Somaliland: Economic needs and the problem of foreign aid

By: Hirsi Ali Haji Hasan

The bad economy is a product of bad politics (policy), and bad leadership is the root cause of all. It is most unfortunate that our African continent has generally become a symbol for starvation, dictatorship, and political failures. Another specific but prominent problem becomes visible when one tries to search the word “Somali” on the internet and the most upfront results come back to spelling catastrophe. Words such as poverty, starvation, and other similarly demoralizing terms dominate the resulting entries; people plagued by enmity among them or mutual animosity with neighboring ethnicities, from the day a modern political system was realized to date. What is worse is that the Somali name has become synonymous with piracy and terrorism, which negatively affect every Somali, wherever found in the world.

In Somaliland, in addition to the above-mentioned problems we share with all Somali people, we are a nation unrecognized by the world, despite having a functioning existence for more than a quarter of a century. That created an obstacle to benefit from world financial organizations or receive direct funding from donors. The problems of failing economy, inflation, the Saudi rejection of our livestock, which is our primary export asset, limiting pressure put on the Hawala remittances which are our second most important financial source, the third most important financial source being the unreliable indirect foreign aid in which our net receipt is about 10% to 30% only.

On top of that, overwhelming hopelessness, divisiveness and the uncertainty facing the society in which the ruling government has no clear plan to tackle, from the time the sitting president took reigns to date. The annual presidential speech contained not even a hint of any planned agenda for the future, whatsoever.

The public feelings about the dire situations at hand show that many legitimate questions being asked. Let me sample just a few of such questions: “What has just happened to us anyway?”; “Did we hear that the president has ‘locked us up’!? What? What happened to the economy and freedom of movement? Perhaps, he meant well, since crooks and corrupts deserve to be taken to court, but why didn’t he just close the finance loopholes, instead of locking us up all in? What a wonder!”

The independent economist, Azar Jammine, analyzing the same problem said, “Bad politics has broken the economy’s resilience, and now even 1% growth is impossible.”

Therefore, when I observed the economic circumstances and the public’s burning questions denoting hopelessness, I decided to tackle these problems by analyzing and writing about them and to dedicate time, intellect, and the capacity of my pen, as long as I can. My aim is to locate and state the problems and at the same time point to possible solutions since any citizen has a responsibility and role to play. Constructive criticism is part of the citizen’s role fulfillment, particularly the opposition parties. The importance of the party member politicians playing their role of stating clearly their opinions and ideas on any political or economic problem at hand is crucial, in any given time. That is the basic aim of writing this article. This is an independent thought in which I generally do represent those in agreement with me.

The economy is the backbone of life, the engine of governance, and the most important symbol of power in which today’s world governments compete against each other, to gain the influential upper hand. World governments compare against each other in the level of economic development and wealth accumulation or poverty level of their peoples. Therefore, a healthy economy is a deciding indicator of the level of any society’s wellbeing. In today’s world, the importance of a sound economy is undeniable and its scientific knowledge which is competitively appropriated constantly is highly valued by all.

The former prime minister of the United Kingdom, David Cameron, once talking about the importance of economy stated; “The economy is the start and end of everything. You can’t have successful education reform or any other reform if you don’t have a strong economy.”

The former United States president, Ronald Reagan, similarly stated; “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Our righteous religion put a strong emphasis on the importance of prioritizing economy and wealth, to the point where the Zakat became one of the five pillars of Islam. On the one hand, the Islamic jurisprudence experts put the prioritization of economy and wealth in the five most important principles safeguarded in Islam. On the other hand, according to the Somali culture and tradition, proverbs and wise sayings, such “one does not gain wealth by sitting stagnant”, which could be termed as when production increases the economy expands, and when economy expands wealth creation possibilities could be achieved, such as job market creation or betterment of an existing one, sectoral development, and general welfare.

The poet, Abdullahi Musa, talking about the subject of economic negligence, composed:

Although he is selfish, whom you could not gain any

When, one day, while he is away

The woman of the house nourishes you

However you access it, a wealth of kin is always at reach

It is painful when relatives indulge in economic negligence.

