Energy Resources: Destabilization fears over Somalia's first oil deal

MOGADISHU, Somalia, (UPI) -- There are growing concerns that a groundbreaking oil exploration contract between the Western-backed transitional government of war-torn Somalia and a British-registered company could further destabilize the East African country.

East Africa is experiencing a major oil and natural gas boom that will transform the economies of a half dozen states on Africa's Indian Ocean coast, so the prospects of striking oil in Somalia are rated highly.
But, as U.N. investigators warned this year, the worry is that oil exploration across the shattered state, torn by clan wars and Islamist insurgency since 1991, risks "exacerbating clan divisions and therefore threaten peace and security."

"Oil companies should cease and desist negotiations with Somali authorities," the U.N. Monitoring Group cautioned the U.N. Security Council in July.

Soma Oil and Gas Exploration, headed by Lord Michael Howard, a former leader of Britain's ruling Conservative Party, signed Somalia's first deal with an international oil company, albeit an untested one, Aug. 6. The agreement gives Soma, formed in July, the right to apply for as many as 12 oil blocks in an area the Financial Times says oil majors consider "one of the final frontiers for the commodity."
Soma is expected shortly to launch a seismic survey of onshore and offshore locations.

The signing in Mogadishu, Somalia's war-scarred capital, took place as the country appears headed for a new round of violence, as the Islamist al-Shabaab organization, with links with al-Qaida, was showing signs of reviving a long-running insurgency after a series of military setbacks in 2011-2012.

It's not clear yet why the government of President Hassan Sheikh Mohamud, installed only a few months ago with Western and United Nations backing, went ahead with the exploration deal since it had earlier voiced fears that the country was too fragile to risk an oil race.

But the government, which many observers suspect will turn out to be as corrupt as previous Somali administrations since 2006, appears to have been persuaded to change tack.

Abdirizak Omar Mohamed, Somalia's minister for natural resources, told the Financial Times Lord Howard's status and high profile -- he was Britain's home secretary, or interior minister, in 1993-97 and leader of the Conservatives in 2003-05 -- had a lot to do with the Mogadishu government's switch.
Howard argued allowing oil exploration would increase stability by boosting state revenue for a government that's totally dependent on foreign handouts.

"We realized we had to take a different approach," Abdirizak said.

The British have been pushing for oil exploration for some time, along with Turkey, Norway, Qatar and others seeking to drill in Somalia and its waters in the Indian Ocean.

London has succeeded in edging out key competitors like Norway, while prospects in Somalia grew as major strikes have been made further south in the past few years -- mostly offshore, mainly off Mozambique and Tanzania -- in geological strata that appear to extend along the whole Indian Ocean coastline.

The Soma deal has made waves in the oil industry, which had expected a public licensing round for the oil blocks.

Some majors, like Anglo-Dutch Shell and France's Total -- which had signed up for blocks during the 1980s but never proceeded with them because Somalia collapsed into perpetual warfare following the ouster of dictator Mohammed Siad Barre in 1991 -- have put them on ice until "conditions allow."
Some oil has been found in the breakaway semi-autonomous regions of Somaliland and Puntland in northern Somalia. This has encouraged expectations that strikes can be made in other regions, and possibly in neighboring Ethiopia as well.

Somaliland and Puntland have largely escaped the violence that has torn Somalia apart, but the dozen or so oil companies drilling there have to be protected by militias or private forces.

In some cases, exploration blocks awarded by the two regions overlap, as with Norway's DNO and the Canadian-listed Africa Oil Corp.

"Potentially, it means that exploration and operations in these blocks, conducted by both DNO and Africa Oil under the protection of regional security forces, allied militia or private forces, could generate new conflict between Somaliland and Puntland," the U.N. report warned. "It is alarming that regional security forces and armed groups may clash to protect and further Western-backed oil companies' interests."

Source: upi.com

Somalia’s Fractures Getting Hard to Heal

By Ahmed Osman

Somalis rally in support of peace in the capital Mogadishu. The country is still divided over whether a federal system of government should be implemented. Credit: Ahmed Osman/IPS

MOGADISHU , Sep 6 2013 (IPS) - The system of government remains the biggest political obstacle in Somalia as key political players boycotted the government’s current national conference to discuss this country’s political future, according to Jaylani Mukhtar, a local academic based in capital Mogadishu.

