amal adil | Thursday, October 12, 2000 - 03:46 pm 'Republic' wants recognition on the world stage By Harvey Morris Published: August 14 2000 19:21GMT | Last Updated: August 14 2000 19:27GMT It could serve as a model for Africa: peaceful, stable, little crime, no debt, a liberal economic regime and, as of this month, a multi-party electoral system. The trouble is that the Republic of Somaliland does not officially exist. It isn't all good news in the republic. The former British Somaliland, which unilaterally declared its independence from the rest of Somalia in 1991, is largely dependent on aid and remittances from exiles. In a population of around 3.5m - more them half of them animal-herding nomads - infant mortality is high, with one in five children dying before the age of five. Medical care and education are minimal and life expectancy is 48. In addition, much of the economically active male population spend half their earnings on chewing ghat, a green leaf imported from Ethiopia that is rich in amphetamine and renders them economically inactive by about midday. Nevertheless the capital, Hargeisa, where goats graze among the ruins of the city centre, is undergoing an economic revival, fuelled by investments from rich Somalis overseas. That is one reason it does not want to be dragged back into the general Somalia maelstrom. "They want to put Humpty Dumpty together again," says a former diplomat. "But it can't work." Somaliland, whose independent status is not recognised by the rest of the world, now boasts five private airlines serving Somalia and the Gulf and five private telecoms companies. The latter offer mobile and internet services and instant dial-up access to anywhere in the world for a flat-rate $1 a minute - the cheapest in the region. This leap into the 21st century contrasts with Somaliland's almost Biblical inventory of exports from its main port at Berbera - live camels, goats and sheep, animal hides, frankincense and myrrh. Somaliland withdrew from the rest of Somalia after a 10-year war in which the forces of the late dictator Mohamed Siad Barre almost razed Hargeisa in pursuit of separatist rebels. Much of the city, which was heavily bombed in the war by South African mercenary pilots, is still in ruins. The population has been swelled to 350,000 by refugees returning from camps in neighbouring Ethiopia and rich Somalilanders have come home to begin constructing elegant villas on the outskirts of town. Even foreign businessmen are beginning to return. One Italian entrepreneur, in town to study the prospects of funding small and medium-sized businesses, says: "Now's the time to get in, before they get recognition. The risks are bigger, but so are the rewards." He is investigating the opportunities for exploiting Somaliland's granite and semi-precious minerals, while others are seeking to revive the rich fishing grounds of the Gulf of Aden, a waterway currently plagued by pirates. The only large foreign company to have shown an interest is France's Total oil company. Total spent $3.5m refurbishing the territory's oil storage facility at Berbera in exchange for a monopoly on oil supply and distribution. But Total officials complain they have to put up with the obstacles of non-recognition: they find it impossible to obtain insurance for their personnel and equipment and shipments into Berbera are covered by the high war insurance rates applicable to the rest of Somalia. Central bank governor Abdulrahman Dualeh Mohamoud complains that lack of international recognition also stifles the development of commercial banking in Somaliland, which has had its own currency - the shilling - since 1994. Most transfers of money are presently carried out by private foreign exchange dealers. Traders find it impossible to obtain letters of credit and the bank cannot have direct relations with the World Bank and the International Monetary Fund. The up-side is that, as no one will lend it money, Somaliland is unable to get into debt. "I run a tight money policy," says Mr Mohamoud. "If ministers send me vouchers for payment and the revenue isn't there to support them, I just send them back." In a bid to attract investment, Somaliland has a liberal investment law. Foreign companies are allowed to buy majority stakes in local enterprises and export their profits. President Mohamed Ibrahim Egal says the government is even prepared to review the investment law at the suggestion of potential investors. Mr Egal believes there is enough money available within the Somaliland diaspora in the US, UK, Sweden and elsewhere, to ensure the country's economic development. But recognition remains the main barrier. Hence his appeal to the UN. |