by the state for the state

 by the state for the state: by Prof. Abdi Ali Jama.

When adopting free market economy, Government intervention is justified primarily for three reasons:

1-smooth working of the economy : Individuals as well as private enterprises should be reassured that their private  properties, wealth and rights are immune from any violation or misappropriation so that economic system would function smoothly and investment both local and foreign would pour into the economy creating employment and hence would raise the standard of living of citizens.

2-Government is also required to intervene or act whenever market fails to work efficiently; for instance when there is monopoly practices or asymmetric information or externality or severe recession. In these cases government must act or respond by addressing the situation with introduction of new law or regulation to restore efficiency in cases of monopoly and externality or respond by increasing public investment in the case of recession or stagnation.

3- lastly but not least,  government is not only required to intervene but should lead the process of utilization of natural resources for two main reasons: natural resources are not private property. secondly, natural monopoly of these resources would entail heavy regulation from the side of government even if privatized.   

We have been hearing nowadays that two groups are having conflict as to who would launch Berbera Cement factory. I wonder why the two groups are getting their wires crossed as if though there were no government or parliment.  Why did the government provide two permissions to both groups in the first place? has law of natural resource been put in place? If yes, why all this mess and confusion. If no, the government should not have given the permission to neither group before introducing the law of natural resources and get passed by the parliament.

Resorting to traditional elders in resolving such issues is not a good step towards a progressive modern state where economic initiative like Berbera cement are conducted within the framework of legislations, and in cases of conflict both government and citizens refer to judicial system to resolve any dispute. I really feel pity for seeing tribal heads involved in resolving Berbera cement factory for the implications that this might have on the process of moving towards becoming modern state where rule of law prevails not traditional customs.

As for the question,  who did create the vacuum in the first place?  The answer is simple: policy makers. They should have prepared and put a law of utilization of all natural resource in place; not only Berbera cement. What would happen if  we stumble upon oil fields tomorrow? Shall we involve Sultans and chiefs to decide when, who and when to extract the oil? If yes, why should we, as Somaliland tax payers, pay the salaries of around 200 MPs (Gurtida iyo barlamanka). It is really, really, really confusing and frustrating experience.

In the case of Berbera cement factory,  state leadership is required because the ownership of the resource is not private property in the first place, therefore, privatization of such crucial natural resource would require heavy regulation; issuing a permission to group A or group B is not enough. However, in our situation where government has not the capacity to provide the legal procedure that such privatization would entail, I would suggest not to privatize the project. On contrary,  The government should run the cement factory on its own. Full stop!!!!