“I think Somalis do agree much about their future. But the issue of federalism is what we will mark as the biggest political obstacle facing the country, and the current conference will have much to debate about it,” Mukhtar told IPS.

On Sep. 2, the Somali Federal Government’s five-day conference began with an agenda to discuss key issues, which include implementing federalism, reforming the constitution and conducting elections in 2016 when the government’s term of office ends.

But representatives from many of this Horn of Africa’s breakaway states did not attend. The northeastern semi-autonomous state of Puntland said it would not attend the conference and accused the Somali government of “tampering” with the national constitution. It is a claim denied by Somali parliament speaker Osman Jawari.

The breakaway republic of Somaliland, in the northwest of the country, also did not send official representation to the conference.

Mohamed Jama, one of the organisers of the conference, said the meeting was not meant to represent the regional states but had brought together “experts and the national intelligentsia” to chart a pathway for this country’s political future.

“This was never meant to be a conference where various groups, whether they be regional states or political factions, record their stances, but a platform for Somalia experts, intelligentsia and the general public to discuss and debate about the country’s future direction politically,” Jama told IPS.

He said after deliberation and discussion on the various issues, conference participants would present recommendations to the government.

But the exclusion of key players in the current debate is similar to the previous government’s handling of the issue of federalism, always a divisive subject in Somalia.

The issue of giving member states autonomy over regional affairs, but still holding them subject to the authority of the government, has been praised by some as a solution to the two decades of civil conflict here. Others say that such a political system could further escalate the conflict by encouraging clan-based mini states.

Somalia’s former and interim Transitional Federal Government, which ended its mandate in August 2012, had agreed with regional states and local factions in central and southern Somalia that the country would adopt a federal system of government.

But Mukhtar said that the agreement had been among political leaders, and the Somali people had not been given a chance to vote on it. He said that it was a constitutional issue that was yet to be endorsed by the people.

“The problem is that the issue was just a political agreement and not a constitutional one because such an arrangement and how we implement federalism will be decided by the people when given the chance to have their say,” Mukhtar said.

Ahmed Daahir, a political analyst from the northern Somalia town of Bossaso, in Puntland, said federalism in Somalia could be a way to bring the government to the people.

“We have been governed directly from Mogadishu for many years, since independence actually, and that has brought destruction and state collapse. So what the people are saying is let’s empower citizens by having federated states,” Daahir told IPS.

The most recent breakaway state here is the semi-autonomous state of Jubbaland in southern Somalia. In May, local militia known as Ras Kamboni declared the three southern border provinces of Lower Jubba, Middle Jubba and Gedo as the state of Jubbaland and elected their leader, Ahmed Mohamed Islam, better known as Sheikh Madobe, as president.

The leaders argued that the constitution gave them the right to form the state, but government officials said the new state was not inclusive of all clans in the provinces and this could lead to bloodshed.

After Ethiopian mediation, the Somali government struck a deal with the regional leaders to institute a two-year interim administration for the breakaway state.

The agreement was seen as test of the government’s leadership. But the practicality of federalism in Somalia was rejected by many of the clans in Jubbaland who were not represented in the peace talks. Many saw the agreement as the government giving the leadership of the regions to Ras Kamboni, thereby ignoring the rights of other clans in the area.

“The Addis Ababa Agreement has shown us that to some federalism means a mini-state for one’s clan within Somalia, even at the expense and exclusion of others,” Mukhtar said.

He said that other autonomous states have “organically grown” in Somalia, such as the breakaway republic of Somaliland, and the self-autonomous state of Puntland in the northeast. There are also the breakaway states of Galmudug, as well as the Himin and Heeb states in central Somalia. These states are also clan-based “in various degrees” from being pure single-clan entities to being quasi multi-clan states.

As the debate rages at the national conference over the future political make-up of the country, Daahir fears that it will further the deep distrust among Somalis.

“What we need in Somalia more than anything now is real and genuine reconciliation to heal the wounds of the past three decades then and only then can we have meaningful discussion about the future of this country,” he said.

