This is not a failed state – entrepreneurs say

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By: Martin Rivers

The backlash against The Economist in September was a heartfelt and spontaneous response to what many considered an unfair portrayal of the country’s struggles and successes. To the extent that foreign journalists shape global understanding of the Somali situation, the newspaper deserves criticism.

The Economist provoked an angry backlash in September, when it published an article about Somalia entitled “Most-failed state” that bemoaned “twenty-five years of chaos” in the Horn of Africa nation. Many Somalis accused the newspaper of peddling a nihilistic and stereotypical view of the war-torn but recovering country. Some vented their anger through the Twitter hashtag #CorrectingTheEconomist, mounting a counter-narrative that highlighted signs of progress in the country since 2012.

Although the controversial article was broadly factually accurate, its negative tone touched a nerve with Somalis who have worked tirelessly to lift their homeland from the abyss of lawlessness. By omitting any mention of the country’s slow but steady developmental reforms, The Economist reinforced a widely held perception that Somalia is a lost cause.

“It is easy in the western world, when you are looking in from the outside to think that we are mad people and there are no rules and regulations,” said Hashim Duale, member of the Somali Chamber of Commerce, in an interview on the day the article was published. “Taxation laws, inheritance laws, commercial laws … If we are coming from a quarter century of civil war, putting in place all those laws takes time.”

Mahamud Abdi Ali Gabeire, the Chamber’s President agrees that the economy has made clear strides since the days of the Islamic Courts Union. Although Somalia lacks public bodies to collect and validate economic data, he estimates that Gross Domestic Product is growing at a rate of about 2 per cent annually.

Agricultural exports such as livestock, lemon and sesame seeds have traditionally been a source of hard currency for Somalia, which has one of the world’s highest trade deficits due to its heavy reliance on imports. Although money transfers now dwarf the role of these sectors – the diaspora repatriates an estimated $1.6 billion each year, versus income of about $40 million from lemon exporters – Gabeire believes the demand is out there. He cites the potential of banana exports once the supply chain reaches international standards, as well as untapped foreign markets for sheep and goats.

“We are trying to develop other markets for livestock,” the president affirms, describing Arab countries – particularly Saudi Arabia and Oman – as the only existing buyers. “Somali livestock are natural and organic, which means they’re interesting internationally.”

Fishing offers another path to economic normalisation and wealth creation. With piracy of the coast of Somalia now at its lowest levels in years, fishermen are beginning to exploit the longest coastline in Africa for its rich tuna, lobster and swordfish pickings. A lack of training and proper equipment has to date slowed the sector’s growth, but Gabeire says activity could be scaled up rapidly with outside assistance. “The fishing industry is the one sector which you can invest in immediately and the hard currency can come very quickly,” he says. “There is already some infrastructure and the security issues aren’t existing there.”

Less familiar sectors such as insurance are also now gaining traction as investors place bets on improved stability after this year’s Presidential elections. “But what we need most in this country is energy development. If not there will be stagnation after five years,” Gabeire warns. “Solar energy and wind energy are the major interesting things for Somalia. The resources are there. The technology is in the market. All that is needed is for the people to understand they can make money.”

In lieu of major renewable energy projects, fossil fuels could provide an immediate fillip to government coffers. BP, Exxon and Shell are reportedly negotiating a return to the country for the first time since civil war broke out in 1991. Although a maritime boundary dispute with Kenya threatens some Indian Ocean reserves, optimism is growing about Somalia’s potential as a future gas and oil exporter.

Last year’s opening of the Somali Fuel Company Terminal – a $20 million petroleum storage facility that complies with international safety stands – underscores the country’s commitment to energy independence. The ocean-front facility has a storage capacity of 40,000 cubic metres and serves 50 tankers per day.

Without mentioning any of the above industries, The Economist singled out hospitality as one sector experiencing growth in Somalia today. “This is not thanks to tourists,” it emphasised. “Only the most daring or idiotic would take a holiday in Somalia”. But that is not a viewpoint shared by Justus Kisaulu, general manager of Jazeera Hotel, which bills itself as the only five-star hotel in Mogadishu and rivals the safe-haven status of even Aden Adde International Airport.

“Last year and this year we have witnessed a number of tourists visiting Mogadishu, staying one or two nights, and going back to their countries. I’m talking about western tourists. I have hosted them,” he insists, highlighting recent stays by Americans and Hungarians with Caucasian roots. “They have gone to the beaches. They have gone to historical sites. The number is not very high, but it is there. There are travel agencies in Europe who encourage people to take the challenge and visit Mogadishu.”

While the cost of arranging secure transportation for western visitors is high, members of the diaspora find it easier to blend in with their surroundings and visit the homeland for an affordable vacation. Jazeera is among the companies now considering setting up a leisure hotel on Lido beach to cater for demand. “We can claim already that this is a holiday country,” says Gabeire. “Every year 10,000 people (in the diaspora) come back.”

The scale of Somalia’s reconstruction meanwhile guarantees a steady stream of foreign diplomats, businessmen and aid workers – all of whom require a safe passage if they are to do their work effectively and assist with the country’s recovery. Kisaulu estimates that 10 new hotels have opened over the past four years.

“Last year and this year we have witnessed a number of tourists visiting Mogadishu, staying one or two nights, and going back to their countries … I’m talking about western tourists. I have hosted them. They have gone to the beaches. They have gone to historical sites. The number is not very high, but it is there.” Justus Kisaulu, General Manager of Jazeera Hotel.

Unfortunately, the success of Mogadishu’s hospitality sector has not escaped the attention of Al Shabaab. Recent months have seen high-profile attacks on three establishments: The Ambassador Hotel, Nasa Hablod Hotel, and The Somali Youth League (SYL) Hotel. Admitting that his own establishment is in the terrorist’s crosshairs, Kisaulu shrugs: “Jazeera is targeted because it’s an icon of positive change. Each and every person staying in the hotel can change something positively (in Somalia) in one way or the other.”

The solution favoured by most businesses is heavy investment in private security. Jazeera, for example, uses HESCO bastions in surrounding roads; a watchtower on its perimeter wall; several layers of screening for guests and employees; dozens of armed guards; and reinforced vehicles for outside transportation.

While the security climate demands such extreme measures, they are at best a stopgap solution. Tackling Somalia’s 70% unemployment rate is the more fundamental challenge. Mohamed Abdi, the Chamber’s President for Galmudug State, says the government must start promoting vocational diplomas over university degrees. “In Mogadishu there are more than 63 universities. You know what they teach? None of the skills in demand,” he complains. “They teach business administration. We need carpenters, plumbers, electricians, welders, painters. Our young people in the streets must be convinced that they can do this handy work.”

The backlash against The Economist in September was a heartfelt and spontaneous response to what many considered an unfair portrayal of the country’s struggles and successes. To the extent that foreign journalists shape global understanding of the Somali situation, the newspaper deserves criticism. However, responsibility for changing perceptions and reclaiming the narrative ultimately lies with Somalis themselves.

“Mogadishu is a victim of negative publicity,” Kisaulu concludes. “There is a lot of investment potential in this country – honestly. The only thing is there must be a strategic communication. This country must be packaged again. It must be sold.”

The writer is a visiting Commercial Air Transport writer based in Edinburgh