Eritrea is becoming a "giant prison" due to its government's policies of mass detention, torture and prolonged military conscription, according to a report published today .

Human Rights Watch (HRW) said state repression had made the tiny Red Sea state one of the highest producers of refugees in the world, with those fleeing risking death or collective punishment against their families.

There is no freedom of speech, worship or movement in Eritrea, while many adults are forced into national service at token wages until up to 55 years of age.

In its 95-page report cataloguing violations against civilians, the New York-based organisation also criticised a €122m (£107m) assistance package from the EU to President Isaias Afewerki's regime, citing concerns that development projects are carried out by prisoners or conscripts, in violation of international law.

Georgette Gagnon, Africa director at HRW, said: "Eritrea's government is turning the country into a giant prison. [It] should immediately account for hundreds of 'disappeared' prisoners and open its jails to independent scrutiny."

Eritrea won independence from Ethiopia in 1993 after a bloody 30-year conflict. The countries fought again five years later over a still unresolved border dispute, and Afewerki, whose party led the independence struggle, has kept Eritrea on a permanent war footing ever since.

All secondary school students complete their final year in a military camp. The mandatory 18-month national service was extended in 2003 so that adult males and females must be available to work for the state until the age of 40. In practice, people are required to serve the government if needed until 55, Human Rights Watch said.

Many of the conscripts are sent to the army, while others work in ministries, on agricultural or construction projects, or in companies owned by the military or political elite.

Though the independence struggle infused a strong sense of patriotism and sacrifice among Eritreans, the extended national service is unpopular, particularly because the wages are barely enough for a family to survive on.

Aware of the widespread discontent, the government has made exit visas difficult to obtain for anyone under 50. Thousands of young people who try to flee through Ethiopia or Sudan risk being shot at the border, while their parents will usually suffer if they get away.

An officer formerly responsible for pursuing deserters told Human Rights Watch: "If you disappear inside Eritrea then the family is put in prison for some time and often then the child will return. If you cross the border then [your family] pays 50,000 nafka (£2,210). If there's no money then it can be a long time in prison."

The extended conscription has coincided with an almost complete suspension of democratic rights. In September 2001, 11 senior government officials who called for free and fair elections were detained.

Dozens of political opponents and journalists were also arrested, with most independent media organisations shut. The location and condition of all those detained remains unknown.

There has also been a purge of religious groups, with thousands of Christians, mostly from small evangelical groups, kept in prison. Conditions are known to be harsh.

Shipping containers in the desert serve as jails, while other secret detention centres are located underground.

Guards use torture techniques such as "the helicopter", where a prisoner's hands and feet are tied behind the back, with the victim left face down, often in the hot sun, the report says.

Eritrea has also become increasingly isolated diplomatically. While independent observers say Eritrea has reason to feel anger over Ethiopia's refusal to accept the decision of an international border commission after the war – and the west's reluctance to pressure Ethiopia into doing so – the government's provocative policies have quickly eroded the goodwill it enjoyed at independence.

In the past year it has antagonised neighbouring Djibouti over a separate border dispute, and openly hosted militant Islamist leaders from Somalia.

"Eritrea's human rights crisis is worsening and making the Horn of Africa ever more volatile," said Gagnon.

"The US, European and other governments need to co-ordinate their policies on the Horn to defuse regional tensions, and make human rights progress an essential benchmark for engagement with Eritrea."

Factbox

A former Italian colony, Eritrea won independence from Ethiopia after a 30-year war in 1993. It is a single party state, ruled by the People's Front for Democracy and Justice. National elections have never been held.

The country's population is estimated at 5 million but it has one of Africa's largest armies, more than 200,000 strong.

President Isaias Afewerki, 63, initially hailed as one of the continent's more progressive leaders, is widely regarded as one of its worst due to his repressive policies.

Up to 10,000 people are in jail without charge or trial, excluding army deserters, who might number in the tens of thousands, according to Human Rights Watch.