition was on 20 May 1993, when a group of EPLF fighters staged a protest in Asmara, seizing control of various government offices and the airport, after hearing of the government's unilateral decision to prolong their unpaid service for another 2 years.

6. In 2000, it was estimated that Eritreans remitted roughly 250–350 million US$ (Nelson 2000 in Bernal 2004, 19), while Eritrea's GDP was 650 million US$ (World Bank 1999 in Bernal 2004, 19).

7. Styan (2007) provides a hypothetical equation to guestimate the figures drawn into the state through the 2 percent Tax. He puts forth if 10,000 Eritreans living abroad earned $50,000 (USA) each their combined total income would be $500,000,000. 2 percent of this total would be $10 million (USA).

8. Of the seven, Iyob (1997) describes, the most relevant to this discussion are the following (1) state ownership of all land, (2) supporting families of deceased veterans and impoverished citizens, and (3) introduction of the National Service Programme containing 6 months of military training and 12 months of national productive activities.

9. As an Eritrean travelling to Eritrea, one is expected to enter using their National ID card as opposed to a foreign passport alone. The lack of possession of an ID card is many times suspiciously interpreted as anti-nationalism.

10. The first national-level election since independence was scheduled for 2001 to be held in Eritrea. It was postponed and to date has not been held.

11. Since 1991, Eritrea has either engaged in or nearly gone to war with all its neighbouring countries (Somalia, Ethiopia, Yemen, Djibouti, and Sudan). Labelling Eritrea a ‘siege state’, The International Crisis Group (2010) says Eritrea uses ‘war as its foreign policy’.

12. Woyane is the popularized name for the current Ethiopian government formerly the Tigray People's Liberation Front bearing great historical, political, and social connotations. It can be argued the names for wartime fundraising campaigns are adopted with the political intention of exploiting upon historical memories of betrayal and Ethiopian repression to ignite emotionally, nationalistic reactions among Eritreans in hopes of boosting financial contributions.

13. The party-state has been able to exploit compliance with the 2 percent Tax by entrenching it within transnational family relations. For example, as specific land lotteries are allocated for members of the diaspora, one cannot obtain the land without receiving state clearance, essentially the payment of the 2 percent Tax. Further, land in one's father's place of origin is a source of pride and social status. Thus, there is great family pressure to adhere to the 2 percent Tax for the additional benefits it awards. Another example is the fees levied on remaining family members of deserters and/or defector exiles. The large sum of money, sometimes up to $3500 USD levied indicates the assumption that remittances from family members abroad will cover the cost.

14. ‘Ottawa forces Eritrea to nix “2% extortion tax” on citizens in Canada’ National Post. Available from: http://news.nationalpost.com/2012/09/20/ottawa-forces-eritrea-to-nix-2-extortion-tax-on-citizens-in-canada/ [Accessed 20 September 2012]. ‘“It is out right”: Eritrea vows to continue taxing citizens in Canada despite warning from Ottawa’. National Post. Available from: http://news.nationalpost.com/2012/09/21/it-is-our-right-eritrea-vows-to-continue-taxing-citizens-in-canada-despite-warning-from-ottawa/ [Accessed 21 September 2012].