By Dr. Suleiman Walhad
November 17th, 20022
I remember I first heard of a gross national product as a young student in my geography class at grade 6. There was this flamboyant teacher, Mr. Hassan Aw Ali, who taught us about geography, countries and where many of the products that people consume are grown and/or produced, and the necessary climes and soils for each of these products. He taught us about wheat, cotton, rice and potatoes, and he would claim his shirt was made of cotton grown in the Nile valley in Egypt. He would teach us the nature of the cotton seed and where it grows, and which countries produce it most and so on so forth. It was in one of those lessons when I came across the term Gross National Product of each country and the Gross National Income and the per capita income and related topics. I used to wonder how they make such calculations for where I was growing, it was almost impossible to calculate the income of each person. Many of the people around me and the village then, where I was growing in, appeared impossible to me. Yet they were measuring and producing numbers for Somalia, Ethiopia, and other countries.
As I grew up, these numbers kept coming back to me through my studies and profession, which required required that I know about them not in terms of how these numbers are calculated but mostly how they are used and what they meant for each country. In a nutshell, I came to learn and respect that the numbers represented the economic pie of each country vis a vis other countries and that the bigger the number was, the better the economy of each country was. Yet something never added for me for countries like those of the Horn of Africa States and many other countries where the use of numbers was limited and where hardly statistical models were used to determine for development.
As I moved on from Africa to more developed countries, it became clearer how those numbers and mathematical calculations were made and I had to appreciate why they were important numbers. I came to learn that each individual’s income was calculated and kept through each nation’s tax regulations. Here it was possible not only to record the gross national product of each company in the country but also the income generated by each adult individual, even if they were in welfare situations. Each company or institution has to make a return each year on its financial activities and so is the case for each individual. It clearly then makes sense to talk about the gross national product or gross national income of a country or nation.
A Gross National Product of a country is not fully accurate but generally represents a close estimate of the total value of all products and services produced by a country through its production and services facilities. It is measured as the sum of personal consumption expenditures, private domestic investment, government expenditure, net exports, and incomes earned from overseas investments minus the income earned by foreign residents. Note net exports represent the difference between what a country exports minus any imports of goods and services. A Gross national Product is related to the gross Domestic Product (GDP), which represents all output produced in a country regardless of who owns the means of production. These statistical numbers lead us to the important other economic indicator used to compare nations or countries, which is known as the “Per Capita Income.” A Per capita income (PCI) or “average income per person” represents the average income per person of a country for a specific period, usually a year. It is used to calculate and represent the living standard and quality of life in a country.
How is it then possible to have a comparable number for countries where neither each individual nor any of the institutions, public or private make returns on their activities each year or a specific period. I know the majority of the people of the Horn of Africa States do not make returns financially or otherwise on their products or services and the largest number of its adult population do not make returns on their incomes or expenditures. They do not even pay all the necessary taxes due from them by law as citizens of the country, though they expect the governments to build schools, hospitals or roads or other economic and social infrastructures for them. The main reason for lack of these numbers and data is the fact that most of the population of the region is rural and do not record any of their activities through which they earn their living. They are either small farmers living on subsistence or pastoralists living off their animals.
The small businesses in their villages and towns do not make any returns and perhaps pay partially only some of the taxes such as property taxes, import taxes through the country’s import entry points and sometimes export taxes again through the country’s export exit points. There is also little of income taxes paid by persons who work for government and other registered international institutions. Many of the major corporations pay only taxes on unverified or unaudited incomes and hence whatever number given for the “per Capita Income” or “Gross National Product” or “Gross Domestic product” appears to be based solely on estimations that do not make any sense at all for the region.
Cathy O’Neil in her book “Weapons of Math Destruction” and I borrowed the title of this article from her book, clearly points usage of wrong data on how to deal with countries such as those of the Horn of Africa States. In this regard, let us perhaps look on the implications of these numbers:
First a “Per Capita Income” is a measure of the wealth of a nation. When one says the per capita income, of the Horn of Africa States, is such a number and the number is an incredibly a low number, it permanently condemns the region to eternal poverty for no major corporation would seek to go into that region. It is a wall against potential investments in the region. In fact, the numbers reported for the region has no relevance to life in the region. No one can live off some US$ 500 to US$ 1,000 per year anywhere, let alone in the Horn of Africa States.
