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[Dehai-WN] Pambazuka.org: Sudden interest in Somalia points to suspect Western corporate interests

From: Berhane Habtemariam <Berhane.Habtemariam_at_gmx.de_at_dehai.org>
Date: Tue, 27 Mar 2012 12:50:00 +0200

Sudden interest in Somalia points to suspect Western corporate interests

Rasna Warah

2012-03-26, Issue <http://www.pambazuka.org/en/issue/578> 578


Even if the London Conference on Somalia hosted by the UK government last
month may not have been yet another business opportunity for Western
governments and companies, the timing is certainly suspect.

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

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

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


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

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

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

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

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

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.


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

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.


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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Received on Tue Mar 27 2012 - 06:50:35 EDT
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