Economic adjustment in conflict-affected and fragile states in Africa: Lessons from Somalia
Fragile states in Africa, like Somalia, are grappling with tensions and tradeoffs between development imperatives and stabilization objectives, the need for economic stimulus and debt sustainability, and global financial stewardship and transparency. At the same time such countries need to focus on strengthening local public and private sector capacity. Indeed, the two countries are confronting extraordinary development challenges, including with respect to development finance. For more than a decade, the international community has stepped up efforts to engage more effectively with fragile states whose economic performance is impaired by limited administrative capacity, persistent social tensions, ongoing conflict, and political instability.
The International Monetary Fund and World Bank are engaged in some form in almost all fragile states to improve economic management and performance, reduce poverty, and improve governance. Development assistance is inherently risky in these environments, where weak policies and institutions correlate with a lower probability of successful outcomes. Despite the risks, there is a strong rationale for engagement as the impact of well-designed and supervised aid-financed programs can potentially be very high.
On October 17, the Brookings Africa Growth Initiative and the Brookings Doha Center hosted Finance Minister Abdirahman Duale Beileh of Somalia for a conversation on these and related issues.
Brahima Sangafowa Coulibaly
Vice President and Director - Global Economy and Development
Senior Fellow - Global Economy and Development
Raj M. Desai
Nonresident Senior Fellow - Global Economy and Development, Center for Sustainable Development
Abdirahman Duale Beileh
Minister of Finance - The Federal Government of Somalia
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[The clashes between institutions in Pakistan is expected to escalate, with judiciary, politics and constitutional crises becoming immersed with the financial breakdown.] I see the crisis as one that is deepening, and it is very difficult to see a way out. All Pakistan's institutions are muddied — the military, the legislature and civilian government, the judiciary. The military and judicial branches are both completely politicized and polarizing; they don't have the trust of the people, and they can't pull Pakistan out of the current crisis. [The current government is taking tough financial measures in a bid to revive an IMF bailout.] The state is playing a heavy hand with the opposition. In the meantime, while these institutions play their political games, the common man is dealing with backbreaking inflation, 46% [on an annual level] last week. The only way out is elections, which are to be held sometime this year; and these elections must be free and fair, without sidelining the current opposition.