drought, the robust performance of the economy, and the fulfilment of the financial commitment of development partners in the Monterrey Consensus.

Since 1991, Eritrea had been reconstructing the war-devastated transport and communication services sector, and the legal, social and institutional framework to achieve economic, social, cultural and political development had been established. In line with its policy of bridging the gap between the urban and rural sectors, the Government had invested heavily in rural schools, health systems, water and sanitary facilities, and rural roads. The private sector had invested in the services, construction and resource-based industries. However, the country now faced serious challenges on several fronts, including serious macroeconomic imbalances, annual economic growth of less than 2 per cent, and a skyrocketing government deficit.

Eritrea had faced such challenges becauseit had to defend its borders and ensure its sovereignty against repeated large-scale invasions by Ethiopia for three years -- 1998 to 2000. Perhaps even more damaging than the war itself was Ethiopia’s refusal to abide by the Boundary Commission’s final and binding decision and the international community’s unwillingness, so far, to enforce that decision. Moreover, as in many countries in the continent, Eritrea had experienced serious drought for the past three years, and reduced rainfall for the past five. It was also experiencing the shock of steep increases in the price of oil.

JUMA NGASONGWA, Minister for Industry and Trade of the United Republic of Tanzania, said that, despite its efforts, including the implementation of good governance, human rights and transparent policies, his country remained a least developed