On another point, the percentage of foreign aid is 10-21%, according to the Aid Flow in Somalia report, compiled by the UNDP[1]. Since, to begin with, foreign aid given to Somaliland and Somalia, in general, is very small, the actual net portion received is also negligible. A recent analytical article penned by Ilyas Mohamed Hussein and Abdelaziz Guud’adde, titled “Gargaarka Shisheeye: Gurmad mise Gumayn (Foreign Aid: Relief or Patronage)”, points to the multitude problem of aid they named “Leefoo ha Liqin (Lick it but do not swallow), under the influence of the book “Dead Aid” by Dr. Dambisa Moyo.

Many times, it is stated that foreign aid does not address the real needs on the ground or does not come at the time needed. The accountability needed to register the actual amount of aid received and its proper management and distribution is also in doubt, as stated in a report compiled by the Ministry of Planning, Somaliland Aid Flow report:

“Most organizations responded and submitted their reports, … while others did not respond at all. Some organizations, including UN agencies, reported data without showing the amount disbursed through their implementing partners, and for that reason, the ministry was not able, to sum up, the amounts disbursed by UN agencies and other INGOs.”

What is evident in this piece is the government’s vulnerability. Foreign aid sometimes facilitates bad governance and deep-rooted corruption, which originates all the way from the source, the foreign donor offices abroad. Is it us who failed our responsibility only to become gatekeepers for the aid donated to us or is it that foreign aid is nothing but a farce? I will leave that to the readers.

The causes of bad governance, corruption, and lack of accountability can be summarized in these several important points: Week governance and judicial malfunction. Some of the workforces tasked with implementation lack understanding or do not properly understand their roles while others lack political power or knowledge to defend and communicate their principal stand. Some are corrupted or become a vehicle for corruption without knowing, while some more become facilitators for their countries’ policies or the will of the donors they work for and do not care about the effects foreign aid has on the receiving country.

During the period I was involved in the government, there was a day when I received in my office a high-level delegation, which came to talk to me about proposed aid package earmarked for road infrastructure. They communicated their proposal in a way that seemed threatening or fooling. I communicated my counter-proposal fiercely but in a clear and precise language. I, fortunately, commanded a high office in the presidential palace and I could at that moment understand the pressure put on the officials in the lower governmental offices.

Therefore, it is important to come up with a new approach to change the current situation of foreign aid and relief programs. It is about time to face the truth and clearly state that the aid we receive is donated by the source donors and neither the delivering organizations nor the distributing agencies. So, officials of the receiving country have the right to know the precise amount of the aid donated, when, where, and how the distribution is implemented. Secondly, there must be a process agreed on by both the receiving country and the aid delivery organizations which does not currently exist in Somaliland, as reported in the above-mentioned report. “The absence of comprehensive Aid Management Platform has put the Ministry of Planning into a difficult position to monitor and report the Aid flow level.” On the same note, there must be a transparent environment in which concerned offices from both sides are able to work together.

Also needed is a reporting process in which the receiving country, the donor country, and people aid are distributed to could access full accounting report, in order to know the amount received and be able to evaluate the efficiency of aid projects. Lastly, though not comprehensive here, requirements for better partnership in which both sides should consider are:

The receiving party (Somaliland) should have laws/policies on aid, national priority sectors, citizen participation and input from the end-users, research (inquiry) on vulnerabilities, consequences and effects, a process for quality control and accountability, reliable reporting system between parties, a system for information and community awareness, an office for reporting back to the donor organizations, an information manual (kit), and easy facilitation for officials and operators in order to fulfill their duties without hindrance.

The donors should firstly employ capable staff who can properly lead and implement aid projects. To ensure this, donors and aid agencies must make sure that their implementation teams have the needed knowledge and capability for successful execution. From the start of any project design, it is essential to consider reciprocal opinions and advices from both the government and agencies responsible, in addition to the end-users who will finally receive the aid, to ensure the most effective and efficient implementation of projects. All these actions must be based on actual research on the existing realities and needs, making sure that project categorizations are not based on faulty assumptions that could ignite conflicts, and there must be a taskforce for project direction and supervision.

By: Hirsi Ali Haji Hasan

The Leader of the Waddani Party, Somaliland.