Somaliland: How Do You Like Your Camel Meat?

The struggling nation of Somaliland is betting these beasts of burden will be on the menu far and wide.

Somaliland farmers sell their camels at the Hargeisa Camel Market, one of dozens of sites across the country where nomads, locals, and traders converge daily to buy and sell thousands of live animals Photo by Simon Maina/AFP/Getty Images

By Mark Hay

Each Friday, Roads & Kingdoms and Slate publish a new dispatch from around the globe. For more foreign correspondence mixed with food, war, travel, and photography, visit their online magazine or follow @roadskingdoms on Twitter.

HARGEISA, Somaliland—From early in the morning until midday, the streets of southern Hargeisa, Somaliland periodically shut down as hundreds of camels trundle along the narrow city streets. Taxi drivers give way, milling on the side of the road, wiping their cars clean of the dust and mud kicked up by the procession. Ultimately, the beasts file through the gates of the Hargeisa Camel Market.

No one really runs the market. It’s just one of dozens of sites across the country where nomads, locals, and traders converge daily to buy and sell thousands of live animals, some for the neighborhood butcher’s block, others for export. And to most folks in Hargeisa, it’s just a fact of life—a reflection that, despite the boom in the city’s population and the development of modern, multistory office buildings, Somaliland is still a largely pastoral economy.

But downtown, in the knot of government offices near the presidential palace, the ministers are eyeing this market with new ambitions. They have analyzed the country’s resources, crunched the numbers, and decided that these nomads may offer the safest and quickest passage for taking this fragile economy from relative poverty to a more thorough modernity.

Actually, it’s not as if Somaliland has many options. A self-declared but officially unrecognized nation, Somaliland is a little smaller than Idaho, with twice the population, but less than 5 percent of the annual budget. The de facto nation is rich in natural resources beyond livestock, but its infrastructure—potholed roads and no central electrical grid or water system to speak of—can’t get the goods to market. If that doesn’t deter intrepid investors, the place’s legacy of violence and piracy probably does.

With a paltry national budget—a finance ministry official estimated that it stands at $125 million—the government lacks the means to do much about it. What aid money they receive is mostly earmarked by donors for pet projects. There is no banking industry, and insurance companies are nonexistent. “There is no way on Earth a country can develop without financial institutions in place,” laments Sa’ad Ali Shire, the Minister of National Planning and Development . “You cannot have investment and you cannot move forward.”

The country may lack roads, cash, and skilled workers, but it does have one important source of manpower: nomads. It’s hard to say how many there are, as there’s been no census since the civil war in the early 1990s, but some estimate that up to 70 percent of Somaliland’s population is nomadic.

The modern nomad isn’t the lone ranger he once was, says Shire. “A hundred years ago, the nomad was self-sufficient. He was disconnected from the urban center. That has totally changed.  The rural household more or less consumes what the urban household consumes.”

The nomads have created trade routes and depots across terrain that cars can’t easily navigate, but camels can. The Hargeisa Camel Market is just one point in a nation-wide network of markets. Wandering among the flocks dotted across the sale grounds, I see a line of rams, roped together neck-to-neck, purchased at roughly $80 a head. (Camels can sell for anywhere from $300 to $1,000 per head, depending on their size.) An agent, a robust man in a cowboy hat who’s been culling the choicest animals from the nomads’ small herds for butchery or export, will come by later to haul them away.

But before the agent leaves, he must pass a dozy government official sitting by the gate. He will pay around $1 in tax per sheep or goat, and up to $5 per camel. If he takes the animals to the port of Berbera for export, he’ll pay another tax as well. It’s a minuscule fee compared to what he paid for the animals—and the profits he stands to make as the middle-man—but for a small government strapped for cash, it’s a good chunk of income. And the government, after running the numbers for its new National Development Plan, believes the nomads could become a much larger, more lucrative market.

Dhamac Barud, one of the most prosperous merchants in Hargeisa, looks for potential camels to buy. Photo by Simon Maina/AFP/Getty Images

“[Livestock] is a sector none of the other countries in the region have a focus on,” says Jamal Hassan, former CEO of Citi Bank in Tanzania, and the current presidential candidate for the Somaliland Justice and Welfare Party. “I think in the future … that’s a sector that can create a competitive advantage for Somaliland, that can create jobs that center on export.”

