Submitted to the Government of the Republic of Somaliland by

Davies Consulting GmbH
Pretzfelderstrasse 3
D-8000 München 60
Tel: (089) 87 91 35
Fax: (089) 87 11 915


30 January 1992

© Davies Consulting GmbH 1992

Table of Contents

Preface to Online Edition

This Project Proposal was prepared by Davies Consulting GmbH, a German company, at the request of and under contract from the Minister of Finance, Dr. Ismael Mohamed Hurreh ('Buba'), during the Winter of 1991/92. It was based upon earlier proposals by Mr. Abdulkarim Ahmed Guleid, including, among many others:

• "Demobilizing Most of the SNM Military Forces and Transferring the Rest of SNM Military Forces to Our Government", Abdulkarim Ahmed Guleid, 31 July 1991.
• "Preliminary Concept for a National Library of the Republic of Somaliland", Abdulkarim Ahmed Guleid, 1 August 1991.

that Davies Consulting GmbH studied at his request. This resulted in Davies Consulting preparing more-detailed studies on these topics, including, among many others:

• "Draft Proposal for Demobilizing the Military Forces of the Republic of Somaliland", Davies Consulting GmbH, 4 February 1992.
• "Project Proposal for creating a National Library in the Republic of Somaliland", Davies Consulting GmbH, 27 January 1992.

The proposal here integrated this earlier work together with more-detailed data from the Minister of Finance and exchanges of drafts with him. 

The original concept of this proposal was to seek funding on behalf of the Government of Somaliland to strengthen their new government. It was seen as a supplement to their current income and activities at that time. However, in the end, it represented a total amount so many times larger than their existing budget, that it became defacto a new and first genuine annual budget for their Government. The original concept was for Davies Consulting GmbH to present this proposal to the German Government for funding, on behalf of the Government of Somaliland -- and therefore the cost estimates were in German Deutschmarks.

The Minister of Finance revised this proposal slightly and presented it to the United Nations in New York at the end of February 1992 and to the World Bank in Washington, D.C. at the beginning of March 1992. [See: Appendix 3 of "Reunification of the Somali People", Jack L. Davies, 20 February 1995.] The UN approved this budget as a budget appropriate for the needs and goals of Somaliland and worthy of being financed. They assisted the Minister of Finance in revising this budget, mainly by converting most of the DM values from Davies Consulting GmbH to US dollars at an artificial rate of 1-to-1, thereby practically doubling the real size of this budget. 

The World Bank also liked this budget, but in the end, neither the World Bank nor the United Nations provided any funding for it -- for political reasons rather than the need or appropriateness of this budget. Therefore, this budget was never put to the ultimate test of reality. We can only speculate as to whether the implementation of this budget at that time would have been sufficiently successful in Somaliland to have provided a positive example for Southern Somalia to follow that could have thwarted the chaos that evolved there.

Ultimately, the International Community chose to impose defacto economic sanctions on the Government of the Republic of Somaliland, deliberately denying any official grants or loans to this Government, in an effort to coerce them into giving up their democratic government and independence, in favor of submitting themselves under a new "national" government in Mogadishu, that still does not exist in reality -- nearly 10 years later.

This historical document has now been placed in the public domain on the Internet so that it will be available to all Somali citizens. It is no longer relevant as an operational "budget" for the Republic of Somaliland, but it may still be useful for other Somalis in creating new democratic governments "from the bottom up" in their local areas. It does demonstrate that creating genuine democracy is almost impossible in a war-torn country without adequate external financial support for getting started. This may not be the only reason, but certainly has been a major reason for the slow and erratic progress of Somaliland towards democracy during its first 10 years of existence. The fact that they have largely succeeded, despite the major obstacles placed in their way by outsiders, will be a lasting testimonial to their tenacity in pursuing their dream for the kind of democracy that they themselves wanted to have. An understanding of this basic fact alone may help both Somalis and non-Somalis to understand why Southern Somalia slipped into chaos and destruction for a whole decade after deposing the oppressive dictatorship, while Somaliland remained reasonably peaceful, democratic, and gradually restoring their own economy themselves.

Miami, July 2001

1 Executive Summary

This project proposal is focused upon strengthening the new democratic Government of the Republic of Somaliland. It emphasizes the need for assisting the Government to strengthen its transitions to democracy, decentralized government, and a free-market economy. These particular activities do not include funding or activities for the actual reconstruction of the shattered infrastructure or reflation of the economy -- which must still be planned by the Government, with the direct support of this project. The details of this proposal have been coordinated closely between DACO and the Government of the Republic of Somaliland, which requested DACO to develop this proposal and to seek funding for it.

This new Government is currently organized as a decentralized democracy at the following levels:

• a National Government with an elected President and Vice President, 18 Ministries, an elected Legislature, and a Supreme Court,
• five Regional Governments, with elected governors and regional departments for education, health, police, public works, livestock, and agriculture,
• six Municipalities for major cities with elected mayors and commissioners for health, education, security, public works, etc.