Second, it is used by nongovernmental organizations to come into the region to disrupt the life systems and ecosystems of the region with the pretext of assisting the region, when in fact they participate in worsening situations the region could have managed on its own. They come running to distribute food to empty the stores of their original countries so that new harvests can be stored, and this prevents the local farmers to farm their own lands and produce their own food as was always the case in the past. Many live off food aid these days instead of producing their own food.
Third, a high per capita income allows foreign investors to seek opportunities in the country. The fact that they report low statistical data for the region prevents others to pursue developmental opportunities in the region. These opaque numbers for the region should not be allowed by the governments of the region as a measure of the economies of the region. They are used as unquestionable statistical data and hence are unaccountable. They reflect a region, which would permanently be poor and create vicious models that would not be good for the region. We must remember that no statistical data is accurate or can be perfect and the region should not be a collateral damage for numbers created out of thin air and such are the Gross National Products or Gross Domestic products or the Per capita Income of the SEED countries.
The Horn of Africa States Facing The Truth
Dr. Suleiman Walhad
November 16th, 2022
The past century has not been good for the Horn of Africa States. It was marked by colonialism, post-independence generally shaded by tribal rule and subsequent chaos, resulting from fake tribal nationalisms espoused by the pseudo-politicians that took over from the colonial era and terrorism. They have not led the region to greener pastures but to excessively drier and harsher environment, that only exasperated the life systems of the region, and from which the region still suffers. How come peace and stability is under discussion for Ethiopia in this late first quarter of the twenty-first century and how come is Somalia without a proper government for over thirty-some years and exposed to international terrorism? And how come are Eritrea and Djibouti at each other’s throats over pieces of rocks?
The land space of the region, which was, in the beginning of the twentieth century, much greener and able to sustain both people and animals, has become unable to support the population and animals of the region because of mismanagement. The region, which owns some 4700 km of coasts and sea-spatial economic zones of some 973k sq. km (Somalia 886K plus Eritrea 78K plus Djibouti 8K) in addition to 1.8 million sq, km of land still suffers from hunger and starvation, despite the fact that it can accommodate many millions more than its current population of some 157 million people.
The region, despite its long history, almost dating back to the dawn of history, has suffered during the past century through chaos resulting from foreign interference, and hence weakening of local governance, brainwashing of the population into clan/tribal mindset instead of regional development, migration of the population away from the chaos and climate change induced limited life-sustaining opportunities. It has almost become a region which cannot sustain life unless some serious developmental changes are instituted.
And there is where the need for the region’s leaders lies. They need to address the region’s current plight and transform it into one of hope and favorable development, regional integration and away from the tribe and its selfish approach to matters of regional interest. The Horn of Africa States needs to move to improve governance through stabilization and acceptance of the rule of law, which can only be achieved through tackling of corruption and strengthening of the judiciary and hence justice. An integrated action plan for the region would be necessary if hope and development has to be achieved. The current nation-state infrastructure has only exasperated the tribal/clan instinct left over by the old pseudo-politicians and their foreign mentors.
There are winds of change blowing in the region. HAS is just waking up to a new frontier where the fake nation state is no longer workable, where tribal instincts, even from those with the best education the world can offer today, prevails, killing many, simply because they are from a different tribe or clan or religion or mindset. HAS is just waking up to the huge energy, maritime, telecommunications, tourism, and agricultural potential of the region. It is waking up to the immense infrastructure and ecosystems that the region can present to both local and foreign investors. It is waking up to the great economic diversification that can create employment and better livelihood opportunities for the population of the region.
We note that the region is late in presenting itself as democratic, but the process of democratization and the rule of law is well underway, where one group is no longer able to claim that it has a birthright to rule. The region is just waking up to exploiting its huge potential, both material and human, to achieve, what its forefathers always achieved when they were working together. Naturally, the region is being exposed to all kinds of evil forces to pull it back and down. The ages-old infights and tribal instincts are still in place in certain quarters, but this is being worked out for peace and stability is the only forward. It is where the leadership of the region is required to emphasize and develop.
The region needs to face the truth. The old ways are not working and that a new path has to be taken as represented by a solid cooperation of the SEED countries and this should start now and not tomorrow. The leadership of the region must lead the region to rule of law and justice, democracy, political development, societal peace and stability, and economic welfare at every corner of the region. It is the only way forward, which leaves no quarters for foreign interferences and malign forces of every hue and color.
Neither regions nor countries make themselves. The leaders make them. The Horn of Africa States can only be made by its leaders should they wish their region to rise from the current state of being under the bottom of nations in the world.