Monday, July 19, 2004

Somaliland: Women and the informal economy


 
When the country is striving hard for international recognition, where external investment is low, high underemployment and unemployment, instable economy, there are women, who contribute most for supporting countries economy through non-formal economy.
 
The non-formal economy is the area that is not recognised, recorded, regulated and protected by the public authorities. It is under now on discussion whether the public authority should provide support and protection to the non-formal economy.
 
It is hard to realize and admit for the planner, economists and policy makers that the bulk of economy and employment are being generated in the country through informal sectors. This sector not only creates job opportunities to millions of poor and unemployed but also flourishes national economy to a greater extent.
 
Study says that in Africa itself informal economy accounted for almost 80% of non-agricultural employment, over sixty 60% of urban employment and over the 90% of new jobs over the past decade. Though there is no available statistics about informal economy in Somaliland but it is more likely same as of rest of Africa.
 
Hargeisa, the capital of Somaliland, has witnessed the rising trend of informal economy over the past few years. Businesses starting from chat (one type of leaf people chew which is mild toxic in nature) to gold are operated and managed mostly by the women. The business is so rapid and fast growing sometimes it creates illusion that the Somaliland economy is moving with this. The skills and competencies women exhibit in handling this business apart from their household chores is really surprised.  People should not be astonished if I say the women primarily control the informal economy in the Hargeisa city.
 
Why it is called informal:
 
This is not an organised sector. Economy theory does not speak much about this. Economists consider this economy does not contribute for national economy at macro level. Other reasons for considering as informal economy are based on certain criteria and assumptions like; any national law does not directly govern the sector. Government does not recognise the economy so they do not protect and safe guard the economy. As this is not recognised so it does not comes under the preview of legal framework. Many economists argue that the prime reason for non-acceptance by the government is because the economy does not directly contribute financially to the treasury of Government. Whatever the reasons there in, the truth is the sector is not properly patronised and cared.
 
The non-formal sector works under high degree of economic and social insecurity. They do not get any support in terms of formal credit linkage, skill upgradation, and business information because of its non-recognition and not organised status.  
 
How this business runs?
 
The fundamental requirements for any business to run are buyer, seller, place, materials and money. If we analyse the market ingredients of this economy in Somaliland we find that the buyers and sellers are from rural and urban local communities. They gathered mostly in the pick hour of business that is 8 am to 12 pm. The items they sell in the market are numerous starting from money exchange, vegetable vending, jewellery selling, tea vending, chat selling, traditional handicrafts business, cloth retailing to milk and meat selling. The mode of transaction is through Somali shillings (now 1 US $ is equivalent to 6500 SSh).
 
The challenges for the sector:
 
The major challenge is the nature of business itself which is highly volatile and shaky. Second challenge the sector encounter is the access to credit. People do not get formal credit through financial institutions because of the collateral issue.  Though the credit requirement differs from business to business starting from 50 US $ to 5000 US $. It was found that almost all entrepreneurs borrow money for business from the informal moneylenders mostly from relatives, businessman. Sometimes they do business on percentage share basis. They just take product from the whole sellers then sell it in the market and at the end of the day they return money to the whole seller and receive some percentage of the profit. Third challenge they face is lack of insecurity in the field of employment because of high instability and no legal bindings. Job insecurity because the sector is controlled by various invisible agents and external factor which do not guarantee professional growth and any formal contract. Labour market security is non-existence because the government policy does not protect or provide economic or social guarantee.
 
How to mainstream the informal economy:
 
In Somaliland context mainstreaming informal economy is like mainstreaming country’s economy. It is clearly evident that the Non-formal sector absorbs more people than formal sector in the country.
The greatest challenge in front of the country is access to external resource support for mega projects. So the alternative is to create environment for small enterprises both in formal and non-formal sector. This act will not only reduce unemployment but also raise per capita income of the country. This is not only Government who is responsible for everything but also it is NGOs, civil societies, academic institutions, and financial institutions who have responsibilities and duties for the people and the cause. 
 
Areas need more focus and supports:
 
Right to work as fundamental right.
Freedom of association and right to organize and bargain collectively.
Credit support through formal system to make free from debt bondage.
Protection against any kind of exploitation in business and trade.
Ensure workplace security, work decency and basic facility.
Government policy to protect the sector and economy and strengthening labour law.
Include in social security net. Like free health service, insurance etc.
NGOs can organise workers, provide basic training and education, provide financial linkages, assist in policy advocacy and law, basis health care for the workers etc.
Bankers can train them on business, extend credit facility, organise saving and credit groups and can make necessary amendments in the bank law for the credit linkage and technical support for the non-formal sector. 
  
