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Effectiveness of Foreign Aid— the Case of Somalia

Published online by Cambridge University Press:  11 November 2008

Ozay Mehmet
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Extract

Somalia is one of the poorest countries of the world, with an estimated income per capita of about $50.1 Yet she is one of the largest recipients of foreign aid: during 1964–1969 she received an annual average of about $15 per head of her 3 million population.2 This rate of aid is more than three times the figure of $4.5 per capita, which represents the average annual aid to other developing countries during 1964–1967.3

Type
Article
Information
The Journal of Modern African Studies , Volume 9 , Issue 1 , May 1971 , pp. 31 - 47
Copyright
Copyright © Cambridge University Press 1971

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References

Page 31 note 1 International Bank for Reconstruction and Development, World Bank Atlas, Population, Per Capita Product and Growth Rates (Washington, D.C., 1969).Google Scholar The $ figures cited in this article are U.S. dollars.

Page 31 note 2 Since a census of population has never been conducted, Somalia's population is not accurately known. Estimates range from a low of 2.5 million to a high of million, with3 million in 1970 generally regarded as a realistic figure. The World Bank gives 2.66 million for mid-1967; ibid.

Page 31 note 3 Pearson, Lester B. et al. , Partners in Development: report of the Commission on International Development (New York, 1969), table 27, p. 392.Google Scholar

Page 33 note 1 Republic, Somali, First Five-Year Plan, 1963–1967 (Mogadiscio, 1963), p. 25.Google Scholar

Page 33 note 2 The exchange rate, which has been stable through the period under review, is $1 = So.Sh. 7.14.

Page 33 note 3 See First Five-Tear Plan, pp. 11–20, for further details of development strategy and priorities.

Page 34 note 1 Ibid. pp. 52–3.

Page 34 note 2 Ibid. pp. 148–9.

Page 34 note 3 The list of countries was as follows (aid in So.Sh.): U.S.A., 78.4 million; Italy, 44.3 million; E.E.C., 82.1 million; U.A.R., 80.0 million; U.S.S.R., 317.5 million; Czechoslovakia, 30 million; and the Federal Republic of Germany, 44.5 million.

Page 34 note 4 First Five-Year Plan, p. 153.

Page 35 note 1 For a summary of these financial difficulties, see Planning Commission, Short-Term Development Programme, 1968–1970 (Mogadiscio, 1968), pp. 15–19.Google Scholar

Page 35 note 2 Ministry of Planning and Co-ordination, Mid-Term Appraisal of the First Five-Year Plan of Somalia (Mogadiscio, 1966, mimeo.), table 1, pp. 9–10.Google Scholar

Page 35 note 3 Ibid. pp. 11–12.

Page 35 note 4 Short-Term Development Programme, p. 2.

Page 36 note 1 According to the estimates given in the World Bank Atlas, Somalia's G.N.P. per capita declined at an average rate of 1.6% annually during 1961–7.

Page 36 note 2 German Planning and Economic Advisory Group, Report on the Progress of Development Projects in the Somali Democratic Republic (Mogadiscio and Frankfurt, 1969, mimeo.).Google Scholar

Page 37 note 1 Ibid. p. 4.

Page 37 note 2 Source: German Planning and Economic Advisory Group, Report on the Progress of Development Projects in the Somali Democratic Republic (Mogadiscio and Frankfurt, 1969,Google Scholar mimeo.) This table includes only those projects for which financial agreements exist.

Page 40 note 1 First Five-Year Plan, p. 151.

Page 40 note 2 Short-Term Development Programme, pp. 33–6.

Page 40 note 3 The state farms project failed badly, due to lack of local funds to pay the wages of workers and other recurrent expenses, and because of poor management. The project was finally abandoned in 1966. See the Short-Term Development Programme, p. 77, for further details.

Page 40 note 4 This was originally an Italian company, but was turned into a mixed enterprise in 1963 with the Somali Government holding a controlling share of the stock. After the coup of October 1969 it was completely taken over by the State.

Page 41 note 1 The efforts of the Somali Government to secure additional foreign aid are repeatedly described in a large number of official documents, e.g. Republic, Somali, Government Activities from Independence until Today (Mogadiscio, 1963), pp. 88–93.Google Scholar

Page 41 note 2 Short-Term Development Programme, p. 33.

Page 42 note 1 For a discussion of project-tied and country-tied aid, see Bhagwati, J., The Eeonomies of Underdeveloped Countries (New York, 1966), pp. 210–11.Google Scholar

Page 42 note 2 The National University has only recently became a degree-granting institution. Students were formerly sent to Italy for their final year's study, at the end of which they were granted degrees from the University of Rome.

Page 42 note 3 Cf. Johnson, Harry G., Economic Policies Toward Less Developed Countries (New York, 1967), pp. 80–4.Google Scholar

Page 42 note 4 Short-Term Development Programme, p. 26.

Page 42 note 5 Johnson, op. cit., reported on a study by Mahbub Ul Haq which showed that, for tied aid, U.S. prices were 40–50% higher than international prices for most iron and steel products, and that freight charges on American ships – usually required to carry 50% of aid supplies – were 43–III % above the international market rate.

Page 43 note 1 Short-Term Development Programme, p. 2.

Page 45 note 1 Source as for Table 1. The discrepancy between the totals shown here and in Tables 1 and 2 is due to for which no financial agreements exist.

Page 45 note 1 For an extended discussion of spread effects, sometimes called ‘linkage effects’ to highlight the fact that they are generated from the interdependence of different economic sectors, see Hirschman, Albert O., The Strategy of Economic Development (New Haven and London, 1958), pp. 98–119.Google Scholar

Page 46 note 1 Source: as for Table 1. Only completed projects included.

Page 46 note 2 These figures, except for 1968, are taken from the Short-Term Development Programme, p. 31. Data for 1968 are taken from the Bulletin of the Somali National Bank (Mogadiscio), no. 20, p. 36.Google Scholar

Page 46 note 3 Short-Term Development Programme, pp. 33–4.

Page 47 note 1 Elm, Mostafa, ‘Who is Helping Whom in the Mirage of Foreign Aid’, in Columbia Journal of World Business (New York), 07–08 1968, pp. 11–18.Google Scholar