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* President Isaias dismisses bleak assessment of economy
* Isaias denies reports two in three malnourished
By Jeremy Clarke
ASMARA, Oct 21 (Reuters) - Eritrean President Isaias Afwerki said on Wednesday that Western intelligence agencies and special interest groups were persecuting Eritrea by inventing lies, rumours and defamatory reports.
The Red Sea state, which has faced criticism in recent weeks from international diplomatic and humanitarian organisations, denied any wrongdoing.
"It's been the cause of the all problems we see all over the world ... it's a network of (Western) intelligence agencies that serve special interest groups globally," the long-serving Eritrean leader told Reuters in an interview.
"It is sometimes very perplexing for me. Why all these lies? Why do you have to go and cook such statistics and make statements about the reality in Eritrea when you don't even know what's going on in this country?"
Isaias, a former rebel commander in power since 1991, said he was unmoved by the criticism.
The Food and Agriculture Organisation said in a report last week that Eritrea was dangerously underfed. The U.N. agency said as many as two in every three Eritreans were malnourished, something Isaias denied.
"It's not true, it's all lies. It's a fabrication," he said, adding that humanitarian organisations were motivated by the business opportunities crises and aid offer in other African countries.
"It's money-making for them. It's not solving problems. It's a collaboration of domestically corrupt special interest groups with international mafia that have a big interest in publicising hunger and other crises," the 63-year-old leader said.
A recent International Monetary Fund (IMF) mission to Eritrea said the economy had weakened significantly in the last 12 months due to a severe drought in 2008 and the global crisis but Isaias had no time for such assessments.
"They (the IMF) make judgments on very limited knowledge and the government of Eritrea has been very sceptical all along of comments, judgments, suggestions that come from the IMF. I personally don't take them seriously."
A separate report this week by international advocacy group Reporters Without Borders named Eritrea, in an assessment of its press freedoms, as the worst country in the world for a third year running.
It said that no independent media is tolerated in Eritrea and that 30 journalists were in prison -- as many as in China or Iran but with a much smaller population.
But Asmara bristled at repeated accusations by rights groups that it puts independent journalists and non-Orthodox Christians in jail, tortures detainees, and keeps people indefinitely in military service.
The president insisted all such accusations, and his alleged role in destabilising the region, were malicious fabrications designed to blacken Eritrea's name.
"Why these accusations about Eritrea's role in this region when there is no fact to prove what is being claimed?"
The former Marxist guerrilla leader has ruled one of Africa's smallest economies since its 1993 formal independence from Ethiopia. For supporters, he is a symbol of resistance and self-reliance, but critics say he is an authoritarian whose government brooks no dissent. (Editing by Helen Nyambura-Mwaura)