The export markets Hassan has in mind are the Persian Gulf cities like Dubai, Doha, and Abu Dhabi. But the potential for livestock goes beyond acting as the Red Sea’s Texas ranchland. There’s a growing, universal market for camels, the favored herd animal of Somaliland’s nomads.

Somalia houses more than 6 million camels, the largest population in the world. (Somalis have some 46 words for camels; nomads have composed and handed down hundreds of poems that extol the animal’s role in Somali culture.) Mainly beasts of burden, vehicles for war, and sources of milk, they also served until very recently as the only acceptable unit of payment for blood money in clan disputes. Yet Somalis typically do not raise more camels (or other livestock) than they need. The size of herds has rarely exceeded demand.

Where camels are concerned, it’s typically only been local demand that mattered. But, in recent years, the world has started to buy camels for their flesh rather than just their labor. Part of the growing market for camels is novelty. Although every neighborhood here has at least one café that serves up camel dishes, it is rarely eaten outside of Somaliland and is still considered a delicacy in other camel-rearing countries—reserved more for parties and special events than daily consumption. But it’s not just the sheer numbers of this luxury livestock in Somaliland that offers so much economic upside; perhaps camel’s greatest appeal lies in its health properties.

“Camel’s milk is medicine,” says Ibado Abdillahi Dababo, the elder woman and chief chef at the local camel restaurant I frequent in Hargeisa. “Drink it often,” her matter-of-fact matronly wisdom goes, “and you’ll stay healthy.” 

There’s truth to this local wives’ tale. Camel is high in protein but often less than half as fatty as beef. On the vitamin rundown, it’s particularly rich in vitamin E, while its milk has up to three times more vitamin C and 10 times more iron—and significantly less lactose—than cow’s milk.

Workers milk a camel on the outskirts of Somalia's capital Mogadishu. The United Nations Food and Agriculture Organization asserts that the global camel milk market may be worth $10 billion.

Photo by Feisal Omar / Reuters

And word is getting out. Meramist, a camel-rearing company in Queensland, Australia, had to increase its production by 20 percent in 2012, reacting to a spike in demand from European, American, and Japanese consumers. Somaliland would be well positioned to break into that market, if they solve a few lingering problems, chief among them how to prove to prospective buyers that they can make it taste good.

My camel-eating experience has been inconsistent, to put it gently. My first dish of boiled neck meat was tender and rich enough to pick off the bone by hand. The second and third times I ate camel neck, though, the meat was tough and flavorless. So I asked Dababo, the cook, to explain just how Somalis prepare camel. She invited me to watch.

Every morning, Dababo and her girls buy a camel from the local butcher. They prefer young and tender flesh (although still leaner and stringier than beef), but sometimes what they’re given is old and tough—and camels get exceptionally tough as they age. Regardless of the age, the recipe stays the same: Chop it up, throw it into a pot of boiling water over a metal drum filled with hot coals, and boil for 90 minutes with tomato, cabbage, onion, potato, salt, and pepper. In the last 15 minutes, she adds strips of the spongy, greasy hump to the pot—no, the hump isn’t filled with water, it’s mostly fat—and then dishes both out, unadorned, on a plate.

I ask Dababo if she’s ever thought about marinating the meat, tenderizing it, or leaving it hung out to age and soften. She glares at my stupidity. The only other thing they do to camel meat, as it turns out, is make it even tougher, drying it into shoe-leather jerky to make it last. The tastiest, most tender parts of the camel are its liver and kidneys, lightly fried in oil. (Warning: You don’t want your camel’s livers too rare; the undercooked organs have been linked to outbreaks of bubonic plague.)

Of course, there are ways to make camel meat tender. Professor Isam Kadim of Oman’s Sultan Qaboos University has built a career studying and developing techniques for tenderizing camel meat. But these methods involve butchering and processing the meat, which due to the country’s purely live-animal trade, Somaliland doesn’t have the infrastructure in place to handle.

