mohamed cheers says:

Sounds good to me. Who's drafting the new Banking law and how soon will that take the Legislators
pass the same.
Cheers.

Bedria says:

Somaliland is the light in the Somali soul! Lets protect and shield it from harm!

Also lets be very careful, especially with foreign banking systems. We can see how good they have been in their own nations (2008 US bailout, Europes Current Issues). Its time perhaps we decide for ourselves what sort of economic system is better for us. Even if that means we create something completely new. After all our goverment set up is one that is benefiting us because it takes into account our clan diversity. Lets find a way to engage the worlds markets while at the same time finding a way to insulate ourselves to whatever degree from their harmful effects. Better regulation is a start, speaking from an American perspective.

I would like to hear the thoughts of Somalilanders especially those with formal economic education, please help in pointing us in the right direction brothers and sisters. Discussion is welcomed!

warya says:

Dear Bedria,

You are correct in your assumptions in regards to financial regulations; however, I would like to add that in the case of the US it had more to do with removing existing regulations and enforcing existing ones than the actual CREATION of new regulations. For example, Canada is both the US's regional neighbour and biggest trading partner with more 80% of its exports going to the US. And yet they have managed to keep their financial and real estate market cushioned from much of the impacts of the global economic chaos.

So how did this happen? The answer is straight forward.

The Canadian banking ensured it's lending restrictions remained in place. This means that only those who can afford a mortgage are allowed to sign up for one. In the US, on the other hand, the government passed a bill in early 2000 (can't remember the exact date) that simply made anyone eligible for a mortgage in the US. So in some cases, it was not uncommon to hear of teenagers, with no credit history, being approved for ridiculous home mortgages. The other big problem that occurred was that these banks who approved these mortgages would then combine these large IOU's, repackage them and then dump them on the stock market. This way they were passing they were 1) enjoying the short-lived honey moon and then 2) handing off the time bomb to some unsuspecting fool.

These larger financial institutions bought these useless "financial instrument" (fancy word for stack of IOUs), gave them exotic names, made false claims about how great of an investment they were and then sold them amongst themselves as well as the world. The whole game these people were playing was buy these IOUs, talk them up so as to artificially increase their demand market (increase in stock price) and then sell them off. At no point in time did any of these traders believe that these IOUs were a good investment for themselves or to hold on to. For them it was a fad and they just wanted to cash in quickly before passing the hot potato to some other fool to hold. Unfortunately, however, in this sick game, the US managed to sell these $500 billion plus bombs to many financial institutions abroad; which meant that the whole world would be collectively punished for their greed.

I would say no one particular group can be blamed for the entire ordeal, but rather the blame should be divided amongst various groups and institutions. For example, the line between the government, whose job is to represent the interests of its people, should never be compromised to satisfy the demands of a few old business buddies. In the US, the guys making the legal decisions and the guys killing the economy are friends or ex-associates. If we were to draw parallels between what's happening in US's financial market and Somalia, I would say the Puntland president's relationship with the pirates would be a perfect example. He is constantly talking about the dangers of piracy and the need for the development of a anti-piracy force, but he also happens to be a key beneficiary of these large ransoms according to the UN report.

I am no politician, but as far as I am concerned those who run for public office should understand and respect that their role and objectives are completely different than those of CEOs and business owners. The first groups responsibility is to ensure the well being of their citizens and society is served. The latter's primary concern is and always will be the maximization of wealth for their shareholders. Oil & Water!

My 2 shillings and my apologizes if I have blabbed on!

Abraham says:

@Bedria
I agree with you that we should not just copy the West's economic system where debt and interest are the backbone of the boom and bust casino, but instead take a look at our own Islamic system and build on it. No one knows more than the Almighty.
* For a start, we should reform our political system and develop a culture of transparency and accountability from the local level to the highest offices.
* Peg our currency to the price of gold and then accumulate and maintain gold bullions at our central bank.
* Establish investment banks where we can deposit our savings which would then be used to finance start up businesses and other development projects in Somaliland.
* Establish a stock exchange in Hargeisa where we can trade our shares.
* Introduce a fair and competitive tax system.
* Introduce selective protectionism to allow our local industries to grow.
* Develop the infrastructure of the country and keep up with the latest developments and technology.

Yusuf says:

As disclaimer I do not have banking credentials, but still common sense tells me; if it cries like a fox, walks like a fox and hides like a fox then it is a fox. Therefore, we shouldn't get on board unless we know where, when, who we are going with and what we are boarding onto. If this bank gets bust, in the drain will go all the money we all have accumulated in the life time of this nation.

The deal smells too sweet and I think the Bank should get all the loses and profits and just give us some jobs and access to the international banking system. I think we have enough experience with Western banking system, remember what went wrong with this same bank in London last week, when a 30-year-old made them loose 2 billion UK pounds just in few hours.

The Euro zone and the USA are not the only regions that went in banking crisis, the UK went through its worst banking crisis ever few years ago and banks were bailed out by the Government. Well, if Somaliland is able to bail out this bank than let us all jump into the mouth of the shark.

Bedria says:

Hey Jama,

Actually I was reading in the Huffington Post and also it was on the radio NPR about the Third Industrial Revolution and its geared towards clean energy because lets face it we cant keep these fossil fuels burning A) because there is limited supply and B) the side effects will lead to extinction.

Here are a few links on this topic:
http://www.huffingtonpost.com/jeremy-rifkin/the-t…

http://www.huffingtonpost.com/j-byron-mccormick/v…
http://thedianerehmshow.org/shows/2011-09-27/jere…

I know some people are going to say well, we are a small country, we dont have the money to pull this off. But lets remember that its also much easier for us because we are starting from point blank, it will take a while but making us independent with regards to energy is vital to our growth as a nation.

Bedria says:

Every somali always has to say we cant do this when you mention something that might seem different. I am sure people told us the samething when we were gearing up to take on Siad Barre.

Anything is possible, and who said that we have to do that inspite of drinkable water. We can take steps in both direction or one at a time. But ignoring the future is damaging to all of us walalo.