by Liban Obsiye & Sakariye Hussein
Sunday, November 10, 2013
The cost of living is rising globally and even in the most developed of nations such as England there is concern about whether the ordinary citizens on various incomes will either eat or heat their homes in the treacherous winter months. The European Union as a whole, apart from Germany and a few Scandinavian states is facing the worst youth unemployment since its inception. In America, where prices have always outstripped the majority of the populations ability to pay, there are wide scale home repossessions, an increase in homelessness and a rise in the number of food banks where even those who do have jobs but are on low incomes eat with the most vulnerable. In China, India and Brazil the economic miracle of the last two decades appears to be exposing the enormous cracks it created between the few beneficiaries of the commodities and export booms and those who facilitated it but have nothing to show for it. The Brazilian riots a few weeks ago was a direct result of the gap between neo-liberal economic forecasters who sit in their ivory towers and the workers who are angry with the government's inability to address their most basic needs such as housing and controlling general inflation which is causing the cost of living to sky rocket.
In Africa poverty has been a constant companion due to poor governance, corruption and a general public that are either too fearful to question their leaders or do not bother as they are busily focused on their daily survival. Today the cost of living in Africa has escalated to a point where the traditional remittance amounts that would once feed an entire family is nothing more than change from a bag of rice. The daily essentials that kept a family going such as beans, rice, wheat and flour are too expensive for the ordinary people while their wealthy counterparts dine in style a few miles away in one of the many new uptown hotels springing up from the ground all over the continent. Somalia, its regions and the self-declared independent state of Somaliland are no different. In fact the problems of rising costs is more dangerous in these places because of a lack of functioning state, the present danger of returning to civil war over land and in some places the lack of government acknowledgement of any of these issues.
Before the civil war, under the Military dictator Siad Barre who came to power in a military coup, food security was prioritized above all else. The Soviet inspired Barre was determined that Somalia would grow what it needed and the import of goods that were foreign and could be made in Somalia were highly taxed as a deterrent to those who did not want to directly invest in the nation. To aid and sustain this food security ambition, farmers were given free seeds, government subsidised farming equipment like tractors and a guarantee of purchase from the then Ministry of Agriculture which managed the successful Agricultural Development Corporation (ADC). Those who expressed an interest in farming and were capable of doing it successfully were given government plots to farm alongside expert advice and mentoring from qualified state officials and other farmers. Under the highly successful ADC strategy Somali farmers grew corn, sorghum, mangos, sweet oranges, bananas, grapefruits, ground nuts, sesame seeds and cash crops such as tomatoes, onions, potatoes and beans. Somalia under Siad Barre also had many factories focused on achieving his food security policy goals which focused on canned foods such as fish, sugar, pasta, meat and even alcohol to distribute to the African continent. Further, there were large textile and cement factories as well as booming local economies and markets across Somalia. This determined self-sufficiency policy under Barre ensured only those things that Somalis could not grow or make such as rice were imported and as a direct result of government intervention in the various produce and service markets, prices were low and affordable for all.
Looking at Somalia today, it is difficult to imagine that the last fully functioning government under Siad Barre before the civil war controlled prices of goods nationally and directly competed with private sector sellers and service providers to lower the cost of living for the Somali people and to avert market abuses by potentially dominant companies. These evident competition regulations were never written down as statute but the practice of discount and low prices for the public sector employees and the low earning Somali public kept the predatory pricing of the private sector at bay. The use of locally sourced goods such as cotton and food kept prices stable and a commitment to infrastructure building such as roads and upgrades connected rural farmers and general traders with urban markets and customers. This would be a modern day development success story anywhere in the third world but Somalia is nowhere near this stage yet.
Today's war torn Somalia, its regions and the self declared independent state of Somaliland which has had peace for over two decades are among the most expensive places to live in the African continent. This is despite all of them having some of the poorest citizens in the world and largely relying on international aid and remittance from the globally scattered Diaspora to function. The extortionate rise in prices of essentials such as food and clothes is nothing short of criminal market abuse by a few monopolistic groups and individuals which act both as wholesalers and sole traders all over Somalia and the self declared independent state of Somaliland. The fact that only these small number of irresponsible corporations have the financial capability to purchase and import in bulk from abroad, makes the cost of living crisis more acute. If the smaller traders were able to import themselves or buy locally, they would be able to break the crippling cycle of market abuse and unsustainable high prices which they pass on to their customers and which eats away at their profits and weakens their cash flow. More painfully, as the smaller traders are trading directly in the most affected communities, it is they who suffer the back lash and are generally blamed for the rise in prices by customers and local politicians.
Most of the few companies and individuals which abuse their market dominance in the fragile Somali state and impoverished Somaliland continually cite the uncontrollable rising cost of commodities and goods they import from abroad. They have in the past blamed unreliable supply chains and transport too. This arguably is a reasonable defence in an age of globalisation and volatile markets but what is more difficult to justify is the secrecy around their purchasing and the continuous and unbearable weekly extortionate price increases in goods and services. With regular drought and lessening remittance support for families from the struggling Diaspora affected by the global financial crash, the Somali importers ought to have been at the forefront of reducing the cost of living for their suppliers and customers. But they are not and as some have learnt the fanciful term Corporate Social Responsibility which they bore anyone that will listen to death with but they do not understand its most basic meaning. As if to show their contempt, many of the larger Somali importers inflated the cost of presents, clothes and food beyond its already crippling heights during Ramadan and Eid this year. A Mogadishu resident interviewed for this article claimed that when he asked a wealthy businessman why the prices had risen, the reply was either pay or leave. This cannot be the basis of sound economic policy for a tribally divided people living with sheer poverty and sustained by donations from abroad in its many forms. Even professionals employed in the major cities such as Mogadishu, Hargeisa and Bosasso are barely managing to survive despite their privileged positions.
