Hiiraan Online

Across the world there seems to be a hybrid image out of the country, on one side it is becoming championed as paradise by potential investors and a slowly evolving nation which is finding its feet once more. On the other hand, it is making headlines as a battleground for terrorist groups, an insecure land as threatening to its own population as to those outside its borders.

Strong yet weak?, progress but not perfection?, steps forward or stumbles pulling back? How can Somalia be best described today?

Foreign Partners

A study carried out by Dunia Frontier Consultants in 2011 titled “Foreign Commercial Activity in Iraq,” found that foreign investment in post- war Iraq had grown from $3.87 billion in 2003 to $55.67 billion in 2011. During that year 45 countries were active in Iraq, investing mainly in oil and gas, electricity, water and sanitation, real estate and telecommunications.

Post- Conflict countries are often considered to be a gold- mine for the private sector and Somalia seems to be no different.  On the 10^th of June 2013 the Somali Prime Minister Abdi Farah Shirdon on signed a foreign investment law, emphasising that Somalia was “ready to do business with the world”. 

This is evident through the number of Invest in Somalia events which are cropping up across the world. For example in May 2013 The Somali Reconstruction and Investment Conference (SORIC) was held over two days in Nairobi. Driven by the private sector in both countries and supported by their respective governments, its main objective was “To create an opportunity and build confidence both regionally and internationally in the reconstruction and investment of Somalia and to encourage the business community, especially from Kenya, to get into Somalia.”  

A number of Kenyan private sector companies have already put in motion their plans to capitalise on the available opportunities. For example, Kenya based company Athi River Steel Plant plans within half a year to export 300 tonnes a month of steel and building materials to Somalia.  It follows in the footsteps of other enterprises such as Hass Petroleum. Speaking at the conference, a representative of the firm told participants that it had begun business in Somalia 12 months ago in 3 locations, and has plans to invest in 10 service stations in the next 6 months.

Another example is Simatech Shipping which operates a container terminal in the Port of Mogadishu and has invested in 5 ships to support transportation of infrastructural development materials and other cargo into Somalia.

Aside from this, the Somali Foreign Minister Fowsia Yusuf Haji Adan recently met with her Chinese counterpart, who confirmed that China were hoping to restore ‘high-level exchanges’ with Somalia.  One just has to look at the rest of the African continent to see the role of the Chinese in building infrastructure which is almost certain to feature in Somalia’s case.

With these and other foreign companies slowly flocking to the country, it would seem that the future is bright. However, Rand Merchant Bank’s third annual ‘Where To Invest in Africa’ report last month, found that in terms of operating environment, Somalia is one of the worst options, news which is unlikely to fill potential investors with confidence.

Furthermore, in terms of investment in oil and gas exploration, the UN Monitoring Group on Somalia and Eritrea warned in a 2013 confidential report that Western commercial oil exploration may spark new conflict in Somalia, something which the central Government have to bear in mind before turning the project into a free for all.

Continuing with the topic of foreign presence, a boost to Somalia lays in the fact that a number of countries including the UK, Iran and Uganda have reopened their foreign embassies in Mogadishu while countries such as China and the UAE are due to follow.

The EU through their ‘New Deal for Somalia’ conference also pledged an allegiance to contributing to the rebuilding of the country, its infrastructure and society.

In fact it is perhaps in the eye of the beholder whether it is a positive or a negative, but there is a large amount of International parties who want to be part of the Somali rebirth.  

Students, skills and unemployment

Foreign investors coming into the Country may be expected to be a boon for job creation in the country.  The 2012 Somalia Human Development Report measured the rate of unemployment at 54% up from 47% in 2002. The situation is worse for young people, as unemployment for 14- to 29-year-olds reaches 67%, one of the highest in the world.

With the discovery of natural resources, private companies should be encouraged to set up training academies for young Somali’s to gain qualifications in working in industries such as oil, extraction and so forth, this will ensure that they gain benefits of the resources. It is the job of the Government, when negotiating with private enterprises to make such demands.

On a side note another initiative which should perhaps have been at the top of the Governments list comes in the form of the recently launched Go 2 School initiative. In partnership with the Somali Government, Unicef has invested $117million in providing young people with a chance to obtain education. Considering only four in ten Somali children currently attend school, the launching of this initiative bodes well for the future as it illustrates just how important investing in getting young people back into education for the future of the country is.

Diaspora

The 31^st of August 2013 was a big day for the country, as Mogadishu held its first TEDx conference. Speaking at the event were a number of the Somali Diaspora returning to the country who inspired a worldwide audience with their stories of how lucrative returning home has been. Examples given include social entrepreneurs who are working closely with women wishing to set up their own businesses. There were those Businessmen and women who are taking advantage of Mogadishu once again becoming a part of the world where people are choosing to hold lavish weddings, parties and celebrations.

Certainly across Mogadishu, restaurants, cafe’s, business ventures and public services such as law firms all owned by returning Diaspora are becoming more prominent as people flock home to fulfil their dreams.

However, for every joyful moment celebrating the return of Somalia’s sons and daughters from lands afar, there are challenges and feelings of resentment.

