Case - Doing Business in Eritrea

question 74

Multiple Choice

Case - Doing Business in Eritrea
Eritrea is in Eastern Africa. Its size is slightly bigger than the state of Pennsylvania. Eritrea currently hosts a UN peacekeeping operation that is monitoring a 25 km-wide Temporary Security Zone on the border with Ethiopia. An international commission, organized to resolve the border dispute, posted its findings in 2002 but final demarcation is on hold due to Ethiopian objections. Since gaining its independence from Ethiopia on 24 May 1993, Eritrea has faced the economic problems of a small, desperately poor country. Like the economies of many African nations, the economy is largely based on subsistence agriculture, with 80 percent of the population involved in farming and herding. In 2004, it took 13.788 nakfa (the Eritrean currency) to get one U.S. dollar, and its per capita income was equal to 900 U.S. dollars. It has a total of 306 kilometers of railroad, 874 kilometers of paved roads, and four airports with paved runways. Its people speak a variety of languages including Afar, Arabic, Tigre and Kunama, Tigrinya, and other Cushitic languages. The Eritrean society is generous with whatever resources it has and its people place a high value on helping others.
-Refer to the scenario above.Having such limited roads and railways indicates Eritrea has:

• A) a geocentric orientation
• B) a high power distance sensibility
• C) transportation pluralism
• D) an inadequate infrastructure
• E) a growth stabilization strategy

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Definitions:

Futures Option Contracts

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Currency Swap

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