Somaliland: Political Economy and Policy Choices for Prosperity and Job Creation- WB Report


Somaliland ready for business

Somalilandsun- This report is the World Bank’s first effort to undertake an in-depth, consultative, evidence-based analysis of private and financial sector development in Somaliland* in at least a generation. The objective of the report is to take stock of what has been achieved to date since Somaliland passed its 1999 Constitution, provide an assessment of the current evolution of the private sector, and identify priority policy options and related actions that would best enable the private sector to generate the growth and jobs sought under the 2012-16 Somaliland National Development Plan (SNDP).
In its report titled Somaliland’s Private Sector at a Crossroads the key findings by the World Bank read
“Somaliland has already experienced two decades of major changes in its security situation, its political system, its economy, the regional environment, and technological changes.
In the process, Somaliland and its people have demonstrated impressive resilience and adaptability. The Somaliland of today bears very little resemblance to the Somaliland emerging from the war and dislocations of the early 1990s. Politically, Somaliland featured very significant innovation in the 1990s, from the Boroma peace conference to the passage of the Constitution in 1999, which transitioned the government from a clan-based form of representation to a multiparty system. Somaliland also demonstrated its political adeptness with the hybrid governance model it developed, which enshrined the role of customary authorities (clan elders) in the Upper House or Guurti.

New banking era in somaliland In a region with various forms of more authoritarian government, Somaliland remained committed to a liberal democratic model.
Despite the years of destruction brought on by the civil war, Somaliland has been the site of impressive levels of economic recovery due to: (a) the ability of the government and society to maintain peace and security; (b) a durable social contract ensuring a sufficient degree of inclusivity and negotiation in matters of politics, disputes, and allocation of resources and employment across clan lines; (c) high flows of remittances from the large Somaliland diaspora; (d) a robust private sector which has emerged since 1991; and (e) a powerful cultural tradition of honoring mutual obligations within extended lineage groups, which facilitates greater social trust, the flow of finances in the form of informal loans or gifts, and mutual indebtedness. The Somaliland economy is driven by the private sector. Unlike most other economies in the world, the government footprint is limited, amounting to under 10 percent of the gross domestic product (GDP).

Abdiqani of Dara Salaam bank makes an ATM transaction in Hargeisa SomalilamdThis context is both a structural advantage and constraint to its further growth and the capacity of the private sector to create the number of jobs demanded by a growing population, after a generation of hard work building a political system and economy from the remains of a destructive civil war. The report strives to take stock of the progress to date in private sector performance and development and to identify policy priorities that the government, in partnership with the private sector, can pursue in furtherance of job creation and growth objectives”
Read the full world bank report titled Somaliland’s PrivateSector at a Crossroads