By: Liban Obsiye
Somalia is one of the economically poorest yet resource wealthy nations in the world. That Somalia is officially on the UN’s list of Least Developed Countries, and at the bottom of it too, is a true tragedy which can be attributed to the painful and destructive civil war and lack of industrial and economic leadership owing to the central Government’s sole focus on peace, security and the State formation process.
Somali politics is complex and sometimes difficult to understand for many. The question always is, “Why don’t they just get along?” While the question might be imperative how Somalis get along in this age of fragility and ongoing state building after a difficult near quarter century civil war is not easy to agree on.
Despite the fact that the state formation process is ongoing and led by President Hassan Sheikh Mohamud and Regional leaders in the Leaders Forum established early last year, the economic integration to secure any future agreement have received limited or no attention at all.
In post conflict society’s, history shows that there is competition for resources, opportunity and investment. Different regions and their constituents often fight to have what their counterparts have in other parts of the country in order to progress and this often reverses development gains by returning developing states to a state of conflict.
Somalia is one of the economically poorest yet resource wealthy nations in the world. That Somalia is officially on the UN’s list of Least Developed Countries, and at the bottom of it too, is a true tragedy which can be attributed to the painful and destructive civil war and lack of industrial and economic leadership owing to the central Government’s sole focus on peace, security and the State formation process. While these are the building blocks for the Somali state, it is how the nation shares its wealth among its people and regions that will sustain the peace and advance wealth creation going forward.
Regional Economic Development (RED) is important and possible in Somalia given that most of the resources are spread across the regions. The abundance of agricultural land, fisheries because of the longest coast in Africa and the possibilities of renewable energy from solar and wind available almost everywhere can enhance regional development and connectivity. RED will also drive the current region’s focus away from simple politicking and further bloating the public sector by encouraging entrepreneurship, improving the human resources and encouraging industry-university partnerships to create new innovations that can spur further economic growth.
“The Central Government must work closely with the Regional administrations to undertake national resource mapping, agree on a policy of fiscal devolution, create industrial zones based on economic viability and strength as well as encourage competition of innovation and good corporate governance between regional administrations.
In order to make RED work, the Central Government must work closely with the Regional administrations to undertake national resource mapping, agree on a policy of fiscal devolution, create industrial zones based on economic viability and strength as well as encourage competition of innovation and good corporate governance between regional administrations. Besides these, RED requires proper infrastructure and energy policy implementation. These two enablers are fundamental to connect regions, opportunities and to promote investment that would likely be concentrated in the capital.
It is a welcome sign that the Somali Government has prioritised both Energy and infrastructure in terms of investment and is seeking international investors to assist under a Public Private Partnership model. However, if a RED strategy could be agreed between the Central government and the regional States, investment finance in energy and infrastructure could be secured much more easily given the possible opportunities available.
The Somali investment law provides incentives for entrepreneurs who assist the Government to achieve its economic policy goals. Strengthening of the RED model through dispersed opportunities will encourage regional leaders to work closely with both the central government and investors in their regions to capitalise on all available opportunities.
RED does not always mean competition between regional administrations for investment. After a thorough process of resource mapping, the governments can create priority economic zones and direct investment to the most relevant and economically viable regional states in Somalia. Those States with limited resources can be transformed into commercial hubs for professional services like legal, finance and education.
To also bear in mind is that RED does that mean that each regional member state can form its own policies on tax, employment law, finance law and company law. In order to streamline investment, these laws must first compliment the national investment law and be determined at the national level by the relevant Ministries and agreed by Parliament. In a post conflict country where investors already are uneasy, we cannot have any more procedural or policy uncertainties.
RED in some unorganised form existed under the last government of Somalia led by Siad Barre. However, this time round it must be an agreed, coherent and implementable blueprint for Somalia’s sustainable development. To ensure this, responsibility, ownership and leadership must be demonstrated by both the central government of Somalia and the regional states.
The writer is the Senior Advisor to the Minister for Foreign Affairs and Investment Promotion, Federal Republic of Somalia.