Thus the government’s big plan: Make it possible for nomads—someday, even commercial ranchers—to keep larger herds and sell more meat at higher prices. The government’s developed one slaughterhouse in the city of Burco and instituted vaccination programs to keep herds healthy. It hopes to install slaughterhouses and cold storage units across the nation. Rendering the meat and selling it pre-packaged and cold, Shire suspects, could nearly double the gross revenue and open the nation to wider markets. If camels take off, and each camel yields between 550 and 1,400 pounds of meat, that’s a massive profit for nomad and government alike.

And officials plan to use the whole camel. They are also seeking, with the United Nations’ help, to train nomads in dairy production; the United Nations Food and Agriculture Organization asserts that the global camel milk market may be worth $10 billion. Add their training programs in artisanal craftwork using camels’ bones, and they will have monetized almost every aspect of these desert creatures. 

From afar, it seems like a lot to expect of nomads. Driving along the dried up riverbeds that serve as roads in the north of the country, though, you’re likely to get stuck behind a meandering train of wild camels. Sometimes the line of beasts seems to stretch forever. This is one resource the country has in droves, alongside a ready and able workforce. The markets are in place, the world is hungry; Somaliland’s future prosperity may just ride on the camel.

Source: slate.com/

Somaliland: Why it is not enough for a girl to be gifted in Somaliland

School is not a priority for girls in Somaliland

In Somaliland, quality of life often depends on access to primary education. For many girls, however, a life of housework and caregiving begins early. Samia was taken out of school to care for her family when her father fell ill. SOS Children gave her back her education.

From an early age, everyone could see that Samia was gifted

“I used to come top in all the exams,” she says. “My friends called me ‘the gifted girl.'” But when her father became ill with HIV/AIDS, her family lost its only source of income. Samia’s education was sacrificed so that she could stay home to run the household and care for her father. Her five brothers remained in school, because in Somaliland, boys’ education is the priority.

“I was getting ready for school as normal,” Samia recalls. “Then my mother told me I wouldn’t be going. Only my brothers could go to school.”

“When I dropped out of school, I felt so much pain,” says Samia

Her shame and sadness was so much, that she avoided her former classmates: “I didn’t want my friends to see me helpless at home. I was so lonely.”

A year later, Samia’s father died. Her mother was also diagnosed with HIV/AIDS. Infection is a huge source of stigma in Somaliland. The shame and risk of exclusion from society was so severe that Samia’s oldest brother ran away from home.

With her father gone and her mother sick, Samia needed help to keep food on the table. She knew that even if she somehow managed to feed her family, she would never be able to read or write fluently, or pursue the successful career she dreamt of.

Samia couldn’t achieve because she was a girl in a community where female discrimination was accepted as the norm

Two years after she left school, something changed. When SOS Children found out about Samia’s dire situation, we stepped in to provide the support the family needed to survive. We encouraged Samia’s brother to return, and provided a grant which enabled him to start up a business. Today, he runs a successful workshop and makes enough money to support the whole family.

And Samia was able to return to school.

Getting girls back in school

As part of a partnership with communities and other organisation, we are working to highlight the importance of education for all children in Somaliland. We are helping people understand the realities of HIV/AIDS so that families like Samia’s are not stigmatised through infection. Samia is just one of many girls who have been re-enrolled in school and given everything they need to flourish in education.

Today, many girls like Samia have what every child should take for granted.

Find out how you can help a girl like Samia...

Source: soschildrensvillages.org.uk

From Somalia via Sweden, With Skates

African Refugees Try to Warm Up to Bandy, a Cousin of Hockey

A group of Somali immigrants in Sweden struggled to learn to skate this summer so they could play bandy, a fast-paced ice-hockey-like game.

BORLÄNGE, Sweden—Sports fans whose heartstrings were tugged by the Jamaican bobsled team back in the 1980s may have a new underdog to pull for as a group of Somali men living in Sweden look to master the fast-paced and ice-cold game of bandy.

It is a form of larger-scale ice hockey popular in the Nordic countries and Russia that is played by 11-man teams on soccer-size ice fields, usually outdoors. Unlike hockey, bandy isn't a body-checking contact sport, but skaters move at furiously high speeds and the hard plastic ball used instead of a puck can whiz very fast past a player's face.

