Somalia 2025 Vision - A must achieve goals

[NGONGE]

^^ Finance is the least of your problems. Everyone borrows.

 

But the rest still stands.

[Tillamook]

Nuune, while your intentions are noble I believe a centrally planned economy would be disastrous for Somalia. Unlike many other countries, Somalia has a great opportunity to get things right from the get go once some modicum of lasting peace and security is established throughout the country.

 

The last thing we want is a big government that will pick winners and losers in the economy of the nation. I believe such government involvement will stifle economic competition and promote favoritism. But a free market economy on the other hand will free the people and thereby unleash innovation and generate prosperity for all.

 

I believe, if there is a demand for any of those development projects outlined in your Vision, some enterprising fellow will rise to the task and provide it for the public--- and in return become filthy rich.

 

So the only thing the government should involve itself in is to ensure justice for all and equality in front of the law...the rest am sure the Somali people can do for themselves way more effectively and efficiently.

[Abu-Salman]

Finances is not an issue as far as equality and sustainability are the goals and besides post-conflict growths are usually high, so is the regional growth (5-10% is thus very realistic if we get stability) ; the expected domestic revenues are thus amply sufficient for basic services much of it locally managed; here are potential revenues sources (as well as measures preventing hoarding and speculation):

 

 

• Public or state land ownership; residential land tenure rationed, speculation criminalised, smallholders only entitled to rent land for farming (no ecologically destructive intensive large scale farming or massive tracts of land owned by a firm)
• National ownership of strategic industries: utilities, rail, etc; alternatively, partial nationalisation to be considered
• Taxation for a dirigist or planned industrial policy: exemptions for critical services and industries; non priorities sectors investments to be discouraged (labor intensive processes and small scale traders to be protected)
• Taxation to be gradually raised from 15 to 30% of output over the medium term; Licensing for industries such as Telecom (it was said modest Telecoms taxation alone could raise $500 millions, not to mention the now booming livestock exports etc).
• Extra taxation on non-essential items and even more for higher classes consumption (non essential are classified as "luxuries" for taxes purposes in Djibouti); special taxes on junk food, polluting items
• Infrastructure repair and upgrade to cost roughly $3 billions over a decade if based on African average, superficy etc, already underway to some extent and could be modular as per financing (port leasing as Djibouti-Dubai or now under discussion Dubai-Berbera, PPP and other forms of private sector involvements are options).

  Re-building, ongoing too, and social housing for the most vulnerable may double that amount.

• Total public spending raised from app. $50 to $500 per capita, through successive stages over the medium term; modest targets which make most sense if almost all state expenditure is redirected towards services for the masses and administrative costs minimised, while efficiency is maximised.

 

Those are my basic overall hopes anyway as an humble layman not expert; we are indeed already witnessing significant advances in Somaliland, Puntland etc in both revenues or services areas.

Our experts like dear brother Thierry will hopefully one day manage our resources at the national level witout sacrificing equality or our ecology (most efficient nations try it through strong state involvement and regulations in the economy, so should we).

[OdaySomali]

Tillamook;921516 wrote:

Nuune

, while your intentions are noble I believe a centrally planned economy would be disastrous for Somalia. Unlike many other countries, Somalia has a great opportunity to get things right from the get go once some modicum of lasting peace and security is established throughout the country.

 

The last thing we want is a big government that will pick winners and losers in the economy of the nation.

I believe such government involvement will stifle economic competition and promote favoritism. But a free market economy on the other hand will free the people and thereby unleash innovation and generate prosperity for all.

 

I believe, if there is a demand for any of those development projects outlined in your Vision, some enterprising fellow will rise to the task and provide it for the public--- and in return become filthy rich.

 

So the only thing the government should involve itself in is to ensure justice for all and equality in front of the law...the rest am sure the Somali people can do for themselves way more effectively and efficiently.

I think that active government involvement and strategic planning is crucial to achieve substantial, equitable and sustainable economic development in any country. You have to remember that the purpose of privately owned profit-seeking entities are to achieve private objectives, which often revolve around the enrichment of its owners and no other purpose. Such entities do not, per se, seek or intend to achieve good quality products/services, affordable prices, good quality jobs, sustainable operations/minimal impact on the environment, long term investment, innovation or the furtherance of the public interest/danta guud.

