International media outlets reported this March that rebel fighters in war-torn Somalia shot down a foreign military helicopter in the nation's largest city, dragging the bodies of dead soldiers through rotting streets with an air of jubilation. The scene evoked memories of the United Nations' earlier, failed intervention in the anarchic country, an intervention that resulted in the loss of 18 U.S. soldiers. Though many would conclude that little has changed in this lawless land between 1993 and now, an economic blossom has emerged from the national rubble with more peacemaking power than any military mission or unanimous resolution passed on the floor of the Security Council.
Few corners of the world evoke more images of despair than Africa, home of some of the most broken, poverty-stricken nations on the planet. Chief among those is Somalia, a country of more than 8 million people that has lacked a functioning central government for over a decade and is beset with one of the highest infant mortality rates in the region. But it wasn't always that way.
Freed from its European colonial overseers, the United Kingdom and Italy, in July 1960, Somalia had a promising start as a fledgling democracy. But a brief glimmer of fair elections and individual freedoms came to an end in 1969, when a military coup installed General Mohamed Siad Barre as president, in charge of a Soviet-style Marxist regime. Practicing what he described as "scientific socialism," Barre coerced a nation of nomads and herdsmen into the new direction of large-scale public projects. During the next two decades his regime nationalized industries, jailed thousands of dissidents, and stifled free speech. The human costs of his boldly statist objectives were egregiously high. As Amnesty International noted in a 1988 report, "Human rights have been persistently violated in Somalia ever since 1969 when the present government assumed power. The evidence reveals a consistent pattern of torture, lengthy and often arbitrary detention of suspected political opponents of the government and unfair trials."
As for the regime's effect on the economy, a good example was what happened to the telecommunications industry. What little telecommunications infrastructure was laid in Somalia during its colonial and democratic periods was quickly seized by Barre. The entire industry was reorganized under a single, state-owned monopoly, administered by the newly fashioned Ministry of Post and Telecommunications. It is estimated that the Ministry inherited a small telegram system and an overworked telephone network of roughly 7,000 land lines, almost all of which were in Mogadishu, the country's capital and home to more than a million people. By the end of Barre's rule in 1991, government bureaucrats managed to do little more than double the number of land lines, accomplishing this only through the expertise and resources of generous foreign powers. Following a "master plan" drafted by UN technocrats to modernize Somalia's telecom infrastructure, more than $60 million in projects were completed in the 1980s with an amalgam of loans, grants, and technical assistance from Japan, France, Italy, the Arab Development Fund, and the African Development Bank.
Even poor nations can embrace public policies that retain and augment a skilled workforce, create a consumer market, and encourage indigenous entrepreneurship and investment, thereby reducing the need for international handouts. But the practical experience of socialist systems throughout history has been that personal communication is perceived as a threat that must be placed under tight government control, so as to isolate and maintain power over people and markets, and promote the unfeasible goals of bureaucrats and the dictators they obey. Having eliminated incentives for private-sector investment and curbed the individual liberties of the populace, Somali officials had to depend on the goodwill of public leaders from more open, capitalist countries.
With no small businesses to speak of, and most citizens living on measly government wages, unable to afford the high rates of a phone call, the new-and-improved telecom network was a worthless edifice that served no one, a testament to the failures of state-controlled economies. Not surprisingly, the nation's phone network continued to decay even after additional upgrades. A newly installed President Barre proclaimed that Somalia had "broken the chain of a consumer economy based on imports" by breaking away from democracy, and that under socialism, the people would be "free to decide [their] destiny." The effects of his plan were evident. But after more than 20 years of dictatorship, the East Africans finally did take their future into their own hands.
Somali rebels, tired of Barre's costly military misadventures and human rights abuses, took up arms against the increasingly totalitarian government, overthrowing the dictator in 1991. A low-level civil conflict in Somalia has continued until today, replacing welfare statism with anarchy, as no aspiring faction has been strong enough to gain control of the entire country. It has been an unlovely and at times a horrifying spectacle. Because of the turmoil, however, state monopolies and public works have made way for a free-market economy and individual choice; and these, in turn, have buoyed the nation from complete collapse. In addition, they have fostered some innovative solutions to the problem of meeting human needs in the vast, arid land.
For telecom, the industry's rebirth had to begin at ground zero. During the revolution that ousted Barre, marauders stripped the nation clean of anything that could be sold, including phone lines and other communications equipment. But starting from scratch proved easier when bureaucrats weren't in the way to tax and regulate business, directing the flow of investment for political reasons.
As The Economist noted in 1999, phone networks "are at the heart of Somalia's survival and recovery." Phones allow Somalis to stay in touch with their friends abroad and facilitate business deals between roaming herdsmen and foreign meat markets. The millions of Somalis who live outside the country send up to an estimated $1 billion back to their homeland each year. Because Somalia is strategically located on the Horn of Africa, at the mouth of the Red Sea and between major African and Arab markets, some expatriates saw Somalia as a lucrative business opportunity when the Barre government was overthrown. With the financial and business support of foreign and domestic investors, a new wave of entrepreneurs returned home to set up shop, serve local needs, and build the country they always believed it was possible to create.
Today, after more than a decade of anarchy, five major Somali-owned telephone companies, about a dozen mobile companies, and at least three internet service providers serve markets in Somalia, offering a range of top-notch products and affordable service plans. In all, more than 100,000 land lines have been strung throughout the country, half a million cellular phone subscriptions have been sold, and 90,000 internet users access the Web in cafes across the country. Marketplace competition keeps prices low and value high for consumers. As the CIA World Factbook states, "telecommunications firms provide wireless services in most major cities and offer the lowest international call rates on the continent." Somalia has more robust telecom investment and adoption than many of its neighbors — according to 2004 figures from the World Bank, the nation bests stable neighbors Ethiopia and Eritrea with regard to the number of phone lines, mobile subscriptions, and internet users per thousand residents.
