To sustain its positive trajectory,Somalia needs to break out of its dual development trap,where inadequate resources and minimal trust in governmentare preventing the state from providing the public goods andservices necessary to consolidate its legitimacy, whilelarge periodic shocks (such as drought) reverse the gainsmade and endanger the welfare of the most vulnerable. Tobreak out of this cycle and launch itself on a durabledevelopment trajectory, Somalia will need both improvedinstitutions and predictable development financing. To takeadvantage of the opportunity provided by the currentrelative political stability, this systematic countrydiagnostic (SCD) applies a modified version of the changingwealth of nations framework. This framework is focused onbuilding up sustainable national wealth rather thanmaximizing short-term consumption, and is based upon anassessment of the stocks of various forms of capital-natural assets like land, forests, fish, and minerals;productive assets like buildings, machinery, andinfrastructure (such as highways, ports, and electricitygeneration); human assets (population, education, andhealth); as well as the intangibles (such as the quality ofinstitutions, the vitality of the private sector, and thefunctioning of the society) that govern the functioning ofthe economy. In this framework, development is defined asthe process of accumulating a diversified and growingportfolio of national wealth. Among other approaches, bydifferentiating intangible capital in terms of its social,institutional, and entrepreneurial aspects this SCD moreexplicitly captures the quality and capacity of publicinstitutions and governance, the functioning of socialsafety nets, inclusion and the strength of disputeresolution systems, and entrepreneurship. It also makes itpossible to identify such obstacles to development asconstraints on the accumulation of capital or drivers ofcapital depletion.
PDF
download
878987797
028-85220240
