Sudden interest in Somalia points to suspect Western corporate interests

In her book The Shock Doctrine, Canadian author Naomi Klein argues that Western governments often use humanitarian relief and reconstruction as an excuse and an opportunity to force poor or strife-torn countries to adopt neoliberal economic models that ultimately serve the interests of Western corporations.

Citing examples from Chile, Sri Lanka, South Africa, Russia, Argentina, among other countries, she shows how political and economic turmoil has been used as an entry point by Western countries to introduce economic reforms that would ordinarily be unpopular with local populations.

In Iraq, for instance, after the ouster of Saddam Hussein, US companies made a fortune providing security and other services to Iraqis, all in the name of promoting democracy and good governance.

In Chile, the US government actively undermined the presidency of Salvador Allende, a left-leaning democrat, and supported the coup that brought Augusto Pinochet to power.

Pinochet, in turn, unleashed neoliberal reforms that were in line with US interests.

In Sri Lanka, after the devastating tsunami of 2004, land previously occupied by fishing villages was taken over by big hoteliers.

CAPITALISM

Klein refers to these events as “disaster capitalism” — “orchestrated raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as exciting market opportunities.”

While I would not go so far as claiming that the London Conference on Somalia hosted by the UK government last month was yet another business opportunity for Western governments and companies, the timing of the conference is certainly suspect.

Facing massive unemployment and recession at home, Western countries may be looking at Somalia as an opportunity to expand markets and revive local industries.

It is possible that Western countries have woken up to the fact that Somalia represents an untapped source of natural resources and a destination for Western goods.

Somalis are in need of virtually every service, and have huge infrastructure shortfalls, which could be filled by Western companies.

Also, the country’s resources have remained under-exploited for 20 years, and its leaders could be persuaded to give rights and concessions to Western companies in exchange for aid.

Indeed, two days after the London conference, the Guardian newspaper reported that Britain was seeking oil-drilling rights in Somalia.

The Canadian company Africa Oil has apparently already begun oil exploration in Puntland.

Is aid the carrot that is being used to obtain these rights? It’s possible.

In London, Somali Prime Minister Abdiweli Mohammed Ali told the Observer that in the future, a share of natural resources would be offered in return for help with reconstruction.

“There’s room for everybody when this country gets back on its feet and is ready for investment,” he said.

And who exactly is in charge?

Questions are also being raised about who will drive the reconstruction project.

BBC journalist Mary Harper, the author of the newly-published book Getting Somalia Wrong?, told this writer that despite the impressive groundwork done by Britain in engaging with, listening to and learning from Somalis, the final communiqué emanating from the London conference appeared “rather thin and vague on many key issues.”

For instance, the question of who exactly will be in the charge of the country once the tenure of the Transitional Federal Government (TFG) expires in August this year is not spelt out clearly.

The conference endorsed the establishment of a Constituent Assembly to replace the TFG, but its task seems to be focused purely on governance issues, such as the preparation of a constitution, the establishment of institutions and preparations for elections.

But this Assembly will not manage donor funds. Nor will it manage or collect taxes from ports and airports.

The task of managing Somalia’s economy appears to rest with the newly-established Joint Financial Management Board, comprising representatives from Britain, France, the European Union, the World Bank and the Transitional Federal Government (TFG) (and later any future government), which aims to “increase transparency and accountability in the collection and efficient use of public revenues, as well as international development aid, and which will help strengthen Somali public financial management institutions.”

The Board’s stated objectives are to minimise corruption, maximise the use of funds in the public interest and improve accountability and transparency on where and how Somali revenues and donor funds are spent.

At face value, this appears to be a step in the right direction given the corruption and financial incompetence within the TFG, United Nations agencies and humanitarian organisations.

Lack of trust in the TFG’s and the UN’s ability to deliver development to Somalia and use funds appropriately was probably what prompted the establishment of the Board.

Somalia is desperately in need of a financial facility that can monitor how donor and domestic funds are used.

However, Canada-based Abdirizak Mohamed, editor of Hiraan Online, is worried that the Board is yet another nail in the coffin of Somalia’s sovereignty.

“We may have lost our sovereignty when we allowed African troops into Somalia and when the UN Security Council expanded the mandate of Amisom a day before the start of the London conference. But now with this new Management Board, comprising European donors and the World Bank, we have lost our independence to manage our resources.”

The presence of the World Bank in the Board also raised questions about the philanthropic intentions of Western donors.

Is Somalia going to be revived through loans from the Bank, and if so, will Somalia be in debt before it is on its feet?

The other issue that is not clear is whether the oversight function of the Joint Financial Management Board will supersede agreements that prevent donors from monitoring UN agencies.

The European Community has signed a Financial and Administrative Framework Agreement (FAFA) that does not allow it to do external audits of UN projects that it funds.