The National Government currently has only 800 civil servants, but should expand to about 2800 employees by June 1992. The Regional Governments should expand from 550 to about 1800 civil servants by June 1992. The Municipalities should also expand from 800 to about 3000 civil servants by June 1992. The total will be about 7,600 servants, i.e. 0,19% of the approximately 4,000,000 population. (The equivalent of having only 144,000 civil servants at all levels of government in the Federal Republic of Germany.)

The primary goals of the Government for this project include:

1. strengthening the ability of the Government to function
   effectively as a government,
2. speeding and strengthening the implementation of current policies and processes (including the transitions to democracy, decentralized government, and a free-market economy),
3. supporting a systematic approach to strategic planning,
4. supporting an increased level of regional cooperation in the Horn of Africa, and
   supporting an increased level of international cooperation.

This project is divided into the following sub-projects for the purpose of achieving these goals:

1. general consulting services,
2. an infrastructure package,
3. a short-term budget subsidy,
4. demobilizing 75% of the military forces, and
5. creating a National Library.

DACO is also cooperating with the Government in other areas, where we are seeking primarily private financing rather public financing, such as for creating a venture-capital fund.

Mr. Abdulkarim Ahmed Guleid has a mandate from the Government of the Republic of Somaliland to serve as their representative to Germany, Austria, Switzerland, and Belgium -- until his Government is recognized and ambassadors can be exchanged. One part of his responsibilities within this mandate is to coordinate all foreign aid to his Government from these countries. Mr. Abdulkarim Ahmed Guleid has given a mandate to DACO to formulate project proposals for his Government and to seek funding for these proposals from appropriate sources. (Copies of these mandates are available upon request for potential sponsors or donors for this project.)

The Minister of Finance, the Honorable Dr. Ismael Mohamoud Hurreh, has also given a separate mandate to DACO in parallel, for DACO to formulate proposals and seek funding for the projects that we have discussed for strengthening his Government. The Council of Ministers has also endorsed this work.

For the project defined here, and its various sub-projects, it is possible that more than one sponsor may be willing to provide funding for different components of this package. The detailed definition of this project is evolving and can be expected to change during the course of this project. In particular, at least some of the general consulting services of the first sub-project must be financed first in order to define the other sub-projects in more detail. The sub-projects for demobilization and creating a National Library are already clearly defined and are already being presented separately.

This offer will be valid for 45 days. The detailed terms are open for negotiation. DACO will provide curricula vitae and a list of prior projects of DACO upon rquest to potential sponsors of this project and sub-projects.

2 Goals of the Government as a Whole

Following is a summary of the goals of the Government of the Republic of Somaliland for this project, including a brief summary of some of the discussions that have already taken place:

2.1 Ability to Function as a Government

The civil war ended in the North of the former Democratic Republic of Somalia at the end of January 1991. After reconciliation among the different clans and professional groups within this region, the citizens agreed in May 1991 by democratic methods to form a new Nation, the Republic of Somaliland, on the territory of the former British Somaliland.

The infrastructure of the Republic was nearly completely shattered during the civil war. Over 70% of all buildings were destroyed, all capabilities for generating and distributing electricity were destroyed, nearly all telecommunications facilities were destroyed, most supplies of water were disrupted, and approximately 1.5 million active land mines were left, particularly in and around villages and cities as well as along rural roads. Between 10% to 20% of the people were killed, many more suffered permanent injuries and over 50% of the population is still displaced, either internally or as refugees abroad.

There is practically no tax base left for the Government to collect significant revenues itself. Other governments around the World have delayed recognizing the Republic, primarily for reasons that have nothing to do with the Republic itself. Therefore, the Government has received practically no foreign assistance during the first year after the war, other than immediate humanitarian aid. (What would have happened in Europe after World War II, if the beginning of reconstruction had been delayed artificially for more than one year due to politics in another part of the World?)

In this situation, the Central Government has been surviving with total revenues of about 130,000 DM per month on an average. With about 800 officials and employees, this gives an average per official of about 162.50 DM per month for salaries and other operating expenses (including Ministers). Although this Government has many very-highly qualified officials, it is unable to function effectively as a government with such a ridiculously low budget. It is also unable to attract other talented Somali citizens to work for the Government on the urgent tasks of reconstructing the shattered infrastructure and reflating the economy. It also has no funds left over for financing humanitarian aid, the reconstruction of its infrastructure, and reflating its economy. This Government could potentially create many interesting plans, but it lacks the resources to even begin the implementation of any of these plans. It doesn't even have the financial resources to collect and analyze reliable data as the basis for serious planning activities.

