Somalia starts off on the long road to economic stability

Near a small town in northwestern Somalia a state farm lies abandoned, its Soviet-built harvest combines and tractors rusting in the sun. Further to the east, on the edge of the Indian Ocean, a state-run canning factory stands idle, having failed to produce in a year what it was meant to produce in a day. And on the outskirts of Mogadishu, the capital, a government-owned plant that has long since ceased canning tomatoes still keeps employees on its payroll.

These and numerous other economic ``white elephants'' -- a legacy of Somalia's ``Soviet period'' -- have helped convince its president, Maj. Gen. Siyad Barre, that something is drastically wrong with his government's ``revolutionary'' policies.

Like Tanzanian President Julius Nyerere's reappraisal of his country's economic blunders, General Barre, with a little persuasion from the International Monetary Fund, the World Bank, and most donor nations, appears to be taking steps to remedy the failure of ``scientific socialism.''

``It's been an absolute catastrophe. Like Ethiopia . . . this regime has shown itself incapable of running the country in the interests of the people,'' one senior West European with 15 years in Africa stated bluntly. ``There is not a single state-owned industry in this country that works. That does not hold true for small-scale private industries. They provide jobs and salaries.''

Corruption, massive military expenditure, top-heavy bureaucracies, and hopelessly inefficient government enterprises have all contributed heavily toward the present state of economic destitution in Somalia, a largely nomadic country of between 4 million and 5 million inhabitants that is about the size of Texas. Somalia is rated by the UN as one of the world's 25 poorest countries.

Also responsible for the current situation are such unfortunate external factors as drought, refugee influxes, and a drastic drop in vital exports. Compared to many other African countries, its natural resources are meager. Agriculture, livestock, and fisheries are its best avenues for development. With better marketing, Somalia could probably also significantly boost its traditional exports of frankincense and myrrh, a base ingredient for most good perfumes.

According to international aid officials, over 50 percent of Somalia's gross national product is based on foreign aid. This amounts to roughly $450 million a year of which the United States, donating $85 million in fiscal 1985, provides the largest single portion. A confidential report recently put out by the World Bank, according to a diplomatic source, notes that Somalia has not experienced any real overall growth of its own since 1972.

Faced by such formidible economic stagnation, policy changes were inevitable. Pressured by the donors, the Somalis began in 1980 to move toward a gradual dismantling of ``scientific socialism.''

The new liberalization has already stimulated vigorous growth in certain areas. Agricultural production, for one, has improved. The amount of acreage planted to sorghum and maize has more than doubled since 1983. Farmers are also expecting a bumper crop this year because of good rains.

New joint government-private enterprises have been springing up in fertile regions. ``It has become profitable for farmers to produce,'' noted one West European economist.

Fully aware that Somalia is just beginning to grapple with the problems at hand, Western development officials are cautiously optimistic. ``The Somalis have made a start. I think they're on the right track, but it's going to be a tough job,'' said Louis Cohen, director of the US Agency for International Development in Mogadishu.

Although private enterprise can certainly boost the Somali economy, it is not the only answer. Nor is simply pouring in more money and development expertise. ``Somalia's potential is limited, I am afraid, and no amount of waving the Cinderella wand is going to change that,'' said Brian Falconner of the World Bank.

Among the many changes the donors are trying to encourage is a drastic reduction of the government work force, and providing better pay for those who remain. At present, an estimated 60,000 to 70,000 Somalis are employed, most of them uselessly, in ministries and government-run industries. The private sector, it is hoped, will take up the slack.

As it is, many civil servants are forced to moonlight or resort to corruption as a means of augmenting their salaries, salaries that have not changed since the 1969 revolution. What has changed since 1969 is the cost of living due to serious problems with inflation. Some officials, for example, prefer to take bribes for themselves rather than charge import duties for the government, causing a severe loss in state revenue.

Together with the donor nations, the Somalis have also established special task forces in order to concentrate on their most promising assets: agriculture, livestock, and fisheries.