The first complaint according to Mogadishu resident, 38 year old Abdi Hassan is the hike in property prices as owners take advantage of returnees needing homes and offices to rent. “Those coming back from the USA and Europe have money so landlords are taking full advantage of that. However some of us who have been based here all these years do not, yet we are now also facing the same hike in prices.”

Abdi then goes on to discuss the impact of returning Diaspora on an already struggling job market, an issue which Suber Nur has been affected by on numerous occasions. Mr Nur cites the status which members of the Diaspora hold along with their knowing influential people for “stealing our jobs and opportunities.” He goes on to say “Those that come back and set up businesses here and create jobs are welcome, but there are too many who are taking jobs, especially in Government departments, what is then left for us? Yes we are angry and you will find this anger spread in educational institutes in particular for what jobs do students find once they graduate when they are up against experienced foreign returnees?.”

 
Piracy and Terrorism

Earlier this year the Foreign Minister of the United Arab Emirates Shaikh Abdullah bin Zayed Al Nahyan expressed his Governments commitment to continue supporting Somalia. At the third Piracy Conference in Dubai he said ‘“Despite the efforts being exerted by the international community to combat piracy on the Somali coast, the UAE still believes that maritime piracy, especially in the Gulf of Aden and the Western Indian Ocean, is a serious global concern. We will not be tolerant with maritime piracy and will continue to provide adequate support for our partners to build their capacity and control their coasts and monitor their waters.”

Indeed such support and cooperation from the International Community has had an influence on reducing pirate attacks on the Coast of Somalia. In 2012 statistics from the International Maritime Bureau in 2011 there had been 237 pirate attacks and this dropped sharply with only 75 taking place in 2012. Similarly failed attempts at attacks reduced from 189 to 59.

Certainly this is a positive; however, there are also cases which were not reported, furthermore, on the surface the reduction in piracy is much to celebrate. Furthermore has the Somali Government addressed the underlying cause of why individuals join such missions, reasons such as unemployment, poverty and marginalisation, all of which continue to be challenges in society today.

This point links closely to that of terrorist groups. The recent horrific Al- Shabaab linked attack in Nairobi illustrates that the organisation continues to operate both inside and outside of Somalia. In particular it has a stronghold in rural parts of the country; this will hopefully be challenged by the recent issuing of a Fatwa against the group by over 150 Islamic scholars. Al- Shabaab was declared as having no place in Islam and perhaps this will have an influence on the thinking of those young minds seduced by the ideology the group offers. Once more, the issue for contention is the fact that recruitment of militants has been relatively easy due to the number of unemployed young people based in Somalia and until this is eradicated there will be an ever present source of future terrorists.

Once again though, for every piece of negative information there are also positives and the buzz around educational institutions in Somalia certainly show that the country is on its way back to normality and with more private enterprises cropping up it is hoped that they will create jobs which will benefit young people and divert them from the taking of wrong routes.

Corruption, Taxes and Financial Constraints

Limited finances are apparently one of the things which hold back the Somali Government from executing all of its plans. These are the words of a number of Government officials who bemoan the constrained budget present to them which is largely a combination of foreign aid and revenue from the Airport and Seaport of Mogadishu.

Critics however will be the first to criticise these ‘excuses’ considering some argue that a failing of the Somali Government is them not capitalising on making more money from the Seaport and Airport.

 Furthermore the biggest potential minefield of revenue which the Government need to fast track is that of taxes. Numerous foreign companies are setting up in Somalia yet there is no standardised practice to tax them and charge for business licences. This combined with a continuing fragile security situation, corruption and a lack of transparency means that there is still scope for improvement which ultimately brings in more finance into the country through private enterprises.

The continuous allegations regarding the Governments lack of transparency and heavy corruption has meant that much of the Somali electorate have slowly lost faith in their leaders. Accusations regarding clan and tribal affiliations dominating Government along with complaints that decisions and policies being passed are more to pacify and impress the West rather than the population of the country has left many discontented. 

This does not bode well for a Government which is still struggling to control areas beyond Mogadishu and has the added challenge of working with a number of autonomous regions.

By this token creating unity within Somalia is perhaps one of the biggest challenges faced by the Government today, though on a positive note patriotism and ‘proud to be Somalian’ is a spirit which can be seen across Mogadishu and beyond today.

Finally in terms of the Government, it must prioritise the creation of Somalia’s own army which in time will then be able to phase out the AMISOM force which for all its successes, has been the cause of controversy between Somalia and its neighbours and members of the force have also been accused of gross malpractice in the country.

Somalia is continuing to progress at a rapid rate despite the challenges which the wonderful and resilient country continues to face. Investors from overseas seem to look upon it as a goldmine, natural resources are in abundance and International partners from Turkey to China be it for altruistic reasons or not all want to be involved in its growth.

However it must be remembered that the success of a country should be measured by the life expectancy, satisfaction and peace of the people. A hundred foreign companies can come and invest in Somalia, but if the Somalia people do not feel safe stepping out of the house to go to the market, if there is not continuous investment into healthcare services and education for the everyday person, then there is still a long road ahead. So, is the country succeeding or failing? Perhaps this answer is based upon the individual being asked, simply put the answer to this question does not depend upon whether the answer comes from an optimist or pessimist, but rather a realist, someone living the reality of the country every day