“A year ago $130 was enough for my family of five, but now I have to pay more than $200 per month on food,” said Mukhtar Aweis, a pharmacist in Mogadishu. He admitted that times were so tough that his family has been forced to eat just two meals a day most days with simple snacks for the children at night. Jama Nur, a student who lives with his family in Hargeisa was equally as pessimistic about the prospects of living costs reversing positively any time soon in Somaliland. “In Hargeisa the cost of the basics like 50kg of wheat flour and rice averages around $50. I have not had meat regularly in a year. There is not enough supply of wheat flour in the market because business owners have kept it stored away to demand higher prices in the future,” he said in a telephone interview.
If the poverty and hunger of the Somali people is to be alleviated it will not come from the few irresponsible profiteers but from sound government social and economic policies and direct market interventions.
The Somali government does not have food security as one of its 6 pillar plans but the aim of securitising the nation and establishing peace and a power sharing arrangement is crucial to this ambition in the future. At present the Somali government is unable to do much to alleviate poverty and control food prices as it does not control many key areas of Somalia yet. In fact, the majority of the lower and middle Shabelle and Jubba regions as well as Hiiraan which are the food basket of the nation are not in government hands yet. These regions will be difficult for AMISOM and the Somali government troops to penetrate because Al-Shabaab uses them to organise, fund and co-ordinate attacks on them and their international partners. Key to Al-Shabaab’s success here is the control of food prices and the need for International NGOs to purchase local produce if they want to work in the area. This is a policy that, despite their violence, still makes them popular in the food basket regions of Somalia. President Hassan Sheikh's government is working tirelessly to tackle Al-Shabaab in these heartlands and raise global awareness of the plight of the nation in order to attract support and funding for national reconstruction. In the absence of full national unity and control, the Somali government must do a better job of confronting business leaders and individual traders who are the cause of price rises. In the future, the Somali government should, like Siad Barre, prioritise food security, protection and support for farmers as well as manufacturing to promote self sufficiency. They must create the physical and policy environment through which rural workers who are abandoning the fertile countryside in favour of the cities in dangerously large numbers are proud of their occupations and have access to local and national markets. Furthermore, to break the monopoly in products and services that must be imported, like they do in Pakistan, Venezuela and Brazil, the government must directly intervene in the markets as a direct competitor, regulator and in some cases both.
Globally, the entry of financial speculators in the food markets, growing demand for corn for green technology and the purchase of vast amounts of fertile land by national governments such as that of China in countries like Zimbabwe make food security and the growth of local economies more difficult in developing countries. The prevalent use of counterfeit money and the devaluation of the Somali shilling in favour of the US dollar which all businesses prefer in Somalia today create more market turbulence and price fluctuation. However, despite this, there is a public shift towards buying locally sourced goods and food in Somalia as a backlash to imports and subsequent high prices. Further, many of those who are opting for local produce where they can find it are citing that it is better for their health too as the food is organic and they know what is in it as opposed to those that are imported which generally are of poor quality and often out of date. For this localism to have real impact though there must be wide availability of produce sourced locally for the public to buy which there isn’t at present. An easy way of addressing this is to support agricultural education which will aid any future food security policy, potentially tackle youth unemployment in the future and accelerate the creation of local produce markets which are fundamental to lowering the cost of living for all in Somalia.
In Somalia which still is fragile and functions daily with the support of AMISOM troops and where government is historically authoritarian and mistrusted, the new administration can transform the public perception of the state. Hassan Sheikh is clearly attempting to create a responsive, accountable Servant and not a Master state. This requires will, skill and public support. One way for the new Somali state to make its presence felt is to work towards addressing the rising cost of living which is hurting its poor and vulnerable war scarred citizens. Addressing predatory pricing and eventually intervening in essential food and product markets in order to alleviate their pain will make the government popular and define the role of the state in people's lives. In Somaliland, government inaction is hurting the very believe in independence and the Kulmiye administration. Competition law, market regulation and interventions all take time and require the capacity that the Somali government and certainly the Somaliland administration lack. However, both can start by putting the issue on the agenda and abandoning the collective political silence on the issue.
The Somali Diaspora is dangerously close to been unable to afford bankrolling the lives of those relatives they support in Somalia and the Somaliland. For many families just eating, and not even nutritious meals, is a challenge due to extortionate price rises. Many of them have to pull children out of schools and send them out to work to make ends meet. This is a grave Human Rights breach which is exacerbated by the lack of effective government interventions and the absence of the debate in the public sphere. If nothing is done urgently, the most vulnerable and traumatised of Somali people might be starved by their business leader’s greed. Or more dangerously challenging for the Somali government and the self declared independent state of Somaliland, the affected public can start the kind of protesting that could plunge the entire Somali people back into war, political uncertainty and famine. It's time both political and business leaders took heed for in the developed West it can be referred to as a cost of living crisis but in fragile, war torn divided Somalia with poorly functioning government institutions and no existing welfare safety net, it is simply the rising price of survival.
Liban Obsiye is a law graduate with a Masters in Public Policy from the School for Policy Studies, the University of Bristol. He is a graduate of the global American Express Leadership Academy. He currently works as a freelance writer on social policy and as a researcher and consultant on international development, Diaspora engagement and Human Rights education and implementation for Transparency Solutions UK. He can be reached through:
[email protected]
@LibanObsiye (Twitter).
Sakariye Hussein Studied Education and Community Development and management both in Somalia and England. He has extensive experience of working in the media and is a freelance writer and consultant on local issues regarding the Somali community. He lives and works in Bristol. Sakariye can be reached through:
[email protected]
@Zakaria jawdeer (Twitter)