Although the Government has practically no debts, internally or externally, it can not borrow money on international markets as long as Western governments withhold recognition. As long as it has practically no funds available, it can not afford to conduct public relations activities to inform the rest of the World on what is going on in its Country or to conduct an effective diplomatic effort to quickly achieve official recognition.

Within the framework of this new democratic government with a new free-market economy, but no external assistance, the citizens have already shown amazing innovative strength in repairing many buildings and reconstructing the micro-components in the private sector of their shattered infrastructure by themselves. However, they can not reconstruct the larger components in the public sector of their shattered infrastructure without foreign assistance.

Due to the lack of financial resources alone, this Government is not able to perform the normal functions of acquiring data, developing plans, and coordinating activities for meeting the immediate humanitarian needs of its people. Therefore, the many NGO's working in the territory of the Republic on humanitarian problem simply bypass the Government, which in itself weakens the Government, and they do not even coordinate their activities adequately among each other. Many of the ad hoc and uncontrolled activities of these NGO's for solving short-term problems, from their perspectives, are causing serious long-term damages for the Republic. Therefore, it is urgently necessary to provide this Government with the bare minimum of financial support so that they can effectively plan, coordinate, and manage the activities within the Republic concerning humanitarian aid.

As one example, preliminary estimates show that the current population of the Republic is from 4 times to 8 times larger than the land can support in traditional activities of nomadism and farming. Without any strategic planning or coordination, international organizations are trying to resettle nearly all refugees and displaced persons as nomads and farmers. This may appear to be appropriate in the short-term, because the villages and cities are destroyed and international policy is to provide emergency humanitarian relief without providing any reconstruction of the infrastructure in the cities and villages or reflating the economy with other options for these people to become self-sufficient. In the long-term, this short-sighted policy is laying the foundations for a major ecological disaster that will make these people dependent upon increasing levels of foreign humanitarian aid for many years. We are working on long-term strategies, but the lack of funding is blocking significant progress. The lack of any library facilities or reference documents within the Republic is also a major hindrance.

This new Government is the most democratic government in the Horn of Africa today. Other still newer governments in very similar situations, such as in Ethiopia and Eritrea, are looking at the way the Western World is treating the new democracy and free-market economy in the Republic of Somaliland as an important precedent for deciding how to move themselves. Therefore, it is in the interests of all supporters of true democracy and free-market economies to assist the new Government of the Republic of Somaliland to be successful in its brave new venture.

For these and other reasons, it is urgently necessary to provide a minimum amount of support to this Government so that it can function effectively as a government. The balance sheet for the first year after the end of the war of liberation shows that the humanitarian plight of the citizens of the Republic of Somaliland has been increasing, rather than decreasing, particularly during the past 6 months. This is a direct consequence of international policies of not recognizing the Government and not providing any aid, other than emergency humanitarian aid, such as for removing the fundamental causes of these humanitarian needs.

2.2 Speed and Strengthen Current Policies and Processes

The citizens of this new Republic made a number of important policy decisions even before creating the new Republic of Somaliland and the new Government has been implementing these policy decisions to the best of its limited ability. It is urgently necessary to provide a minimal level of support so that these important policy decisions will have a fair chance for succeeding. Following is a brief listing of the current policies and processes that need to be strengthened quickly:

• the transition from the socialist dictatorship of General Barre to a representative democracy,
• the transition from a highly-centralized from of government to a highly-decentralized form of government, restoring real political power to the individual citizens,
• the transition from a centrally-planned economy to a free-market economy,
• creation of an appropriate new Constitution,
• creation of an independent Judiciary,
• creation of a legal infrastructure to support the creation of new privately-owned enterprises and joint ventures with foreign partners as well as smooth operations of the new free-market economy,
•  strengthen the substantial progress already achieved towards guaranteeing the human and civil rights of all citizens and residents according to accepted international norms,
• creation of an independent central bank and new currency,
• continuing the rapid disarmament of its military forces, and
• planning and coordinating international assistance in the areas of
  • humanitarian aid,
  • reconstruction of the infrastructure, and
  • reflation of the economy.

As one simple example, local experts are working on a new Constitution in preparation for free elections (as soon as enough of the refugees and displaced persons, over 50% of the total population, have returned to their homes to make elections technically feasible). However, this important work has been slowed since no funds are available to obtain the technical assistance of international experts on constitutional law. In addition, there are still no library facilities within the Republic that the Government can use as a source of reference materials. It is not feasible to simply copy an effective constitution from another country, if only because the nomadic nature of the local society requires creative solutions for providing effective democratic procedures that must be technically different than the democratic procedures that are easy to implement in other societies.

