Somalia's new government lifts business hopes

09 Sep 2004 08:40:24 GMT

By Finbarr O'Reilly

NAIROBI, Sept 9 (Reuters) - Businessman Sharif Ahmed hopes Mogadishu's men with guns can soon be replaced by men in suits and that the city's machinegun mounted pick-up trucks will yield to cargo vans filled with goods bound for market.

His hopes hinge on the creation of a Somali parliament, formed in Nairobi, Kenya last month after marathon peace talks to end 13 years of clan warfare in the world's only country without a central government.

The parliament, sitting in Kenya due to insecurity at home, is expected to elect a president on Sept. 22 and return within weeks to Mogadishu, the capital of about one million people, roamed by an estimated 60,000 heavily armed gunmen.

"If the new government can succeed in bringing peace with them it will be a huge boost to business in the country," said Ahmed, chairman of the Dubai-based Somali Business Council.

Peace will be slow to take root in Somalia, which has no formal system of justice and where frequent clan disputes are often settled by the bullet.

Fighting between rival clans since the overthrow of military ruler Mohammed Siad Barre in 1991 has carved the Horn of Africa country into fiefdoms ruled by quarrelling warlords.

Clashes and war-induced famine have killed hundreds of thousands of people and Mogadishu's streets are littered with rubble and walled by shattered, bullet-ridden buildings.

Somalia is so damaged that it is largely absent from U.N. development rankings. The returning government has yet to find offices.

FLOURISHING IN CHAOS

In the power vacuum since 1991, the private sector has propped up the country's wounded economy, with some businesses flourishing despite the chaos.

Scores of telecommunications operators link Somalia to the outside world and the lack of any official banking system opened a huge market for companies transferring money between Somalis and their relatives abroad.

Somalia's business leaders agreed at a meeting in Nairobi last week to open a Chamber of Commerce and Industry, which founders said could be launched within weeks to help the new government rebuild and secure the country.

Nervous that the new government may embark on a nationalisation campaign that would crush private enterprise, business leaders will instead push for a free-market economy.

"The new government must implement free-market policies and not go back to owning hotels, bus companies, farms and so on," said Abdi Mohamed Sabrie, a director at NationLink, a leading Somali telecommunications company.

"We need to put businesses into Somali hands, allow joint ventures and even foreign investors," added Sabrie, who is on the committee to create the Chamber of Commerce.

Ahmed is already a major shareholder in a Coca Cola bottling plant that opened in Mogadishu in July, giving residents hope that the return of the world's largest soft drink company after a 15-year absence was a sign of a gradual return to normality.

Security however, remains the biggest issue for the fledgling government, ordinary citizens and businesses that currently pay for swarms of armed guards and escorts.

"Right now, our biggest expense is paying for security, so if the government can provide that, everyone will happily pay taxes," Ahmed told Reuters by phone from France on Thursday, adding that while clan divisions linger, they could be overcome.

"Ten years ago, everybody was fighting, but now most people want peace and it's only a small group serving their own interests who do not want peace," he said, while still acknowledging the potential threat to progress.

"If the government does not end the fighting, this whole thing will be back to zero," he warned.