Saturday, August 30, 2014

You are here

Somalia: New Friends, Old Debts, and the Road to Recovery

With Somalia seemingly en route to recovery, what obstacles remain in its path?
Share |
A builder working on a water tower in Somalia. Photograph by AU-UN Ist/ Tobin Jones.

After decades of suffering from geopolitical proxy wars, iron-fisted military government, ruthless warlords, civil war, religious militancy, and foreign interventions, Somalia today stands at the threshold of a new era.

Countless serious challenges remain, but Somalia could be starting emerge from decades of conflict and instability, helped by new bilateral relationships based on mutual interest and respect.

Aside from its strategic coast and position as a gateway to sub-Saharan Africa, Somalia has untapped natural resources and massive rebuilding needs. Many recognise its potential as a lucrative emerging market. These factors provide Somalia with opportunities to expand and cultivate diverse friendships.

Indeed, a number of old friends have emerged out of their diplomatic ambivalence since Turkey reassumed warm diplomatic relations with Somalia in 2011 and opened an embassy in Mogadishu at a time it was considered the most dangerous city in the world.

US relations

On 17 January, President Hassan Sheikh Mohammed met with then US Secretary of State Hillary Clinton to reactivate the bilateral relationship between Somalia and US.

But while the US State Department welcomed “the great strides toward stability Somalia has made over the past year”, it made no commitment to change its Dual-Track Policy – under which the US will deal with any Somali players, armed or unarmed, as long as they are not associated with the Islamist militants al-Shabaab – and ‘Drone Diplomacy’. These are two aspects of US policy in Somalia that has been undermining the legitimacy of the central government.

Sustainable bilateral relations between Somalia and the US will remain a political mirage as long as the US policy toward Somalia continues to be driven by counter-terrorism expediency and its diplomatic gestures are delivered by drone strikes. Pressure will continue mount against both nations for these policies as they enjoy greater scrutiny and attention, especially when the documentary Dirty Wars hits theatres in March.

John Kerry, the new US Secretary of State, said in his confirmation hearing: “We cannot allow the extraordinary good we do to save and change lives to be eclipsed entirely by the role we have had to play since September 11th, a role that was thrust upon us”. Whether this wisdom is followed under Kerry and leads to change in approach to Somalia remains to be seen.

Old debts

Statehood is not sustainable without steady revenue and economic growth, especially in a country in which poverty is chronic, youth unemployment is at almost 70%, and over 2 million people are internally or externally displaced.

But just as Somalia needs a fresh start, bill collectors are lining up. While there is nothing illegal about that, a few issues should be illuminated:

Firstly, Somalia is currently being considered for inclusion in the International Monetary Fund’s Heavily Indebted Poor Country (HIPC) initiative. If accepted, Somalia would be eligible for debt reduction packages.

Secondly, Somalia could feasibly challenge some of its debts under the ‘The Odious Debt Doctrine’. The rationale driving this legal doctrine is that loans not made in good faith to non-democratic governments with questionable legitimacy that then use these monies against their public interests – such as to oppress citizens, for embezzlements or other overtly corrupt motives – cannot be transferred to democratically-elected governments that succeed them.

However, a more profoundly complex issue than dealing with these institutions could be dealing with “vulture fund” profiteers who purchased Somalia’s debts when the state was on its death bed. Somalia would have to challenge these debts in the court and hope to follow the precedent set by the Democratic Republic of Congo last year when a court ruled that old debts had been sold illegally and that the “vulture fund” could not collect the $100 million it claimed it was owed.

Processes and sacrifices of transformation

The current government ought to appoint a Debt Audit and Asset Recovery Commission that includes economists, international lawyers, MPs and civil society organisations.

Moreover, it must find ways to ensure the recovering state is not held ransom for generations to come, including through aid monies on which Somalia is currently heavily dependent. He who pays the piper calls the tune, and Somalia now has too many pipers playing too many tunes.

The good news is that the government already has ways of generating revenues such as taxation, postal services, licensing the telephone gateway, banking, commercial fishing, leasing agricultural lands, and so on. But these will have to be prioritised and developed.

There are also valuable lessons to be learned from the magically disappearing billions in South Sudan and Haiti, not least the importance of having in place effective checks and balances as well as the mechanisms and the capacity to invest funds into viable and important projects.

The Somali people seem to be resiliently rejecting the permanency of failure. By and large there is a popular march toward the light at the end of the tunnel. However, the process is not yet complete and there remain potentially hazardous pitfalls along the way. The current momentum must be guided with vision, maintained with prudence, and guarded with vigilance.

Think Africa Press welcomes inquiries regarding the republication of its articles. If you would like to republish this or any other article for re-print, syndication or educational purposes, please contact: editor@thinkafricapress.com

For further reading around the subject see:

 

Share |