bstantially augmented by
worker remittances from abroad. Government revenues come from custom
duties and taxes on income and sales. Road construction is a top
domestic priority. In the long term, Eritrea may benefit from the
development of offshore oil, offshore fishing, and tourism. Eritrea's
economic future depends on its ability to master fundamental social
and economic problems, e.g., by reducing illiteracy, promoting job
creation, expanding technical training, attracting foreign investment,
and streamlining the bureaucracy. The most immediate threat to the
economy, however, is the possible expansion of the border conflict
with Ethiopia, which broke out in May 1998. The hostilities have
drained away substantial resources vital to Eritrea's economic
development.

GDP: purchasing power parity - $2.9 billion (1999 est.)

GDP - real growth rate: 3% (1999 est.)

GDP - per capita: purchasing power parity - $750 (1999 est.)

GDP - composition by sector:
agriculture: 18%
industry: 20%
services: 62% (1995 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 9% (1998 est.)

Labor force: NA

Labor force - by occupation: agriculture 80%, industry and commerce
20%

Unemployment rate: NA%

Budget:
revenues: $283.9 million
expenditures: $351.6 million, including capital expenditures of $NA
(1997 est.)

Industries: food processing, beverages, clothing and textiles

Industrial production growth rate: NA%

Electricity - production: 177.6 million kWh (1997 est.)

Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1997 est.)

Electricity - consumption: 177.6 million kWh (1997 est.)

Electricity - exports: 0 kWh (1997)

Electricity - imports: 0 kWh (1997)

Agriculture - products: sorghum, lentils, vegetables, corn, cotton,
tobacco, coffee, sisal; livestock, goats; fish

Exports: $52.9 million (f.o.b., 1997)

Exports - commodities: livestock, sorghum, textiles, food, small
manufactures

Exports - partners: Ethiopia 64%, Sudan 17%, Italy 5%, Saudi Arabia
2%, US, Yemen (1997)

Imports: $489.4 million (c.i.f., 1997)

Imports - commodities: processed goods, machinery, petroleum products

Imports - partners: Saudi Arabia 16%, Italy 14%, UAE 13%, Ethiopia 9%,
Germany 6% (1997)

Debt - external: $76 million (1997 est.)

Economic aid - recipient: $123.1 mi