As one other simple example, the main currency in circulation within the Republic is the Somali Shilling of the former socialist dictatorship. The Government and Central Bank that issued and backed this currency no longer exist! Under the former dictatorship, this currency experienced sharp inflation. Today, it is experiencing sharp deflation in the Republic, only because the old paper bills are wearing out and being lost -- so that the supply of money in circulation is decreasing while the economy is slowly recovering. According to rumors, billions of Shillings as freshly-printed but un-issued paper bills are stored in Mogadishu and could be released into the economy at any time -- which could cause unimaginable disruptions to the local economy.

The new Republics of Slovenia and Croatia had funds available to design and print new currencies one and one-half years before they actually needed them. But the Republic of Somaliland still does not have the funds needed to design and print a new currency of its own (at a cost of about $10 million and taking about 15 months time). The Government has had some preliminary discussions with Giesecke & Devrient in Munich through DACO as well as with Thomas de la Rue in Great Britain concerning a new currency, but has not been able to place a first order. DACO has developed preliminary monetary concepts based upon the ECU in Europe and has experts available to develop these concepts further, but can not do so without funding. There may be a realistic chance, within a framework of regional integration, to create a regional East-African Currency Unit (EACU), as a single currency for this regions -- which would allow several countries to share the costs for designing and printing such a new currency. However, the Government has no funds for developing such a concept or negotiating with neighboring Governments.

The Republic of Somaliland quickly consolidated the militias of the various liberation movements on its territory into a national military force. At the same time, it quickly demobilized this force down to about 40,000 men by the Summer of 1991. The Government has had plans for continuing demobilization down to about 10,000 to 12,000 men since then, but has been blocked in achieving this goal by the lack of funds to do so. Rapid demobilization after a war of liberation is a complex process, particularly when the economy is shattered so that there are no economic opportunities for demobilized soldiers. Therefore, it requires adequate funding in order to be successful.

In the first more-or-less ad hoc demobilization, many middle-level officers left the military to resume their civilian professions, often leaving units of soldiers with no contact or chain-of-command with the rest of the military. This problem is complex, due to the destruction of virtually all telecommunications and postal capabilities for internal communications, even within the military. The Government has no funds for paying any salaries to any of its military personnel, other than occasional handouts of food. This is a potentially dangerous and destabilizing situation, with several thousand teen-age soldiers, still armed with semi-automatic weapons, but with no contact with superiors or any income. This was the cause of fighting that occurred in Burao in January 1992. It was reported incorrectly as fighting among different clans, but was actually several cases of hungry soldiers using their weapons to obtain food. We expect that this problem will continue to get worse and threaten the new democracy as long as the Government does not have adequate funds to defuse this dangerous situation.

The Government urgently needs cash for the following actions:

• to buy shoes and civilian clothes that it can "trade" for the weapons of the soldiers that it wants to demobilize,
• to provide demobilized soldiers with temporary minimum-pay civilian jobs of reconstruction,
• to buy new uniforms and insignia for the remaining military personnel to identify them as such,
• to provide limited training in order increase the discipline of the remaining military personnel and to give them non-lethal alternatives to firing weapons in order to maintain civil order,
• to pay the remaining military personnel small salaries,
• to collect, store, and maintain the vast amount of military equipment and munitions that it still has, if only to keep these weapons and munitions under safe control, and
• to collect the large number of weapons in the hands of civilians.
  As a complete sub-project of this project, we have already developed a complete concept and project proposal for achieving this important goal.

The local availability of an appropriate reference library is also a pre-requisite for strengthening the ability of the Government to perform effectively as a government. For this reason, we have developed a complete sub-project for creating an appropriate National Library in Hargeisa.

2.3 Strategic Planning

It is extremely important for the Government to develop strategic concepts and policies before starting out with low-level reconstruction and development activities that could preclude changing later to more appropriate strategic concepts. Following are a few areas where such strategic concepts are urgently needed, before reconstruction, reflation, and resettlement progress much further:

• energy,
• telecommunications,
• transportation,
• natural resources,
• tourism,
• population control, and
• structure of the new economy.

As one example, energy is required for cooking fuels, motor-vehicle fuels, and generating electricity. The simplest ad hoc policy, that is already evolving without any strategic planning or guidance, consists of

• continuing to rely upon wood and wood charcoal for cooking, even though nearly all trees have already been cut for cooking fuel,
• continuing to rely upon imported gasoline and diesel fuel for motor-vehicle fuels, and
• continuing to rely upon imported diesel fuel for generating electricity.

It would appear to be very desirable to seriously consider

• developing the very large deposits of lignite (brown coal of a similar grade as the brown coal mined in the Ruhr area of Germany, in a deposit 800 km by an average of 50 km, i.e. 40,000 sq. km.) to make briquettes for cooking as well as a fuel for generating electricity,
• developing the natural gas reserves for cooking as well as a fuel for generating electricity,
• developing the geothermal potential near Berbera for generating electricity and as process heat for creating liquid fuels from lignite,
• using solar and wind energy more extensively whenever feasible, and
• reconstructing buildings with better designs and more insulation so that substantially less energy will be required later when the standard-of-living increases and nearly all of these buildings will have air-conditioning.