Team Somalia's coach, Per Fosshaug, a fiery Swedish bandy legend, once held the unofficial bandy record and was able to fire shots at more than 100 miles an hour into the top corners of the bandy goal.

The objectives of the game are the same as in ice hockey; the main differences are the larger surface, more players and a ball instead of a puck.

About two dozen young Somali hopefuls don't have a lot of time to master the game. Living in central Sweden, the players are hoping to be the first team from Africa to compete in the world championships.

"It's an amazing thing to get a chance to represent your country," said Najib Farhan, a 16-year-old Somali.

The 2014 World Bandy Championships are to start in late January in the Eastern Siberian city of Irkutsk, which boasts record low temperatures of 57.5 degrees below zero. Some bandy leagues abide by temperature rules that allow games to be called on account of cold, but in the World Championships, temperatures have to drop to at least 22 below before a postponement is even considered. It helps to dress in layers, with some Gore-Tex to protect players racing about at 30 mph from the wind.

Players on Team Somalia have no illusions about their chances. "We will probably lose by a hundred goals," said Mr. Farhan, after one of the team's first practices. "But we will do our best."

Mr. Fosshaug's attempt to quickly whip a team into shape is proving that the task isn't going to be easy. Most of his charges have never skated and some haven't been in Sweden for more than six months. At their first training in June in Sweden's picturesque Dalarna region, aspiring players struggled just to stay upright on roller blades, which were being used as training wheels to prepare them for ice skates.

As Mr. Fosshaug gave instructions to pupils about flexibility of limbs and the importance of using the gluteus maximus for leverage, his players were clinging to one another, trying not to fall.

In an impromptu 40-meter race, or about 44 yards, there were lots of flailing arms as beginners tried to maintain their balance. Almost half the field ended up on the ground, some having to crawl to make it past the finish line. As the Somali trainees strained to learn, Swedish children who shared the course were gliding around, completely at ease on their roller blades and bemused by their fell

The Somali bandy experiment originated when a business consultant named Patrik Andersson was out drinking with friends one night and talking about the challenge immigrants face in Sweden. Mr. Andersson's hometown of Borlänge has 40,000 people, and 3,000 of them are from Somalia, most of them refugees who fled war and poverty in their home country. Many of them interact very little with the Swedes. Unemployment is high among the Somalis.

Bandy fan Magnus Ståhl is a proxy for the local bandy fanaticism. He has the sports club badge of Edsbyns IF tattooed on his arm and says the game means "everything" to his village, population 4,000, 75 miles north of Borlänge.

The team has won nine Swedish titles and at the height of its success had average attendance of 2,000 at home games. But it is very uncommon to see immigrants play bandy, Mr. Ståhl said, and audiences are pretty homogeneous, reminiscent of Swedish life in the 1950s, before a half century of immigration diversified the nation of 9.6 million people.

Looking to shake up the sport's exclusivity, Mr. Andersson's group took the idea to the Federation of International Bandy, which is eager to bring the game to new nations. It needs broader participation if it is to someday secure a slot for bandy in the Olympics. The federation's secretary-general Bo Nyman said the idea seemed "a bit too fantastic" when it was first broached to him. But after several meetings, he became convinced it could work. He went to Montenegro in mid-July and got an official green light for the Somali effort at the Federation's Executive Committee annual meeting.

Bandy evangelists face a challenge, however, given the dominance of soccer here in Sweden.

"I've coached a youth team, and I've only had one player who was an immigrant," Mr. Ståhl said. And the player quit to play soccer. "He was good, but that was the first and only time I've seen an immigrant play bandy in Edsbyn."

He has seen some of the sport's international stragglers, though, and wasn't impressed. The Netherlands had a training camp in the area and played a game in Edsbyn, but the Dutch players were ill-equipped for the match.

"They didn't even have a full team. One of my colleagues, who used to play bandy, had to join them as a goalkeeper," Mr. Ståhl said.

Bandy is merciless. A team with superior skating skills can run roughshod over lesser opponents. The last time the U.S. national bandy team played at the top level of the World Championship, they were beaten 15-0 by Sweden and 19-3 by Russia.

Still, the Somali pioneers in Borlänge are enthusiastic.

