Somalia calls for accelerated debt relief to fight terrorism

[Duufaan]

Will it be loan forgiveness for Somalia or not. It is very interesting article which reveals many facts.  Somali government should ask China for development money instead, than you will see IMF knocking your door. 4 billion dollar is nothing for country like Somalia with enormous resources.

 

https://www.ft.com/content/142e8e9a-f22c-11e7-ac08-07c3086a2625

 

 

[anoo kale]

Debt forgiveness is good but won't they just pile on the debts again just like the first time ?

 

We are dealing with unscrupulous kleptocratic Africans after all, not Japanese or Scandinavians.

 

 

 

 

 

 

[Holac]

I don't think the current government of Somalia is allowed to borrow money.

[Old_Observer]

Excellent idea, but maybe too early. If the country is not consolidated and have an administrative control its difficult to implement.

 

Ethiopia go debt relief to the tune of 11 billion USD. The way it was done was:

The government negotiated and compensated companies that were nationalized by Mengistu.

Russia forgave about 5 billion through the Paris club of lenders and Canada followed Russia and within a year every other country even US followed through begrudgingly and all lenders fell like domino.

Then the WB and IMF came with new loans and grants and the next cycle of debt accumulation started now up more than 30 billion already (but mostly on infrastructure, education and health). Ethiopia had one chartered university now has more than 30.

 

Debt relief can also have negative impact internally. Fight over the money can fracture the government, or create suspicion and instability. 

 

It may be great to prepare the plan on how to approach it, when time comes, but this time will be hard to find a country to start the ball rolling and internally there may not be good ground work done for it.

No one for sure knows how regions will demand or react to such conditions. Open and transparent agreement with regions may be a good way to prevent fighting and accusations of corruption that can be damaging to government now. 

[maakhiri1]

Somalia has a great potential , and 4 billion is nothing once we put the economic engine starts

[Duufaan]

Somalia needs to clear its' books and back to the international banking system. This is the first step. A number of western countries have several years ago promised to forgive some of the debt they owed African poor countries, including U.K. Sometimes the interest of the loan is higher than national budget and it continues growing. this is the case for Somalia now.  IMF program has not been successful around the world but Somalia has not a choice.