However, as the damaged and destroyed diesel engines for generating electricity are repaired and replaced ad hoc, one at a time, any practical options for changing the fuel for generating electricity will be delayed for at least one decade. As private individuals buy new cooking stoves designed for using wood and wood charcoal, it will also be difficult to change to other sources of fuel for cooking over the next few years.

As another example, a new telecommunications system for the Republic (possibly the larger region as well) should be designed from the top down, rather than from the bottom up. With a strategic top-down design, the choices between vertical satellite links versus horizontal micro-wave links can be made in order to achieve the broadest possible coverage for all citizens at the lowest cost. With an ad hoc bottom-up design, each village will try to install its own vertical links to satellites, because of the lack of coordination and planning with other villages. The resulting systems may have compatibility problems with each other and it may be very expensive to expand such an ad hoc system to provide adequate rural coverage. DACO has had independent telecommunications experts available for 6 months, ready to start developing a strategic concept for telecommunications, but has been unable to start this important activity only due to the lack of funding.

As another example, the roofs of about 90% of all buildings in the Republic have been damaged or destroyed and need to be replaced very quickly and inexpensively. The simplest temporary solution is to use corrugated sheet metal, which is one of the worst alternatives for thermal insulation in this hot climate. The ad hoc solution consists of quickly reactivating the old asbestos mine near Berbera, in order to start manufacturing asbestos roofing materials for most of these roofs, using old technology. However, the rest of the World has nearly completely stopped using asbestos as a building material, because of new knowledge of serious health hazards from using asbestos. Therefore, it would be appropriate to quickly review the potential health hazards from mining asbestos, processing asbestos to manufacture roofing materials, installing asbestos roofing materials, and the environmental impact of many asbestos roofs gradually deteriorating in the sun, rain, and wind. If this analysis and strategic planning is not done very quickly, it will be useless because any potential damage will already have been achieved. Such strategic planning should involve the use of architects and materials engineers to seek better alternative solutions with other materials. Since there is a good potential for developing a glass industry, from the high-quality quartz sands available in the Republic, one potential option for investigation might consist of developing spun-glass construction materials for better insulation. Since the Government could easily become a net exporter of cement, pre-cast concrete slabs could also be considered for use as roofs.

The current overall economic strategy is to try to re-establish the primarily nomadic society, with modest amounts of technology, to achieve a higher standard of living for the nomads as well as other citizens. Therefore, there is a strong emphasis upon resettling refugees and displaced persons in rural areas, rather than in villages or cities whenever feasible.

However, the total population of the former Somalia (North and South) grew from about 1.5 million to about 9 million people over the past 30 years, despite a civil war that probably killed nearly 1 million people. This seems to imply that approximately 500,000 people in the former British Somaliland, primarily nomads, lived in equilibrium with their environment 30 years ago. We urgently need to establish how many nomads this same environment can potentially support today, even with some minor improvements in technology. It seems likely that it is not technically feasible to allow 3 to 4 million or more nomads to re-establish a nomadic existence in the new Republic of Somaliland. Since approximately 50% of the population is 18 years old or less, a modest improvement in food and medical services is likely to lead to a rapid population explosion.

The Government needs to study the long-term patterns of rainfall, the amount of vegetation that can grow with this rainfall, the number of animals that can live on this production of vegetation, and the number of people who can live as nomads with this number of animals. The Government needs to do the same analysis for farming and then to determine the optimal mixture of nomadic and farming activities on this land with its hot arid climate. Perhaps the Government already needs to be considering resettling a still unknown fraction of the refugees in villages and cities in order to prevent overgrazing by too many nomads in the countryside. If so, the Government will need to quickly develop feasible concepts for how the residents of villages and cities will be able to support themselves. At the moment, all policy is necessarily short term, to get the over 50% of the population resettled as quickly as possible somehow and no long-range strategic planning is possible, due to the lack of any funding for this purpose.

2.4 Regional Cooperation

The citizens of the Republic of Somaliland and their leaders are very concerned about the continued fighting and chaos in the former Italian Somaliland. Continued fighting in Bosaso, just across the border in the North of the former Italian Somaliland is particularly distressing and potentially disruptive for the Republic of Somaliland. These citizens are particularly concerned about the lack of protection for the basic human rights of Somali people who are unfortunate to be in regions of other clans than their own clan in the former Italian Somaliland, even just across the border. (There are no longer any serious problems of this type in the Republic of Somaliland.) They are also concerned about the regional instability due to this continued chaos in the South, the continued existence of General Barre with a strong private militia in the South, and destabilizing interference in the South by Kenya.