The UN is expected to manage EC contributions in accordance with its own rules and regulations, which allows for a lot of pilfering and mismanagement.

Will the FAFA agreement be overlooked in Somalia?

Non-traditional donors

The glaring absence of non-traditional donors, such as Turkey — which has made significant and tangible contributions to the reconstruction of cities such as Mogadishu in recent months — from the Board suggests that perhaps the real intention of the London conference was to diminish Turkey’s influence in Somalia and impose a West-friendly regime to ensure that Western companies and corporations benefit the most from the reconstruction project.

Since the Board will not only decide how money is used but where, it could decide to undertake projects that are most beneficial to countries represented on the Board (i.e. Britain, France and the European Union), rather than allow for more open and competitive bidding for projects.

Some analysts feel that the London conference was hastily convened to influence a conference on Somalia being organised by the Turkish government in June, which might have come up with alternative solutions that may not have pleased Western governments.

Many Somalis have welcomed Turkey’s aid to Somalia, partly because Turkey is seen as a “neutral” partner, and as a secular Muslim nation, is culturally more acceptable to Somalia’s largely Muslim population.

NEOLIBERAL MODEL

The dominance of traditional Western donors in the Joint Financial Management Board also suggests that the development paradigm being pushed in Somalia will be aligned to the Western neoliberal model that calls for increased liberalisation, deregulation, privatisation and cutbacks.

However, this model cannot work in Somalia where regulation is actually needed to stabilise and revive the economy and where state institutions are either non-existent or too weak to regulate markets and the economy.

The London conference, while purporting to come up with a “Marshall Plan” for Somalia, also failed to recognise that a Marshall-like plan can only work in countries (like post-War Germany) that already have well-established institutions and industries that can be revived through an injection of funds. Somalia has neither.

While businesses such as mobile phone companies are thriving in Somalia, they are not regulated or taxed, though an informal system of taxation has developed whereby “taxes” are paid to faction leaders, local administrations, Islamist groups, port militias and armed men at roadblocks.

The lack of an established tax regime in the country and the absence of regulatory bodies means that industries operate informally, even when they are highly profitable.

While Somalis are known for their entrepreneurial culture and their ability to take risks, the injection of donor funds (most likely followed by the recruitment of Western companies to deliver services and infrastructure) could cause a sudden volatility in the economy, and fuel resentment of foreign-owned businesses.

Chatham House analyst Adjoa Anyimadu told the Guardian: “There’s already a lot of scepticism from parts of the Somalian community about the reasons for the sudden focus on Somalia and the reasons behind the UK’s interest.

"The potential for things to go wrong is high, for the population to feel they are being undermined or invaded by foreigners.

"Al Shabaab has little credence with many Somalians but a foreign intervention could create a common enemy.”

Africa’s role underplayed

The London communiqué is not completely silent on the role of African countries in Somalia’s recovery, but their role is mostly confined to the area of security, terrorism, in particular.

There is reference to the achievements and sacrifices of “Amisom and other forces” — and an endorsement of the UN Security Council’s decision to expand the mandate and raise the troop ceiling of Amisom — but Uganda and Burundi are not mentioned by name, nor are Kenya and Ethiopia cited for their recent efforts in removing Al Shabaab from the country.

Nor is there any recognition of Kenya having borne the brunt of the Somali refugee crisis by hosting the largest refugee population in the world for the past 20 years.

It seems as if Britain and Prime Minister David Cameron decided to hold the London conference to take the shine off the work done by African countries in bringing about stability to the country, and to take credit for work that had already begun long before they decided that Somalia needed the world’s attention.

This is not to say that an international conference focused on Somalia’s myriad problems was not needed. But it has managed to make the process about the West’s involvement rather than Somalia’s rescue.

Ali Ghedi, an MP in the current government, says that by expanding Amisom’s mandate, for instance, the international community showed that it was not ready to build local capacity or invest in an effective Somali army.

HOME-GROWN IDEAS

Harper, who covered the London conference for the BBC, is of the opinion that the Somaliland example of a home-grown democracy “has demonstrated that, when left to themselves, Somalis can form a viable nation-state.”

Somaliland (which is not internationally recognised) is located on the northern edge of the Horn of Africa and declared itself independent of the rest of Somalia in 1991. It has since emerged as the most peaceful region in the country.

Harper added: “Time and again, delegates at the (London) conference insisted that this was not about telling Somalis what to do, that it was about helping Somalis do it for themselves.

"But the outcome appeared to do the opposite, with plans for outsiders to play a central role in monitoring the economy, dealing with Somalia’s security issues and ensuring that the political transition ends in August.

"It seems that the ‘international community’ cannot help telling Somalia what to do, an approach that has backfired over the past 20 years, and possibly made the situation worse than it might have been if Somalia had been left to its own devices.”

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* Rasna Warah is a columnist with the Daily Nation in Kenya. This article was first published by The EastAfrican weekly.
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