Bloomberg News

Somali PM Plans to Focus on Economy to Rebuild Nation

August 21, 2012

Somali Prime Minister Abdiweli Mohamed Ali

“There’s a great deal of unemployment here, that’s why the youth are taking their luck to the high seas,” Somali Prime Minister Abdiweli Mohamed Ali said. “We need a paradigm shift, a new way of thinking, and a sound, tangible plan for competing in the global market place in the near future.” Photographer: Mustafa Abdi/AFP/Getty Images

(Corrects company name in fifth paragraph of story published on Aug. 20.)

Somalia’s new government will focus on the economy as it seeks to rebuild a nation shattered by two decades of war, Prime Minister Abdiweli Mohamed Ali said.

The country is in the final stages of selecting a two-tier parliament, Ali, who is a candidate to become president, said in an interview in Mogadishu, the capital, on Aug. 16. Lawmakers are scheduled to vote in a new president today, though the process may be delayed because the vetting of parliamentarians has taken longer than expected, he said.

The elections are Somalia’s latest attempt to establish a functional central administration that collapsed when the former dictator Mohamed Siad Barre was ousted in 1991. The country has been mired in clan-based conflict and an insurgency led by al- Qaeda-linked militants ever since. The lack of security has allowed piracy and hostage-taking to flourish, fueled by criminals seeking ransoms. Attacks by pirates in 2011 cost the shipping industry and governments $6.9 billion, according to the Colorado-based One Earth Future Foundation.

“There’s a great deal of unemployment here, that’s why the youth are taking their luck to the high seas,” Ali said. “We need a paradigm shift, a new way of thinking, and a sound, tangible plan for competing in the global market place in the near future.”

Foreign Investors

Somalia has a $5.9 billion economy, according to the U.S. State Department. That compares with neighboring Kenya’s $32 billion economy, the region’s largest. Investors in Somalia include Africa Oil Corp. (AOI), based in Vancouver, and partners Red Emperor Resources NL (RMP) and Range Resources Ltd. (RRS) of Australia, which said in March they will invest $50 million drilling two wells in Puntland, a semi-autonomous northern region of the country.

Others vying for the presidency include the incumbent, President Sheikh Sharif Sheikh Ahmed, and parliament Speaker Sharif Hassan Sheikh Aden. The winner faces challenges including tackling corruption, restoring security and reviving a moribund economy.

A United Nations report published in July says graft, fraud, and theft of public resources have “become a system of governance” in Somalia and that revenue intended for development has gone missing, including $131 million in 2009-10. Remittances from overseas workers of about $1 billion a year are its main source of revenue, according to the World Bank.

Regional Pressure

Under a so-called road map agreed upon by Somali leaders last year, the transitional federal government’s mandate from the UN was extended for 12 months to today to prepare for a new administration.

Sheikh Sharif’s government, the 15th attempt to stabilize the country, has failed to end conflict, though security has improved as African Union and government soldiers weakened the al-Qaeda-affiliated al-Shabaab militia through counter- insurgency operations.

Al-Shabaab, which has waged a five-year rebellion to overthrow the government, withdrew from Mogadishu last August and a series of other towns and cities since then. The group still controls swathes of southern and central Somalia and international observers including the UN have warned that warlords may exploit a power vacuum in newly captured areas.

“The transitional government has been propped up by finances from donors abroad, and now is the chance to see if it can stand on its own feet, provide services to the rest of the country, and fill the vacuum from the movement of al-Shaabab from the rest of the country,” Ahmed Soliman, a Horn of Africa researcher with Chatham House, said in a phone interview from London on Aug. 15. “That is the real challenge, and that starts with the next president and parliament.”

‘Careful Planning’

Ali, a Somali-American economist with a master’s degree in public administration from Harvard University and a PhD in economics from George Mason University, said those challenges would be met by “careful planning, adherence to good governance procedures along with support from our international partners.”

“The new federal government will claim its rightful place amongst the nations of the world, make bilateral agreements and have access to the international markets,” Ali said.

The U.S., African Union and UN this month voiced concern over reports of intimidation and corruption in the process of Somalia leaders selecting a 275-member parliament and 54 senators. Somalia’s neighbors, concerned that the continuing conflict poses a threat to regional stability, are also keeping up pressure on its leaders to end the transition and warned that attempts to disrupt the process will result in sanctions on individuals.

‘Clear Message’

“We wish to send a clear message to all those intent on derailing, undermining or manipulating the road map towards a permanent political settlement after August 2012 that Kenya will not tolerate such actions,” Kenyan President Mwai Kibaki said in an e-mailed statement on Aug. 17.

A committee overseeing the selection of Somalia’s new parliament has vetted the the “vast majority of the lawmakers, and they could being working as early as today, the United Nations Political Office for Somalia said in an e-mailed statement yesterday. The statement was endorsed by foreign observers including the African Union, European Union, the U.K. and the U.S.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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