The Economist

10 Leaders The EconomistAugust 4th 2018

1

(^2) The regime is isolated mysterious paranoid has a history of
stirring up trouble in the region and has always used the threat
of war as a pretext for oppressing its people. National service is
compulsory and indefinite—many Eritreans serve more than
20 years either bearing arms or digging ditches for a pittance.
Those who try to flee the country risk being shot. Many bribe
border guards to look the other way; hence the large number
of Eritreans who have sought asylum in Europe. Isolation or
“self-reliance” as the regime calls it has kept Eritrea wretchedly
poor. Only nine countries score worse on theUN’s human-
development index.
Could things be about to improve? As we report from inside
Eritrea (see Middle East and Africa section)the mood is sud-
denly unsettled. Peace if it sticks would remove the regime’s
main excuse for its atrocious behaviour. If Ethiopia is no longer
a threat why should Eritreans spend decades doing national
service? If Eritrea is no longer on a war footing why does it
need a military strongman to keep it safe? Strange to recall be-
fore it seized power a quarter-century ago the ruling party
promised Eritreans multiparty democracy with all the trim-
mings including freedom of speech and religion.
It would be naive after all this time to expect Mr Isaias sud-
denly to honour that promise. But he could take other steps to
make Eritrea less closed and miserable. Most important he
must not go back to war. Progress is virtually impossible with-
out peace. He should also open up to trade investment and
people. Ethiopia is a landlocked giant. Eritrea can give it access
to the sea. The war and its aftermath stopped Ethiopian im-
ports and exports from flowing through Eritrean ports depriv-
ing both countries of a fortune. Two-thirds of Eritrean exports
used to go to Ethiopia.
And he should abolish all non-military conscription. If the
regime cannot bring itself to get rid of military service too it
should at least impose a time limit. This would remove the sin-
gle biggest grievance causing Eritreans to flee their homeland.
Some of the dynamic diaspora might even return to help re-
build their country. Ending non-military national service
would also remove a huge obstacle to foreign investment. Rep-
utable firms shun Eritrea partly because any venture is likely to
involve local partners who use conscripts—ie forced labour.
Without this worry they might help spruce up Eritrea’s crum-
bling harbours woeful telecoms and barely exploited tourist
potential. Unshackled from semi-slavery Eritreans would be
free to find or create jobs they actually want to do.
Fleeing from slavery across the Red Sea
It is too early to abandon the presumption that Eritrean refu-
gees have a well-founded fear of persecution. Eritrea will not
suddenly become a normal country. But by easing its state-im-
posed seclusion it could become a less poorone. Outsiders
should encourage that. As and when the regime opens up the
West should begin to engage with it. And some day perhaps
Eritreans will start to enjoy the freedoms they were promised
during their tragic revolution. 7

I

N MOST negotiations the

maxim that “no deal is better

than a bad deal” makes perfect

sense. If you are buying a car

you must be ready to walk away

or the seller has you over a bar-

rel. The way to drive a hard bar-

gain is to persuade him that he

mustoffer you a good deal or there will be no deal at all.

Theresa May has made this commonsense principle the

foundation of her talks with Brussels over Britain’s exit from

the European Union. “No deal for Britain is better than a bad

deal for Britain” she said in January last year setting out her

red lines. With less than eight months until Britain is due to

leave the EU and only about four months left to reach an

agreement on the terms of its exit her government is still

stressing its readiness to depart with no deal in place.

The trouble is that Brexit is nothing like buying a car. In most

negotiations “no deal” means sticking to the status quo. If you

are not prepared to pay the asking price you can walk away

none the worse and try somewhere else. The Brexit talks are

different. If no deal is reached Britain will not maintain the sta-

tus quo of itsEUmembership but find its links to the continent

abruptly and acrimoniously broken off. The metaphor is not

buying a car it is buying a parachute—having already leapt out

of the aeroplane. “Walking away” would land Britain in a situ-

ation so calamitous that it should not even be on the table.

A no-deal outcome would be bad for the EU too particular-

ly Ireland whose small open economy is closely linked to Brit-

ain’s. But Britain would be hurt most by a hard landing. Trad-

ing with the EU on the terms of the World Trade Organisation

which would raise both tariffs and regulatory barriers would

reduce Britain’sGDP by 4% within five to ten years according

to the IMF. The EU’sGDP would fall by about 1.5%. Worse still—

again for everyone but chiefly for Britain—would be the tur-

moil from leaving without agreements in place over every-

thing from airline safety to the transfer of radioactive material.

The supply of such essentials as food and medicine could be

disrupted too (see Britain section).

A hard landing

For this reason the EU has never taken seriously Mrs May’s

claim that Britain is ready to walk away from the negotiating ta-

ble. It sees her threat as a bluff—and it is right judging by the

lack of preparation in Britain for a no-deal outcome. Even with

extensive (and expensive) planning leaving the EU without a

deal would have been difficult. As things stand almost no

work has been done to prepare for such an eventuality. Lately

Britain has taken to outlining desperate-sounding plans to

stockpile medicine and set up electricity generators. Chaos

would be hard to avoid.

Yet although the EU’s negotiators in Brussels do not buy it

Mrs May’s slogan that “no deal is better than a bad deal” has

struck a chord with the voting public. As the talks have dragged

Brexit

No ordinary deal

Britain’s dangerous bluff betrays a misunderstanding of its negotiation with Brussels