Therefore, the Government would like to offer its services, in cooperation with an independent international partner (such as Germany, Austria, Switzerland, Benelux countries, or Scandinavian countries), to mediate peace among the different clans in the South. Using their own model of reconciliation first followed by forming a new Government, which has been very successful in the North, in contrast to the model of forming a new Government first and attempting reconciliation afterward, which has failed in the South, they feel that they have a practical understanding of the clan conflicts and potentials for solving these conflicts that could be very useful.

The Government appreciates the initiative by the new Government of Eritrea to mediate in Mogadishu. Regional initiatives and assistance in mediation will certainly play a major role in any practical solution for this local problem. The Government is willing to support the initiative of Eritrea as well as to participate in a larger regional initiative including Ethiopia and Djibouti.

However, as long as the international community refuses to recognize their own successful model and continues to insist that they surrender their hard-won new democracy, decentralized form of government, and free market economy in order to subjugate themselves to a new unstable centralized dictatorship and general chaos in Mogadishu, they are in a weak position to assist in the South. They also need some financial support, if only for travel expenses, to be able to make an effective contribution towards negotiating peace in the South. It is ironical that the rest of the World is now considering radical solutions, such as sending foreign military forces to the former Italian Somaliland in order to create peace there, as well as possibly to attempt to forcibly reunite the former British and Italian Somalilands (which would inevitably restart the old civil war), while ignoring the simpler and less expensive local solutions that are available for solving this problem.

The new leaders in the Republic of Somaliland are aware of the New World Order that is actually evolving worldwide and are trying their best to make positive contributions themselves to this New World Order within their own region. They interpret the real New World Order as a two-step process. In the first step, artificial entities, that were put together from the top down, are disintegrating into smaller and more homogeneous entities, in order to relieve ethnical, clan, and religious tensions. In the second step, these smaller entities reunite voluntarily from the bottom up in larger regional frameworks. The outstanding model of this process is the evolution of the European Community.

In this context, it is difficult for the Government of the Republic of Somaliland to understand why the Western World insisted upon returning to the Old World Order in both Yugoslavia and the Soviet Union, by trying to do everything in their power to prevent these two conglomerates from disintegrating in the first step of our New World Order. However, our Old World Order failed again in Yugoslavia and the Soviet Union, where the dynamic forces of our New World Order prevailed, allowing them to disintegrate, relieve internal tensions, and provide the basis for new voluntary regional integration.

The first stage of our New World Order, for the separation of the Democratic Republic of Somalia back into the former British and Italian Somalilands actually occurred long before the separation of Slovenia and Croatia from Yugoslavia or the separation of the various Republics from the former Soviet Union. The rest of the World is now recognizing the reality of our New World Order in Yugoslavia and the Soviet Union, by recognizing Slovenia, Croatia, and the many republics of the former Soviet Union. However, the World still refuses to recognize the Republic of Somaliland, even though they were first in this process of our New World Order. In fact, the Republic of Somaliland has been trying to move forward towards regional integration within the Horn of Africa, as the second step of our New World Order, before the new republics in the former Yugoslavia and Soviet Union started to move towards new regional integration. But the rest of the World is still blocking regional integration in the Horn of Africa while already promoting a new regional integration within the former Soviet Union.

Mr. Abdulkarim Ahmed Guleid was one of the first of the new leaders in the Horn of Africa who have had a dream for several years of creating a "Common Market" of East Africa, along the model of the European Community. (See "A Strategy for the Future of Somalia", Abdulkarim Ahmed Guleid, 7 December 1990) They see this as the second phase of the two-step process of our New World Order. They see the opportunities for cooperation due to common agricultural and nomadic societies. They see the need to negotiate with large international markets as a larger integrated market themselves.

DACO has been working on preliminary strategic concepts, together with the Government of the Republic of Somaliland, on ways to facilitate regional cooperation in the Horn of Africa. In particular, the very similar political and economic situations in the Republic of Somaliland, Ethiopia, and Eritrea present many very interesting opportunities for very pragmatic cooperation in solving their common problems together -- even before large political agreements may be feasible. One conclusion is that the sequence of steps towards regional integration will probably be much different in the Horn of Africa than in Europe, because of the different starting points.

Examples of areas where such regional coordination and cooperation is feasible immediately include:

• education,
• central banks and currency,
• customs union,
• joint marketing of common products,
• regional development funds,
• telecommunications,
• transportation, and
• defense.

