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E D I T O R I A L
HIIRAAN ONLINE
Wednesday, October 15, 2008
It will come as no surprise to anyone that the world is on the verge of a devastating recession, if not a full-blown economic depression. We are witnessing the most economically powerful countries and their multinational powerhouse companies battling inconceivable financial meltdowns and widespread bankruptcies of tsunami proportions. The fiscal blight of the small European country of Iceland best illustrates the precarious nature of the current global economy, a country that the United Nations designated, in its 2007 Global Development Index, as the “best country to live in.” Last week, Iceland’s public finances and private banks declared economic MAYDAY or SOS, requesting from its European allies an emergency stabilization loan to avert a total financial collapse of the island country. To the shock of Iceland politicians, mainland Europe ignored Iceland’s rescue appeal because, Europe, too, finds itself in waist-deep economic crises of its own. Of all countries, Russia had to step in with a five billion dollars emergency stopgap loan to rescue Iceland.
The economically powerful United States and its Western allies, not to mention governments, businesses and individual investors who trade in the global market find themselves in a volatile financial crisis the like of which has not been witnessed since the economic depression of the early 1930’s. The global economic crisis is widely believed to have been caused by several important indicators of economic downturns which include high oil prices, that led to both high food prices (due to a dependence of food production on petroleum, as well as using food as an alternative to petroleum) and global inflation --not to mention the home mortgage credit boom in the west of this decade.
One may wonder, what will this mean for Somalia? What this means for Somalia is that in the crucial coming years; almost all countries will be preoccupied with their own national economic challenges. Foreign aid, which has been dwindling since the year 2000, will likely further diminish if it does not dry up initially altogether. Dr. Jeffery Sachs, an advisor to the UN Secretary General and a prominent economist and champion for the world’s developing nations told Reuters News Agency, “When food prices peaked and began to come down, despite the fact that conditions within poor countries remained hugely adverse, attention already started to wane. … And now with this crisis, it could take even what remains of the effort off the radar screen.”
Rather than foreign aid, it clearly has been remittances (Hawala) by Diaspora Somalis to the tune of 1 Billion dollars a year that has sustained Somalia over the years. A global financial recession or economic depression would therefore mean for Somalia, a sharp reduction of transfer of funds from overseas citizenry. For example, just couple of weeks ago, one hundred Canadian dollars was worth more than one hundred U.S. dollars. Today because of the global money market fluctuations the Canadian dollar is worth less . To send the same one hundred U.S. dollars to Somalia, Somali Canadians have to doll out an additional twenty Canadian dollars , and analysts predict more currency devaluation and a host of negative economic ills resulting from these uncertain times.
Similarly, unemployment rates have been increasing globally particularly in Europe, Australia and the U.S. where huge overseas Somalis call home. The Bureau of Labor Statistics of the U.S. Department of Labor reported an increase of September unemployment rates, which incidentally, the Bureau describes as 6.1 percent for adult men and 11.4 percent for blacks, and of course, Somali-Americans belong to the latter category, whose unemployment rate is much higher than the rest of the population. If the U.S. economy enters into a prolonged recession, there is no doubt such an economic slow down would adversely affect the income of thousands of Somali-Americans as well as their ability to maintain the current level of support to their loved ones in Somalia.
The panick mood of the entire global financial markets, from Tokyo to Wall Street, and the fact that prosperous nations such as Iceland and the U.S. banks are seeking government bailouts, should ring alarm bells throughout the globe of the dangerous times ahead. Similarly, the fact that Somalia is an already collapsed State where millions of citizens are facing death because of war, hunger and lack of water, should further make us wonder if indeed Somalia and its people could survive the lean years ahead. In order to ensure the very survival of Somalia as a nation, what is immediately required thus is that Somalis, particularly those in the political arena, to take advantage of the window of opportunity where the international community is showing some interest in helping Somalia resolve its prolonged civil conflict and reconstitute a functioning Somali state.
Political moderation and the promotion of a national agenda rather than personal, clan or group interest are the first two steps of a national recovery journey. If Somalis reconcile their differences and protect the sovereignty and territorial integrity of their nation from enemies foreign and domestic, Hiiraan Online has no doubt Somalis have the resilience to withstand, albeit ride out, the impending global economic crises.
Somali political, social and religious groups vying for power in Somalia must realize and realize NOW that the grave political dangers the country faces in now compounded by economic predicaments of unprecedented scale. They must understand the gravity of the situation and must protect humanitarian assistance provided by local and international NGO’s.
Somalia needs a healing national plan and definitely not empty bravados and destructive political brinkmanship from those vying for power at any cost.
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