 

In principle I do agree that we have learnt from our recent history that the private sector has worked well in many areas - even when a stable macro-economic and political environment has been lacking and there has been no legal framework to speak of. The evidence shows that there the market has capacity to efficiently and sustainably fulfil needs for a number of services and products and to do so at affordable prices. There are clear benefits of enabling willing investors - small and large - to reap a profit by offering products and services to others whilst creating jobs by the same action. In Somalia, the evidence of the market doing its job is evident in the construction, telecommunications, retail and services sectors.

 

Having said that, the current Somali economy is not underpinned by stable fundamentals and there are significant imbalances in the economy of the country. Government has a clear role to play and unique capacity to correct those imbalances in the economy. The state has a unique role and capacity to correct structural inefficiencies and negative market externalities and in having a mixed economy we shouldn't leave the government without teeth to act and intervene where it is required. Only the state can by exercising its political, financial and legal hegemony, successfully address the following constraints to economic development and ensure that substantial, equitable, balanced and sustainable economic growth is achieved.

 

1. The country is experiencing an immense and unsustainable balance of trade deficit as most of the consumer spending that is fuelling the growth in many sectors of the economy is funded by remittances from the diaspora. These remittances are spent almost exclusively on imports and very few goods are produced within the country, which means that the economy is drained of billions of dollars each year and 100's of thousands of potential jobs are lost to the countries from which we import goods that we could easily produce ourselves. If the profit-seeking privately owned companies can cheaply source goods from other countries and sell them at a profit in the domestic market, they have no incentive to encourage or invest in domestic production, especially if relatively high up-front investment is required. The government can play a role to encourage and facilitate such investment.

 

2. You mentioned competition? Market failure and negative externalities (examples: monopolies, cartels, price-fixing) are ubiquitous and evident across all sectors of the economy and yet remain uncorrected and consumers are, on the whole, getting a very bad deal. For example, a small number of privately owned entities control the export-import activities of Somalia and control the prices of basic foodstuffs and consumer goods, which are set at extortionate levels. Although this is good for their personal-enrichment objective, this is at the cost of the wider populace who cannot gain access to basic goods and service. Another example is the telecommunications companies whose services are not interconnected. So this means that if you want to make calls to others with sim cards from other operators, you will need 3, 4 or 5 different sim cards. The reality is that an unregulated private sector will result in monopolies, cartels, price fixing and on the whole a bad deal for consumers and government can play a role to discourage such activities.

 

3. Market actors have shown that they are not able or willing to self-regulate or to standardise their products and services. Consumer and worker rights are non-existent. Contracts are unenforceable. Pollution is damaging the environment and the people. Substandard products which will falter in a matter of days after purchase are ubiquitous etc. Again government has a role to play.

 

4. Fourthly, there are certain sectors of the economy with immense potential and demand, where the market has been unable or unwilling to provide the services/products that are sorely needed because those services/products are difficult to price or to fund or otherwise not viable to provide. Examples are the education, health, infrastructure and energy sectors, which are clearly strategically important sectors. Depending on whether these sectors are given the due attention and investment they require, they can be either a catalyst for, or constraint to economic growth. So far in Somalia's history and especially in the last 20 years or so, these sectors have presented an immense obstacle to economic growth. Government has a role to play to encourage and facilitate investment in these sectors and even fund investment into sectors with high barriers to entry e.g. energy, infrastructure. This is where strategic planning by government comes in.

 

5. Whereas profit-seeking privately owned entities have no reason to work for the common interests of the community and often work in silos, the government has a unique incentive, capacity and role to provide strategic leadership to co-ordinate the actions of individual organisations, companies or sectors of the economy to achieve the maximum economic growth possible. This is where strategic planning by government comes in.

[OdaySomali]

A very interesting read about future sustainable economic growth and consumpion as an engine of growth.

 

http://www.sd-commission.org.uk/data/files/publications/pwg_summary_eng.pdf

 

Here is an excerpt:

 

This report sets out a critical examination of the relationship between prosperity and growth. It acknowledges at the outset that poorer nations stand in urgent need of economic development.

 

But it also questions whether ever-rising incomes for the already-rich are an appropriate goal for policy in a world constrained by ecological limits.

 

Its aim is not just to analyse the dynamics of an emerging ecological crisis that is likely to dwarf the existing economic crisis. But also to put forward coherent policy proposals (Box 1) that will facilitate the transition to a sustain able economy. In short, this report challenges the assumption of continued economic expansion in rich countries and asks: is it possible to achieve prosperity without growth?