Seen on the Awdal mailing list:
Capitalism Is Thriving Unfettered In Somalia
By Susan Linnee The Associated Press
EL MA'AN, Somalia - Hundreds of barefoot stevedores stagger beneath
sacks of cement and flour off-loaded from the boats that ferry bulk
cargo in from the six ships lined up on the horizon.
Television sets, computers, generators, satellite dishes and Mercedes
automobiles are towed on flat barges into this private port and into
the ultimate uncontrolled market: Somalia. Despite years of conflict
and a decade without a national government, Somalia has continued to
export camels, cattle, goats, bananas, frankincense, meerschaum,
dried limes and charcoal and to import just about everything else.
There is a modern port 35 kilometers (22 miles) to the south in the
capital, Mogadishu. But it has been shut since Unosom, the extensive
UN relief operation in Somalia, pulled out in March 1995 and rival
armed factions could not agree on who would run it and receive the
Now, much of the international commerce to and from Mogadishu,
central Somalia and neighboring Kenya and Ethiopia passes through
this natural harbor, which is protected by a coral reef - and by 200
Abdulkadir Osoble Ali has returned to Somalia from the United States
to run the port's round-the-clock operations. Like most Somali
businessmen, the 38-year-old former Washington taxi driver would
welcome an efficient government, if only to reduce the cost of
security, which entrepreneurs say eats up as much as 30 percent of
their untaxed profits.
Somalia has not had a national government since faction leaders
overthrew the 21-year dictatorship of Mohammed Siad Barre in January
1991. But this has been a boon of sorts to the private sector that is
thriving without the stifling bureaucracy, restrictions and
corruption that characterized most of Mr. Siad Barre's iron-fisted
In Mogadishu's Bakara market, in a store piled high with cartons of
hand soap, safety matches and Chinese red iron and brass scales, a
wholesaler, Muhadin Hashi, said he was happy to pay the $1.50 a
carton that Benadir Maritime Import Operations - the company that has
invested $1 million in the port - charges for ship-to-shop service.
The Mogadishu Association for Research and Statistics, a new
consultancy established by two Somali economists, is creating the
first economic database for Mogadishu, whose population has swollen
to an estimated 1.5 million with the influx of refugees and gunmen.
Their initial findings indicate that alliances that cut across
Somalia's six main clans have made the most effective business
partnerships; that many of the petty traders, who account for 45
percent of all business activity, started out with less than $100;
that remittances from Somalis abroad play a key role in the economy,
which is starved for capital, and that after a decade of war, 63
percent of the women in Mogadishu are involved in commercial
Businessmen such as Abdi Mohammed Sabrie, one of the six original
investors in Nation Group, which runs a small airline, a
telecommunications company and food-processing plants, hope that a
peace conference that has gathered a cross-section of Somalis in
neighboring Djibouti will result in government.
Too much of the revenue produced by the year-old pasta factory, the
plastic-bag factory and the bakery he manages goes toward paying for
security, pumping water and generating electricity, all things that
he thinks government should provide. And without a government, there
is no central bank to stand behind letters of credit, no possibility
of obtaining insurance or issuing internationally recognized
certificates of origin.
Entrepreneurial spirit is not what is lacking in Somalia. The problem
is infrastructure. Mohammed Mahmoud of the Elman Peace and Human
Rights Center says small enterprises such as the one he manages can
do a better job than a government in producing power for the city.
Every evening, a technician trained in the local electronics school
fires up a 350-kilowatt generator to light the neighborhood as a
prayer leader calls the Muslim faithful for the penultimate prayer of
the day. About 6,000 private customers pay for the electricity; Elman
Center provides free lighting for the streets and mosques.
There are half a dozen private power producers in Mogadishu, each
operating in a specified sector. Here, private enterprise has not
exactly flowered into free-market competition, but consumers are not
complaining. If the Elman Center's customers do have a problem, they
can always reach the center via one of the three private
telecommunications companies that began in Mogadishu as satellite
call services to connect Somalis with their estimated 1 million
friends and relatives abroad.
Aerolite-Astel, Barakat and Nation-Link now operate fixed-line and
cellular phone services in the capital and are expanding into the
rest of the country. The flat rate of $1.75 a minute on all
international calls - local fixed-line calls are free - is the lowest
The three companies are planning to set up a joint-venture Internet
service provider that would charge a monthly user fee of $10 - about
one-fifth the price in neighboring Kenya, where all Internet
connections depend on a government-operated backbone network.
Source: International Herald Tribune