As one example, DACO has already developed a concept for creating an "East-African Educational Institute" -- to concentrate technical resources in order to develop new curricula and textbooks for the Republic of Somaliland, Ethiopia, and Eritrea. One aspect is that it will be far less expensive to concentrate the library resources and technical know-how in one center for creating new curricula and textbooks than to create separate and parallel operations in each of these countries. Another aspect is that it will be possible to achieve regional educational curricula and standards that will provide greater mobility for students, teachers, and administrators within this region. The new Government in Ethiopia has already expressed a strong interest in this concept. The Government in the Republic of Somaliland needs the basic financial resources to be able to negotiate and coordinate with its neighbors in such areas

As another example, the European Community is having great difficulty in converting to a single Central Bank and single currency. Due to the lack of currencies and immediate need to establish or strengthen central banks in the Republic of Somaliland and Eritrea, as well as to strengthen the Central Bank and currency in Ethiopia, there may be an interesting opportunity for at least these 3 countries to immediately create a new EACU (East-African Currency Unit). This could also include Djibouti, as well as the former Italian Somaliland as soon as they solve their internal problems. Since the Djibouti Franc is already tied to the French Franc and the French Franc is already tied to the ECU, it would only be natural that a new EACU would also be tied at least loosely to the ECU. (See "A Proposal for Using the ECU as the Basis for a New Somali Currency" Jack L. Davies, 12 January 1991) Again, the ability of the Government of the Republic of Somaliland to cooperate regionally in this area is limited by its lack of financial resources to implement the strategies and goals that it has already set for itself.

Instead of developing the port of Berbera and the airport at Hargeisa within the framework of a national transportation policy, it makes much more sense to do so within the framework of a regional transportation policy. Berbera has traditionally served as an international port for Ethiopia, which implies the need for improving roads and possibly constructing a railroad from Berbera to Dire Dawa (as a connection to the current railroad between Addis Ababa and Djibouti). Ports on the Horn of Africa could also potentially develop their capabilities for redistributing cargoes of international transport ships, at the triangle between routes through the Suez Canal to Europe, to Asia, and to the East Coast of Africa.

For airports, it makes sense to develop a regional hub concept that also provides a convenient refueling and transfer point for long-range intercontinental flights between Europe, Africa, Asia, and Australia. It could also be interesting to expand Ethiopian Airways into a single East-African Airways, rather than to try to reflate the grounded Somali Airlines or to create a new national airlines for Eritrea.

In the barter and cash societies of nomads moving relatively freely throughout this region, without written auditable records of sales transactions, it is extremely difficult to collect large amounts of taxes efficiently either as income taxes, added- value taxes, or property taxes -- the three main sources of tax revenues in Europe. Therefore, it has been traditional to rely more heavily upon import and export taxes at international ports as a major source of tax revenues in this region. Differences in these import and export taxes lead inevitably to large smuggling activities across the local borders and tensions between these governments. Therefore, it could be particularly useful to work towards a regional Customs Union, that applies uniform import and export taxes at all international ports and airports -- to eliminate temptations and incentives for smuggling.

As another example, the Government has consolidated the former militia of the liberation movements into its own military and has already demobilized many of these soldiers. It would also like to quickly demobilize approximately another 75% of its military forces, but lacks the financial resources to speed demobilization at this time. It has quickly shifted its own military strategy towards maintaining a competent reserve force, that could be quickly mobilized to thwart any true aggression from outside, but would be extremely difficult to mobilize for an offensive action against its neighbors. This is an important gesture of goodwill towards its neighbors, that has already greatly reduced tensions between the Republic of Somaliland and both Djibouti and Ethiopia. This has laid the foundations for starting regional integration with both Djibouti and Ethiopia. There are many opportunities for continued cooperation for regional security.

In summary, the Government of the Republic of Somaliland is willing to cooperate actively towards greater regional integration within the Horn of Africa. However, it needs to strengthen its own financial basis for operating effectively, as proposed here, in order to become an active participant at this critical moment.

2.5 International Cooperation

The Government of the Republic of Somaliland would like to play a responsible role in the international community. As examples, it would like to join the ITU in Geneva for international coordination of telecommunications and the allocation of radio frequencies. It wants to join the UPU in Berne for cooperation in re-establishing its postal system. It wants to cooperate in the areas of copyrights and patents, human rights, and non-proliferation of nuclear weapons. However, it lacks the financial resources to send representatives to visit these international organizations or the resources within the Government itself to analyze the complex procedures for applying for membership in such organizations and signing international treaties. A Government with an average monthly budget of less than 130,000 DM can not be an effective player on the international scene, despite the best of intentions.

3 Goals of Individual Ministries

Following is a brief summary of the priorities that individual ministries of the Republic of Somaliland currently have. Since DACO has not yet received funding to visit this new Government, much of this tentative information is indirect and we present it reluctantly here for this reason. Most of this information was obtained by Mr. Abdulkarim Ahmed Guleid when he visited the Council of Ministers briefly in Hargeisa at the beginning of December 1991.

One of the major objectives of Sub-Project 1 (General Consulting) is to provide financing so that DACO can visit the Government and discuss the situations and priorities within each Ministry in substantially more detail -- as the basis for making constructive contributions to strategic planning. By documenting the current priorities and problems within each Ministry, we hope to achieve a sound basis for cooperation between this Government and other Governments as well as non-governmental organizations.

