2014-07-22
Today from Hiiraan Online:  _
The Road Ahead: First things First

Hassan Mire
Thursday, October 25, 2012

As the process for ending Somalia's twenty-two years of political instability is relatively close to an end, it is a good time to highlight what the new Prime Minister’s (PM) office ought to give priority to stabilize the country’s security and economics and earn the trust of the governed and the international community. Thus, the PM’s office should prioritize three things that are vital for the first phase of rebuilding: Security, Stabilizing the Shilling, and Easing Commerce.

Security

 Somalia does not have to look far to understand why security is the most important pillar that the next government must give the number one priority. Without dependable and effective security apparatus that enforce law and order in the country, Somalia will not be able to attract any sort of progress; unfortunately, this pillar alone does not secure peace and stability.

To achieve stable security in consideration with the situation the country is now (divided between tribal lines, autonomous States, widespread suspicion…), it is essential to make security a local matter driven by locals: decentralized, bottom-up system. When you make security a local issue and owned by locals, it will keep suspicion and mistrust out of the discourse and will enable locals to determine their issues, and in the process, locals will learn to govern themselves. It would not be the fastest and the smoothest way to provide security for all people, but for sure it will build the most resilient and affective system of security in the long run.

Secondly, the government should create programs that will provide incentives to encourage citizens to return their guns to the States or the Federal government voluntarily. Simultaneously, the federal government should close down arms businesses in the country; policy makers have two options to choose from to meet this goal: offering incentives or using coercion. Pick prudently.   

It is important to note that without monopolizing who can possess a gun and who can authorize its use, achieving security will be unlikely.

 Somalia cannot also afford to ignore the neighboring countries, AMISOM, private security companies,  foreign agents (this could be a problem to Somalia’s sovereignty in the long run), businesses (like “Cirtoogte”), local State governments, and former warlords to continue supplying weapons and provide training … without the oversight of the federal government and the proper authorization of the newly elected parliament.

The Shilling and Inflation

The Somali currency today is one that manipulated by various groups including Xawala businesses, counterfeiters, traders, and States. It has no central authority that regulates the exchange rate, checks inflation and the supply of the currency. These competing actors have left the currency floating and depreciated. Today one hundred US dollars will exchange in Somali markets, approximately, two-million Somali Shillings. This has left 81% of our population who are categorized as poor to deal with economic stagnation and inflation (stagflation), rising food prices and useless currency.

Money is the facilitator of our daily business activities; when it is volatile, every sector of the economy and household feels the pinch. Mayer A. Rothschild, a famous banker said, “Permit me to issue and control the money of a nation, and I care not who makes its laws!” This is what Somalia is dealing with today: conflicting interests that do not care the welfare of the people manage the currency. After security, the second most significant task is stabilizing the Shilling (maybe this should be the first) and taking over the supply of money and its authentication.  The government will have very little say over the economy as long as the government does not control the currency, and if any progress takes place, it would be very slow and painful one. Therefore, sound monetary policy is imperative for the country’s recovery, stability and growth. 

Somalia will be importing more than it will be exporting in foreseeable future so, controlling and making the currency strong would be her advantage in short-run(flexible currency will be needed if Somalia is going to attract foreign investment especially in manufacturing sector in the long run: cheap labor and currency).

Easing Commerce

Opening and rebuilding highways to help commerce and people travel and reach far and wide with dependable security and the stabilization of the Shilling, will enable the country to recover emotionally and economically in a steadily mode.

The twenty-two years of chaos has left the major linking highways in ruins, consequently it created problems for the business community to move goods and people smoothly across the nation: Bad roads do not only hinder the free movement of people and goods, but also ideas. To rebuild the nation, it is necessary to restore the roads early to enable the movement of people and goods from major cities and harbors to ease the rebuilding process. Notably, safer and smoother highways will make people appreciative of government.

 Easing commerce is the third pillar of making this transformation achievable after security and stabilization of the shilling. The next government should prioritize on these three pillars (security, stabilization of the Shilling, rebuilding and opening up highways including harbors and major airports) concurrently. Of course, organizing States, protecting our farmers, effective judicial system, amending parts of the constitution, tackling piracy, refugees, famine, environmental crisis… all those matter; however, without the three mentioned pillars, other things would not have the foundation to stand on, therefore, establish the foundation first.


Hassan Mire
Studied Economics and Global Studies in US and currently resides in Beijing, CN.Email: mireh@my.uwstout.edu  





Post your comments