Mohammed Ahmed, 17, who was one of a small Somali delegation that traveled to Stockholm earlier this year to watch the national final, was impressed by the atmosphere at the game. One of five Somalis in a crowd of nearly 40,000, the novice spectator found bandy to be a bit hard to follow. It takes a trained eye to be able to follow the small pink ball or anticipate the pace of play.

Hassan Osman, one of the leaders of the local Somali football club who is now learning bandy, said about all he could make out was "a lot of players moving in all different directions."

Mr. Ahmed, studying at an introduction program for immigrants, said that although the trip to Stockholm was a great experience, "it would have been even cooler if it were a soccer game."

Mr. Fosshaug, the coach, is approaching this project with a healthy dose of patience. "I don't have any expectations of them firing a shot into the top corner," he said. "But there are other top corners to aim for, whether in the labor market, in family life or in the community."

Write to Niclas Rolander at niclas.rolander@wsj.com

A version of this article appeared September 5, 2013, on page A1 in the U.S. edition of The Wall Street Journal, with the headline: From Somalia via Sweden, With Skates.

Barclays' Somalia Remittance Shutdown will Hurt Millions

A migrant from Somalia (Reuters)

By Gianluca Mezzofiore

Barclays Bank has been criticised by the UK's leading think tank on international development for its decision to close its 250 money-transfer businesses in Somalia.

The decision was described by the Overseas Development Institute (ODI) as "unwarranted, unnecessary and a threat" to people in need.

The ODI has said it is possible to maintain cash transfers to Somalia while monitoring them to avoid a diversion of funds. Its president Kevin Watkins cited new research showing that a transfer scheme worth £57m, set up in response to the 2011 famine, went through to help almost 1million people without falling into the wrong hands.

Barclays took the decision to cut its money service businesses (MSBs) from the end of September to avoid the risk of falling victim of money-laundering regulations and "unwittingly be facilitating [...] terrorist financing".

About £800m in remittances - a significant part of the country's GDP - is channelled to the country by the 1.5m Somalis living overseas thanks to the hawala, or small money-transfer businesses. An estimated £320m is sent to Somalia by the UK's Somali diaspora alone, which far exceeds international aid.

British MP Rushanara Ali, who campaigned to keep the money flowing, said banks "are scared of the impact if they fall foul of the regulators". The case often cited is the UK's HSBC bank that was fined £1.2bn for "blatant failure" to implement anti-money laundering controls.

Somali-born British athlete Mo Farah

However, Watkins said that the HSBC case "is a weak analogue for Barclays engagement in Somalia". The British bank, indeed, was charged with allowing £429bn in wired transfers from Mexico, of which at least £564m were associated with drug trafficking. But such activities "are hardly comparable to the operations of the hawala system and money transfer agencies," Watkins wrote in his letter to Antony Jenkins, group chief executive for Barclays Bank.

"There is a world of difference between providing aid banking services to drug barons in Mexico and delivering a service that pays for health, education, food, housing materials and small enterprises in Somalia," he wrote. "If aid agencies can find a way to operate efficiently in Somalia then surly it's not beyond the capability of Barclays."

The campaign against Barclays shutdown included Olympic gold winner Mo Farah, who came to the UK at the age of eight from war-torn Mogadishu. The runner urged his 800,000-plus Twitter followers to support "vital" money flows to families in Somalia.

"It is so important that the government and the banks realise the incredibly serious threat this poses, and work with the remittance industry to find a solution," he told the BBC.

"Millions of Somalis as well as people across the developing world depend on it."
Dahabshiil, the largest money transfer business providing services to Somalia, has said Barclays' decision could see money transfers pushed into the hands of "unregulated and illegal providers".

International Investigative Team Clears Somalia of UN Report Allegations

By Government of Somalia

 
MOGADISHU, Somalia, Sept. 6, 2013 — /PRNewswire/ -- After a thorough investigation, a top international forensic accounting and legal team released a report today clearing the Somali government of corruption alleged by the United Nations Monitoring Group on Somalia and Eritrea.

Responding to the July 12, 2013, Monitoring Group Report—specifically Annex 5.2 —forensic accountants from FTI Consulting, Inc., and a legal team from the US firm Shulman, Rogers, Gandal, Pordy & Ecker, P.A., found that the methodology and conclusions reflected in Annex 5.2 were "deeply flawed and entirely unreliable." Moreover, many of the allegations predate President Hassan Sheikh Mohamud's administration.

