Wassup in Somalia?

We all know from the news reports what a basket case Somalia is. Since 1991 it has had no central government and its different regions were either run by local warlords or else descended into chaos. In the last few years embryonic local administration has emerged in some provinces but for all intents and purposes Somalia is still officially a failed state. In view of  that I was surprised to came across the reports that the cellphone network in Somalia is functioning better than in most African countries:

http://news.bbc.co.uk/2/hi/africa/4020259.stm

It takes just three days for a landline to be installed – compared with waiting-lists of many years in neighbouring Kenya, where there is a stable, democratic government. And once installed, local calls are free for a monthly fee of just $10. International calls cost 50 US cents a minute, while surfing the web is charged at 50 US cents an hour – “the cheapest rate in Africa” according to the manager of one internet cafe.

How is it possible that a high-tech service industry can keep both clients and investors happy without a Commerce Commission, Consumer Rights legislation, courts in which disputes could be settled etc? How can people living in a stateless territory enjoy cheap and reliable mobile communication? Let us read on the BBC piece linked above:

But how do you establish a phone company in a country where there is no government? In some respects, it is actually easier. There is no need to get a licence and there is no state-run monopoly which prevents new competitors being established. And of course there is no-one to demand any taxes, which is one reason why prices are so low. (…) Despite the absence of law and order and a functional court system, bills are paid and contracts are enforced by relying on Somalia’s traditional clan system, Mr Abdullahi says.(…) Mr Abdullahi says the warlords realise that if they cause trouble for the phone companies, the phones will stop working again, which nobody wants. “We need good relations with all the faction leaders. We don’t interfere with them and they don’t interfere with us. They want political power and we leave them alone,” he says.

This was interesting enough to prompt me to do more research into what else functions well in a stateless Somalia. The results were even more surprising – it appears that Somalia may in fact be better off now then under the corrupt, oppressive government which fell in 1991:

http://www.peterleeson.com/better_off_stateless.pdf

In 1970, under the influence of the Soviet Union, Barre transformed his military dictatorship into a socialist one. Full-scale central planning pursued under the government’s policy of “scientific socialism” brutalized the Somali people. (…) The state was notoriously corrupt and violent. Political actors and bureaucrats embezzled state funds, extorted and murdered weak portions of the population, and engaged in aggressive asset stripping of state-owned firms. (…) In 1975 all land was nationalized along with nearly all major industries and the financial sector. This facilitated government’s ability to expropriate citizens’ property for state projects, like massive state-operated farms, and for politicos’ personal use. (…) State control of industry in Somalia created inefficiencies like in the Soviet Union.

That socialism destroys countries is hardly surprising but are Somalians really better off without ANY government? The linked report provides statistics which indicate that this indeed is the case:

The data depict a country with severe problems, but one which is clearly doing better under statelessness than it was under government. Of the 18 development indicators, 14 show unambiguous improvement under anarchy. Life expectancy is higher today than was in the last years of government’s existence; infant mortality has improved 24 percent; maternal mortality has fallen over 30 percent; infants with low birth weight has fallen more than 15 percentage points; access to health facilities has increased more than 25 percentage points; access to sanitation has risen eight percentage points; extreme poverty has plummeted nearly 20 percentage points; one year olds fully immunized for TB has grown nearly 20 percentage points, and for measles has increased ten; fatalities due to measles have dropped 30 percent; and the prevalence of TVs, radios, and telephones has jumped between 3 and 25 times.

The situation in Somalia reminds me of Ronald Reagan’s memorable statement:

Government is not the solution to our problem; government is the problem.

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