  
  
  
  
  
  
 

Friday, July 02, 2004

Sustaining Education

Sustaining Education is Sustaining Life. While education brings changes in lives and carries prosperity to the humanity at the same time educational institutions find it challenging to sustain itself. Many educational institutions in the third world countries depend upon external donations and Government support to run the institutions. In the present fast moving and demanding world quality and excellence is the majoring rod for success. To be an effective organization it is necessary to have well defined Mission, Vision and Core Value in place and in practice. This not only allows for more experimentation, research, diversification and team work but also encourages leadership, invites strategic thinking and establishes supportive work environment and work culture. To run all these things and continue in the effort it is necessary to have technical, managerial and financial resources available within the institution for use and support.

Yesterday I had visited Amoud University in Borama. Borama is a small town of Somaliland. Borama is strategically situated bordering to Djibouti and Ethiopia.
The Amoud University is located outskirt of Borama on a valley. The scenic beauty of nature and the very location of the University not only attract students and local natives but also visitors within and outside the Somaliland. The name Amoud (literary meaning is Valley) justifies is location and presence. There are no public or private transportation facilities available for the university campus but one can avail University transportation facilities. Students and lecturers use University bus for coming to the University.

The facilities:
The University is situated over 30 to 40 acres of land. More than 25 rooms and halls available for use as class room, computer laboratory, Director’s room, staff room, library etc. The University also has an extension study centre in Baroma town. Quarters for supporting staff are also available.

The University has a generator which can supply power to all blocks of the campus, 24 hours pipe water supply and also a canteen for tea, snacks and cool drinks.

University assets:
The University has a big library with more than 83,000 reference books, magazines and reports. It has more than 50 personal computers, one printer cum photocopier and one in focus (projector). For transportation it has five 30 seated bus and a small 8 seated cab.

Teaching Staff:
There are more than 30 teaching staff, 10 supporting staff are working in the university as full timer. Most of the staff are from Hargeisa town and they stay in Baroma.

Student and courses:
At present 3 major courses are available. These are on Business administration, Education (Science stream), Medicine and Surgery. Along with these a new course is introduced for imparting training to secondary school teachers. Altogether 450 students are participating in the education in different semesters. Majority of students are from Somaliland but there are few students from neighbouring countries.

How the University has been running?

The University has a management committee to look after over all work. Director of the University manages day to day functions of the University. To run the University an amount of 200,000 US dollars required each year. Though the actual requirement is more but University manages within this by reducing activities and payments. Nearly forty to fifty percent of total revenue comes from Students fees and rest of amount comes from donation from International Organizations, donor agencies, local community in Somaliland and Somali Diaspora and from government grant.
The library books and vehicles are donated by agencies and individual donors from Diaspora. Generator and some computers are received from the President of Djibouti as donation, Computers for students and staff are from International Cooperation for Development (ICD). ICD (CIIR) also provides Development Workers to the University under skill sharing programme. Development workers supported University for management of library and Information Technology program.
The major expenses for the university are under the head salary to the staff, teaching materials and student’s examination expenses, running cost for Generator, Water, Vehicle, maintenance and day to day management.

The Challenge:

The Challenge before the University is how to be self-sufficient in terms of financial, technical and managerial.

I request your suggestions and opinions. Suggest how the University can run with limited external funding or no external support.

I am putting my suggestions here:

Corpus Fund: Generating fund by collecting from agencies, Government, individuals and from different sources in the form of donations or revenue. Continue collections and deposit in the bank as a fixed deposit. After 10 to 15 years the interest of the bank deposit can be used as a part of sustenance.

Research, Training and consultancy Programme: As the University has infrastructure (Rooms, Library, Bus, generator, Computer, projector) and person power for general and technical support (teaching and supporting staff) in place so the university can take up small training programmes with the help of teaching staff for Local NGOs, INGOs, Government, business people and other groups. Using their present area of expertise of the university like economics, science, health, medical, computer etc, training programmes like Micro – credit, self help group, small business / entrepreneurship, laboratory technician training, community health training, data entry operator, basic English, training for health staff, general management, human resource management etc can be organised. University can take up research and consultancy projects of Government, UN, INGOs and others to generate revenue.

Field Extension Programme: Under field extension programme University can take up development projects with the support of UN, International Donors, Government and NGOs. Separate development wing can be functional with the guidance of some teaching staff. Student’s knowledge, skill and time can be use for this. Or field work could be a part of teaching and every student should take field work as a compulsory subject.

Facility renting: University can rent its existing facility like rooms, computer, library etc for different training programmes, conference, workshop, seminar etc to outsiders.

Opening study centres: University can open study centres for International Education Institutions in the university campus.

Certificate Courses: 3 months or 6 months Certificate course on Rural Development, Business Management, Health Management, IT management, Data entry operator, etc can be introduced. Government, private and Non Government Agencies can be contacted for providing job placement of these students.

To start all these University needs to do two major things. One is equipping its staff through training, orientation or exposure to take up above tasks. Second is establishing contact with any agency or agencies to avail support to start the activities at the beginning stage.

What is your suggestions?