President Mohamud welcomed the report's conclusions while acknowledging that Somalia is still developing a sound financial architecture after two decades of war.

"As President, it was my responsibility to take seriously the allegations and to direct a thorough assessment of them," he said. "I am pleased that the investigative team concluded that these allegations were unfounded.

"The international community can be assured that, although there is much yet to be done, Somalia has made considerable progress toward establishing and maintaining the sound fiscal practices appropriate to a modern state."

The forensic accounting and legal investigators followed the United Nations' own published fact-finding guidelines and adhered to international norms and professional forensic practices for discovery, investigation and interviews.

The report includes a number of recommendations. For Somalia, the investigators suggest a series of steps to upgrade internal controls and financial reporting systems and to further strengthen the public financial management systems. For the UN Security Council, the report outlines steps to revise the July 13 Monitoring Group Report — including the excising of Annex 5.2 — and to put controls into place for the supervision of monitoring groups.

President Mohamud has accepted and endorsed the investigative team's report and recommendations.
"Somalia has come a long way after two decades of conflict," he said. "There is still work to be done, and my administration will do everything it can to continue to move forward and eradicate corruption. I encourage the international community — especially the United Nations — to continue to engage with us in a positive, productive way."

The full report can be found here.

MEDIA CONTACT: Abdurahman Omar Osman Spokesman, Government of Somalia media@presidency.gov.so +2525941000

NMCB 11 Seabees bring joy to homeless Djiboutian children

 

Courtesy Photo

Seventeen Seabees assigned to Naval Mobile
Construction Battalion (NMCB) 11 pose for a

photo while participating in a Community

Relations (COMREL) activity at Caritas, a
homeless children’s shelter in the African
country of Djibouti as part of the Combined
Joint Task Force (CJTF) – Horn of Africa (HOA)
Friends of Africa organization. NMCB-11 is a
Seabee battalion specializing in contingency
construction, disaster response, and humanita-
rian assistance. The Battalion is home-ported
in Gulfport, Miss. NMCB-11's Det. HOA is a CJTF-
HOA unit whose mission includes stabilizing and
strengthening security in East Africa through
military-to-military engagements with partner
nations. (Courtesy photo / Released)

CAMP LEMONNIER, Djibouti - Seventeen Seabees assigned to Naval Mobile Construction Battalion (NMCB) 11 visited Caritas, a homeless children’s shelter in the African country of Djibouti, on Saturday, Aug. 31, 2013 as part of the Combined Joint Task Force (CJTF) – Horn of Africa (HOA) Friends of Africa organization.

Lt. Brian Myers, NMCB-11’s Command Chaplain, Religious Program Specialist Seaman Jamar Pegues, and Equipment Operator 3rd Class Andrew Vaughn organized the Community Relations (COMREL) activity.

“It was an eye opener to see how other people are living,” said Pegues. “They don’t have the same resources as us. I think a lot of us were touched by how welcoming the kids were.”

“It was very humbling to see the gracious attitude of the kids,” said Hospital Corpsman 3rd Class Andrew Campbell. “They shared everything they had, and loved having us play soccer and sharing our culture.”

Founded in 2003, Caritas is sponsored by the local Djibouti Catholic Church and provides warm meals, medical care, clean water, and education to refugee and homeless children of Djibouti and nearby countries, Ethiopia and Somalia. Caritas is one of the few places local refugee kids can find rest, learn how to read, work on trade skills, and receive medical care with help from volunteer nurses.

The Naval Construction Force is a vital component of the U.S. Maritime Strategy. They provide deployable battalions capable of providing contingency construction, disaster preparation and recovery support, humanitarian assistance, and combat operations support.

With its home-port in Gulfport, Miss., NMCB-11 is a Seabee battalion currently deployed to multiple locations in support of AFRICOM, EUCOM, CENTCOM, and PACOM.

NMCB-11's Det. HOA is a CJTF-HOA unit whose mission includes stabilizing and strengthening security in East Africa through military-to-military engagements with partner nations.