A Land of Camel Milk and Honey

by Nicholas D. Kristof, The New York Times, February 27, 2007

HARGEISA, Somaliland(?) --

Here’s the ethos of Somalia, as a former Mogadishu resident explained it to me: “If I use a dollar to buy food, then tomorrow I have nothing. If I use a dollar to buy a bullet, then I can eat every day.”

That enterprising can-do spirit has turned most of Somalia into the poster child of a failed state, where you feel underdressed without an assault rifle. But wait! Here in the north of the carcass of Somalia is the breakaway would-be nation of Somaliland, and it is a remarkable success — for a country that doesn’t exist.

The U.S. and other governments don’t recognize Somaliland, so the people here get next to zero foreign aid. And when the “country” was formed in 1991, it had been mostly obliterated in a civil war and was a collection of ruins and land mines.

Yet the clans and elders here formed their own government, held free elections and even established an international airline. Relying on free markets and a general exhaustion with violence, the people of Somaliland embraced tranquillity and democracy and searched for ways to make a buck.

Walk down the streets of Hargeisa, the capital of Somaliland, and instead of gunmen you come across the thriving jewelry and financial market: scores of vendors, most of them women, are hawking millions of dollars worth of gold, precious stones and foreign currency out in the open air. (Don’t try that at home!) Continue down the street, and you see that Hargeisa has police cars, DHL service, cable television, orthodontists, a multitude of Internet cafes and traffic jams (including the horses and camels). There are public schools and hospitals — even a public library.

This is a conservative Muslim country, yet it is generally pro-American and tolerant. In the last election, more women voted than men. Women’s groups are fighting the traditional practice of genital mutilation, administered to 97 percent of girls here.

The lesson of Somaliland is simple: the most important single determinant of a poor country’s success is not how much aid it receives but how well it is run. If a country adheres to free markets and good political and economic governance, it will generate domestic and foreign investments that dwarf any amount of aid.

As President Dahir Rayale Kahin told me: “There is a proverb in our country: ‘You can wash your body only with your own hand.’ Outsiders can help, but the indigenous people must find a solution themselves.”

One lesson is that Western countries should not only increase their financial aid but also their pressure for better governance. It’s great to forgive debts, but not graft or antimarket policies.

The U.S. Millennium Challenge aid program, which promotes good governance, is a useful step in that direction. So is Tony Blair’s program to battle corruption in Africa.

One useful kind of Western aid is simply support for civil-society groups that battle corruption. Here in Somaliland, the press is generally free, but the president recently tossed three journalists in prison for reporting on corruption in his family. If Western countries speak out strongly in their defense, that effort may be worth a few million dollars in aid by reducing corruption in the future.

More peer pressure from within Africa would also help. Other African countries should stand up to a racist like Robert Mugabe of Zimbabwe with the same vigor they once used to stand up to white racist governments.

Another essential kind of foreign aid is supporting market-friendly economic policies, especially those that would nurture manufacturing industries.

In Mauritania, whose location in northwestern Africa would be ideal for exporting clothing to Europe and America, it takes 82 days to start a new business, which would then have to make 61 tax payments each year, requiring 696 hours to calculate and pay. And in the end, the tax would amount to 104.3 percent of the profit, according to the World Bank.

All that explains why you don’t have any shirts in your closet labeled “Made in Mauritania.”

So let’s be more generous with foreign aid, giving more than 22 cents per $100 of national income to development assistance (the average for rich countries is 47 cents). But those of us who call for aid and debt forgiveness also need to push just as hard for recipient nations to improve their governance, for ultimately the best way for poor countries to prosper is to adopt pro-growth policies.

And in the meantime, it’s time to recognize Somaliland as a nation. When a place does this well, we should hail it as a model, not shun it.