The reason for this astonishing success? No government.
In the absence of industry bureaucrats, there is no need to obtain an operating license or a franchise to provide service; supply is free to meet unbridled demand. There are no legacy rules or government-sanctioned monopolies that would make investment unprofitable, or label certain technologies or markets off-limits. Lacking government lawmakers to create pork projects, mismanage funds, and engender budgetary shortfalls, there are no industry taxes to nickel and dime companies to death, nor any user fees or surcharges on consumer bills. Lacking duties or customs officials, entrepreneurs can bring equipment cheaply through private airstrips and ports, without the long delays or additional business costs incurred in public facilities. As one telecom entrepreneur put it, "The collapse of Somalia has been good for business. In many ways it is much better off than before. Then we had state monopolies and bureaucracy and corruption, and all the wealth was in Mogadishu."
And so far, the Somali telecom industry has successfully kept itself in check, united by a common desire for growth and profits. In 1998, local service providers came together to form the Somali Telecom Association, a self-regulating body that collects sector data, facilitates communication and business relationships, and offers training and development in the war-torn nation. Three telephone companies combined to set up the Global Internet Company, to administer the deployment of common internet network infrastructure, and, according to its website, provide services to startups and venture capitalists, including graphic design, marketing, research, and business development. In November 2005, five major phone companies voluntarily came to an agreement and introduced interconnection services for customers, allowing them to speak to one another across the various private networks. Other companies have followed suit, penning similar agreements with their rivals.
Though anarchy has its benefits for some risk-takers, it also has its shortcomings. Instability and security concerns are persistent problems, as anyone with a gun on the streets can rob or kill, or hold businesses hostage in the marketplace. Yet, even in the absence of the rule of law, or even a local banking system, profit-making companies persist, and attempt to work out their problems. Banking needs are handled in nearby Dubai or the United Arab Emirates, where many of the larger telecom companies are headquartered, and financial transactions are completed in dollars or euros. Mobile phone subscriptions are prepaid, and some landline companies use calling cards. Contracts can be enforced through the traditional clan system, and security is maintained either by hiring private guards or by contracting protection services from local warlords. Militias and gunmen would be foolish to destroy cell towers or disable phone lines, unless they wanted to be left without phone service themselves. Risks are very high, costs are all incurred up front, and there aren't any insurance or special government bailout programs if the political turmoil gets worse and enterprises fail. But economic frontiers are tamed by the strong and the brave, people who are willing to take risks for the chance to reap rewards.
Some may argue that the basis for telecom investment and entrepreneurship didn't exist before the collapse of the Barre regime. To be sure, satellite technology has dropped in price in the last few years, and internet access and mobile phones didn't hit the mass consumer markets until the mid-1990s, after Barre's overthrow. Even before that time, however, a capitalist economy would have spurred the adoption of additional service providers and alternate technologies, such as coaxial cable, which has been used commercially to deliver voice and video services since the 1940s. Lawmakers always have the option of fostering marketplace competition, empowering companies and consumers to chart an organic path of economic growth and capital investment. Recently, the international community has sought to set in place a "new Somalia," but it's doubtful whether the plan serves the interests of Somalis. A UN-backed transitional federal government (TFG) was installed in Mogadishu in December 2006 after Ethiopian troops and TFG supporters wrested Islamic rebels from their regional strongholds. But Ethiopian troops, long reviled by Somalis recalling previous military engagements, have since taken up residence in Somalia, serving as foreign occupiers; and this has not gone over well, even with pro-government Somalis. The Islamic radicals and other antigovernment forces have gone underground, waging a guerrilla war in the streets of Mogadishu that has claimed hundreds of lives. This is the conflict that culminated in the bold attack on an Ethiopian helicopter that for many in America was all too reminiscent of "Black Hawk Down."
More troubling are the initial acts of the TFG, which has tasted the same cup of power from which President Barre once drank. Rather than take a fresh approach to providing security and fighting the radicals, TFG officials in early 2007 quickly called for everyday Somalis to surrender their arms to the state, and even shut down news media outlets they felt were "being biased" in their coverage of the conflict. Unfortunately for Somalis, these actions seem to come more from Barre's old policy playbook than the precepts of a democratic institution.
In the search for a lasting peace, heavy-handed foreign intervention and artificial, big-government solutions are poor choices for securing the loyalty of a tough, independent people that isn't likely to lay down arms and pay federal taxes so that Mogadishu can become an African Paris or San Francisco. Rather than continue efforts to impose foreign occupiers and a strong centralized government, leaders in the international community should put their energies into a bottom-up approach that recognizes local control, the importance of the basic rule of law, and the value of extending telecommunications across the nation.
A nation blanketed with information access and phone service can enjoy greater trade, greater growth, and stronger human relationships, both domestically and internationally. A vibrant communications backbone will encourage greater foreign direct investment and participation of expatriates in Somali society and the marketplace. In the absence of a strong central government, local police and courts, financed by local residents, can meet the needs of both businesses and the populace. If Somalis can feel secure in their own country, and tend to the needs of their families and their communities, they will be in a better position to consider the prospects of greater regional and national peacemaking efforts.
In the end, peace in this ravaged land may be nothing more than a phone call away, and pursuing that possibility may give Somalis a better chance at a lasting armistice than any bureaucrat or blue helmet could ever provide.
