SOMALI BUSINESS REVIEW Special Edition 2013 Somali Business Review Special Edition 1 Somali Business Review Special Edition 2 Contents Chief Editor Ibrahim Mohamud Hamud Editorial 04 Operation Editors Infrastructure Development and State Building Using the Public Private Ahmed Salat Ahmed Partnership 05 Mohamed Yusuf Abdulle Why Somali Women Enter Into Entrepreneurship? 08 Ka Sakeynta Hawlaha Ganacsiga Iyo Production Manager Shirkadaha 11 Abdinor Dahir Siyad Electronics Business Flourishing in Mogadishu: Implications and Trends 17 Growth Challenges Facing Small Editorial Board Businesses in Mogadishu 19 Abdirahman Mohamed Anas Somalia, Emerging International Bashir Abdisamad Hareed Business Market 22 Amino Omar Mohamud Private Air Transport and Customer Care in Somalia 24 Technology Transfer: What Everybody Cameraman & Should Know 26 Data Collector Contribution of Turkish Investment to Peace-building Process in Somalia 29 Mohamed Hassan (Lafole) The Exercise of Third Party Logistics in Somalia 31 Design & Production Graphic Lineups Limited Does Small Business Need Consulting? 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Since the last time Finally, comments and we have published constructive criticism the last edition, many are most welcome and Somali Business Review Special Edition 2013 4 Infrastructure Development and State Building Using the Public Private Partnership By Abdirahman Mohamed Anas APPROACH: Somali Post-Conflict Economic Recovery Introduction including electricity, water, discuss these issues. fter its infrastructure, health and Emerging History and independence day education. Definition of Public A(the year 1960 Private Partnership - 1969), Somalia had However, all services and Historically, Public Private experienced nine years of facilities owned by private Partnerships have been democratic government institutions were not used over three decades regime with free market destroyed and collapsed in the developed countries. system. In this period and mostly not looted Governments introduced foreign companies unlike the public services. this PPP approach for dominated the country’s This might be implied financing purposes such as economy in general that private sector and social and infrastructure and public services in community participation projects (e.g., hospitals, particular. However, in public service was schools, roads, prisons, military regime changed very important for the water and electricity) the country’s systems and sustainability and feeling (Wilson et al., 2010). It politics in the period 1969 belongingness of the is widely considered as – 1990, which resulted government facilities and a key tool of public policy that all main businesses services. This waked up development in the last and sectors to be civil and private businesses three decades (Hurst, et nationalized and governed to fill the gap to some al., 2004). Public entities by the government extent of public services. tend to realize the greater administrators. This Although, currently the role of private involvement paper is not looking at the country elected new in public services (Argiolas perspective of whether government (which is not et al., 2009). this economic system was transitional) it is time effective or vise verse. to rebuild and re-store PPP can be defined as The issue is that whether all services and facilities a long term contract the citizens had the using public private between public and feeling that they belong partnership approach. private institutions where their public services The purpose of this paper the private takes the e.g. banks, facilities and is to explain the role of risk of providing output other government bases Public Private Partnership services in a agreed and offices. As resulted, (PPP) in infrastructure standards (Wilson et after the collapse of the development and state al., 2010). Stages of government in 1990s the building of Somali post- PPP contracts involve country had experienced conflict economic recovery design, procurement, collapse of all government using literature review. operation of a facility, services and facilities Thus, next sections and/or maintenance. To Somali Business Review Special Edition 2013 5 be more objective, PPP involvement in development Conditions before has the following special projects and public Implementing PPPs characteristics: long services and facilities Wilson et al. (2010) term service provision – is of prime importance assert that PPP 20 to 30 years; transfer at the perspective of projects should take into of risk to the private sustainability issues account issues such as sector; contracts drawn (Argiolas, et al., 2009). social, environmental up between legal entities Jamali (2007) as cited in and sustainability and public authorities Miller (2000) and Saves purposes which are (Roumboutsos and Chiara, (2000) lists some benefits directed by government 2010). The literature of PPP. The fist one is policies, regulations and presents different that there is a desire to contractual provisions. approaches of PPPs. Aziz improve the performance These three objectives (2007) discussed two of the public sector together build strong widely used kinds of PPPs while avoiding fully fledge foundation for other such as a financed-based privatization. The second main conditions for PPPs approach that aims to use one is that PPPs help such as commitment private financing to satisfy reducing and stabilizing between public and private infrastructure needs, and costs of providing services. parties, transparency a service-based approach Finally PPPs may increase and responsibility, and that to optimize the service quality levels. accountability. The result time and cost efficiency The private sector expects could be enhanced service in service delivery. Both to have investment quality, value for money, these two approaches opportunities through satisfied publics, less could be considered corruption cases, good complementing each other For the case of Somalia, governance etc. to provide service quality currently there is one services for the society. project which could be Wettenhall (2007) argues considered as a form of that any PPP project For the case of Somalia, PPP should have the following currently there is one requirements to be a project which could be PPPs which may result genuine partnership: considered as a form significant profitability active collaboration, of PPP. The project is a and increased business horizontal non-hierarchical mixed financed-based interests (Jamali, 2007; relationships between and service-based PPP Hurst and Reevas, 2004; the parties, consensual approach which is run by an Wilson et al., 2010; decision making, no international organization Roumboutsos and Chiara, single “superior” capable (SKA). This organization 2010). Furthermore, of invoking closure, an invests and manages PPPs’ benefits include organizational structure Mogadishu International that Private sector’s such as a partnership Airport. Opponents of this involvement could result board or forum, an ability project argue that local delivering innovative, to achieve synergies and Diasporas businesses efficient and quality between involved persons were not given that service to the community and organizations, and opportunity. at the perspective of value use of respect and trust for money outcomes. as major forms of social Benefits of PPPs capital. Promoters of PPPs argue that active community A Publication of SIMAD UNIVERSITY A Publication Somali Business Review Special Edition 2013 6 The Role of PPP in all projects (Community policies and regulations. in Infrastructure participation) (Jones et al., These regulations are Development and State 2003). Overall, the most supposed to govern all Building important contribution PPPs for rebuilding the Principally, it is widely that companies can infrastructure and state agreed that post- make to peace-building building. Future research conflict countries need is to concentrate on the is required to provide active, equitable, and responsible fulfillment of further study in PPP’s profitable private sector their core commercial role in rebuilding the