Anarchy and Capitalism in Africa of all places...

Wed Apr 7 13:43:18 PDT 2004

http://www.economist.com/World/africa/PrinterFriendly.cfm?Story_ID=2559183

(it requires a login... article pasted below)

I specially like the part about taxation and the difficulties of
implementing it...

 Somalia

Coke and al-Qaeda
Apr 1st 2004 | MOGADISHU
>From The Economist print edition

Reuters

Africa's most chaotic country is a bit calmer, but probably still home
to anti-western terrorists

Get article background

THERE are two ways to run a business in Somalia. You can pay off the
local warlord, not always the most trustworthy of chaps, and hope he
will stop his militiamen from murdering your staff. Or you can tell him
to get stuffed and hire your own militia. After 13 years of civil war,
businessmen are increasingly plumping for the latter option, and their
defiance has been rewarded. A veneer of normality is returning to the
world's most chaotic country. An economy, of sorts, is beginning to
thrive.

Somalia's first Coca-Cola bottling plant opened in the capital,
Mogadishu, last month. That its carbon dioxide chambers are encased in
mortar-proof reinforced concrete is almost beside the point. Somalis now
have the opportunity to rot their teeth like anyone else, and that feels
good. Countrywide distribution will be smoothed by the presence of
hundreds of experienced security guards, who are also responsible for
protecting the odd foreign expert who drops in. Newcomers are encouraged
to calm their nerves by firing off a few rounds or lobbing a
hand-grenade shortly after arrival. It really works, enthuses a visiting
Kenyan engineer.

Perversely, this renaissance has been made possible by Somalia's
continuing fragmentation. There is still no proper central government
but, where once there was only a handful of warlords, there are now at
least 24, and that is only the serious ones. With smaller fiefs to
pillage, few can now afford the $100,000 or more that it costs to wage a
six-hour battle, so such battles are less common. This is what passes
for peace in Somalia, and it is enough to tempt many homesick exiles to
return. They bring money as well as skills and contacts. In the past few
years, hospitals, schools, businesses and even a university have
appeared.

In some ways, anarchy makes doing business easier. There are no formal
taxesgiven how heavily-armed the average Somali is, these would be hard
to collectand no regulation whatsoever. But the costs of chaos outweigh
the benefits. You can roar through a warlord's road block unmolested if
you have ten gunmen in the back of your pickup, but you have to pay your
gunmen. Nationlink, one of the country's three mobile-phone operators,
employs 300 guards to protect 500 staff.

Everyone yearns for a restoration of stability and a proper government.
A dozen attempts at negotiating a formal peace have failed. But since
September 11th 2001, western governments, anxious to prevent al-Qaeda
from using Somalia as a base, have pressed the warlords to make peace.
On January 29th, after talks in Kenya, they were rewarded with a
power-sharing agreement providing for a 275-strong parliament that is
meant to represent all the country's main clans and minorities.

Somalis are sceptical, however. Under the accord, warlords will choose
the MPs, whose appointment will be confirmed by traditional elders. Who
will pick the elders? Many worry that the warlords will. Some even argue
that western support for the peace process encourages violence, by
rewarding thugs with a share of power. Businessmen and other non-violent
types have been excluded from the talks. We have built schools, repaired
hospitals and rebuilt roads. Yet no one is asking us what we think, says
Nationlink's managing director, Ahmed Abdi Dini.

Since the power-sharing agreement, the talks have stalled. Amid the
acrimony, consensus was reached on one issue: the warlords, many of them
barely literate, unanimously agreed to abolish a clause barring those
without a secondary education from parliament.

Meanwhile, a decade after its botched intervention to protect food-aid
deliveries in Somalia, the United States is back; this time, hunting for
terrorists. American intelligence officers are working with two warlords
to gather information about suspected al-Qaeda people in Somalia. Last
year, an American commando raid on a Mogadishu hospital netted a Yemeni
terrorist suspect, now in Guantanamo Bay.

Hussein Aideed, son of the warlord whom American troops tried but failed
spectacularly to capture in 1993, was apparently paid $500,000 for 41
Strela missiles to ensure they did not fall into bin Ladenite hands. It
is rumoured that other warlords have also been paid: enough, possibly,
to restock dwindling weapons supplies. Your correspondent saw some
impressive hardware, including four gleaming Howitzers, at the base of
one of the warlords, Mohamed Qanyare Afrah.

Short tempers, tall stories

President George Bush's war on terror has won him few friends in
Somalia. In 2001, America forced the closure of Somalia's biggest
remittance bank, on the ground that it was used to launder terrorist
funds, and froze the assets of al-Haramain, a Saudi charity with alleged
terrorist links. This may have made life harder for al-Qaeda, but it
also made it harder for expatriate Somalis to send money to their
relatives back home, and led, among other things, to the recent closure
of Somalia's biggest orphanage. Since America is offering Somalis
nothing by way of compensation, they are furious.

We must become terrorists, says Abdulkadir Ahmed, a militiaman who
claims to be training to fight America. With typical Somali bravado, he
adds that: Palestinians who do suicide bombings and just kill a few
people are stupid. If I had to sacrifice my life, I would take between
1,000 and 7,000 Americans with me.