- Somaliland is not even recognised internationally as a ‘real’ place, let alone being a country. However, has it already moved ahead of economic giants such as USA and China, with regards to how people carry out their day to day transactions?
Somaliland is an unrecognised, self-declared state that is acknowledged as an autonomous region of Somalia. Due to certain massacres that led up to the 1991 Somali Civil War, the state has since made itself independent from the rest of Somalia. The destruction of economic and military infrastructure left the state in tatters and felt that independence was its best option. The state is now governed by an administration as the Republic of Somaliland.
The currency in Somaliland is the Somaliland shilling; although it is very much stable and not even slightly close to going into any kind of recession, it is not recognised as an official currency and thus, there is no exchange rate offered for it. As a result, and due to the fact that the government relies mostly on tax receipts and remittances from the large numbers of Somali diaspora, international aid is very difficult to come by. Furthermore, it also follows that growth of the state, economically speaking, is very much limited.
However, despite all of these restricting factors, the country’s current system for sales is quite phenomenal. Not by means of its complexity but the fact that this state, which is in a very difficult political situation, has managed to leapfrog more commonly used systems which are being deployed in the majority of countries worldwide. In Somaliland, a majority of transactions carried out by its citizens are done through a simple mobile service. Most shops will have a six figure code written on the front of it and customers will come and pay for their goods using this code. An idea so simple that, despite its obvious issues, works incredibly well.
The country’s economy is stable but far from robust, to have this kind of infrastructure available to these people is an amazing thought, especially since the area is much like how one would describe a third world country. Nevertheless, the country has this system deployed and functioning well which indicates high hopes for the state. Unlike most other areas in the world which are in a similar position to Somaliland, this state has shown that it is not going to follow the herd but try something else and full credit goes to them.
The obvious issues with this kind of system include the fact that people are now totally dependent on their mobiles. It is not only their main access to spending money but it is also dependent on the phone not suffering any technological problems which anyone in the UK will tell you is an infuriatingly common problem among phones. On the other hand, the phones associated with the people of Somaliland are not ones with the ability to do Wi-Fi tethering or anything of the sorts but are about as simplistic as it can get. As consequence, the phone suffers fewer problems and people are able to be more reliant on the phone working.
The state is also very much in what we would see as stage two of the DTM (Demographic Transition Model) so the people are still in their own ‘tribal’ groups. People work together in order for this system to work effectively. Again, this would be an agenda in a more developed country but not here. This is because there is a huge trust upon fellow citizens to help each other and the benefits could be great for the nation.
To conclude, the sheer thought of a state as minute and futile as Somaliland being able to innovate and successfully implement a system of this kind is beyond belief. The fact that governing administration has been able to do so is incredible and much of this is down to the co-operation of the citizens. Despite all their problems, the state has done their business and is sure to collect its rewards in the not too distant future.
Contributed by Jordan Naidu