3.1 Ministry of Justice

The Honorable Ahmed Ismail Abdi, Minister of Justice is particularly concerned about creating a new legal system that does not contain the same faults that led to international criticism of the former legal system. He is trying to create a legal infrastructure for supporting the new free-market economy and the operation of private enterprises within this economy. He has approached many Somali experts who are officials in various international organizations for free advice on how to achieve these important goals. However, he has no funds to pay international experts for professional advice in these areas. He also has a large responsibility for maintaining law-and-order in the new decentralized system.

3.2 Ministry of Resettlement & Reconstruction

The Honorable Mohamed Abdi Ali Bayr, Minister of Resettlement and Reconstruction, has placed a high priority upon obtaining assistance in planning the repatriation of refugees. This includes

• interviewing refugees in refugee camps outside of the Republic to determine where they want to go and what they want to do,
• preparing resettlement areas for receiving refugees before they actually arrive, and
• developing strategies for rehabilitation of refugees and integrating them into the social and economic structures of the Republic.

He works actively with the Minister of Public Works for reconstruction of the damaged and destroyed buildings.

3.3 Ministry of the Interior

The Honorable Suleyman Mohamed Adan, Minister of the Interior, has placed a high priority upon establishing a decentralized system for maintaining law and order. This involves relying upon local security and police forces, under the control of local citizens (in contrast to the national police forces under the control of the dictatorship in the past). He is also concerned about demobilizing the military forces, training the remaining military forces, and providing them with a new peacetime orientation. He also agrees with the various suggestions that DACO has made concerning a national census, ID cards, driver's licenses, etc.

3.4 Ministry of Foreign Affairs

The Honorable Yusuf Sheikh Ali Madar, Minister of Foreign Affairs, has been traveling in Europe and North America constantly since last Summer. He has been trying to achieve recognition and to obtain bilateral assistance for his Government. He is particularly interested in achieving regional cooperation as well as harmonious relationships both regionally and internationally.

3.5 Ministry of Finance

The Honorable Ismail Mohamoud Hurreh, Minister of Finance, has placed a very high priority upon quickly reflating the economy and achieving a tax base for obtaining larger revenues for the Government. Within this concept, he is particularly interested in coastal development, clearing and rehabilitating the harbors, and developing the small ports of Zeila, Lag Han, Kal-Scheikh, Mait, and Las Khoreh.

As a second main project, he is working on expanding the airport at Hargeisa so that it can accept Boeing 747 aircraft, upgrading its telecommunications and safety capabilities to international standards, and adding fueling and stop-over facilities for commercial aircraft. He sees this development within the larger regional and international concept of this airport becoming a major stop-over and refueling point between Europe and the Far East.

As a third main project, he would like to add modern container-handling capabilities at the port of Berbera. Regionally, he would like Berbera to develop into the major container port for Addis Ababa in Ethiopia. Internationally, he would like Berbera to develop into a key port at the triangle of sea shipping between Europe, East Africa, and the Far East. He would like to organize the port of Berbera as an autonomous port authority and obtain training for the port managers. He would also like to expand fishing activities and cold-store capabilities to support increased fishing activities. The World Bank did an assessment for upgrading the port for a few 100 million dollars a few years ago, but General Barre refused, since he only wanted to develop ports in the South, such as Kismayo.

As his fourth major concern, he would like to establish a venture-capital fund, along the lines proposed by DACO. He is also seeking seed capital from international sources to complement venture capital for starting and expanding private enterprises.

As his fifth major concern, he would like to improve upon the existing Central Bank and create a new currency.

As his sixth major concern, he is active in trying to privatize as much of the public sector as feasible.

He is also concerned with improving the accounting system for the Government, as one of the pre-requisites for the Government to obtain funds directly from international sources.

3.6 Ministry of Planning

The Honorable Jame Rabaleh Good, Minister of Planning, is particularly interested in increasing the level of strategic planning, particularly for the areas of energy, transportation, and telecommunications.

3.7 Ministry of Transportation & Communications

The Honorable Mohamed Abdi Begsi, the new Minister of Transportation and Communications, has placed a high priority upon re-establishing telephone capabilities for both the Government and the private sector. He has been cooperating with Djibouti, which is donating some cable and supplies.

He is also working on re-establishing a postal system. They now have post-office boxes available again, but no connection with the international postal system yet. As an interim solution, they are cooperating with a private company in Djibouti, that cooperates with DHL worldwide.

He is also concerned with the development of airports and ports.

3.8 Ministry of Commerce & Industry

The new Minister of Commerce & Industry is interested in quickly rehabilitating existing industries, such as

• the fishing cannery at Las Khoreh,
• grain mills at Hargeisa and Burao,
• cement factory near Berbera, and
• the asbestos plant near Berbera for manufacturing roofing materials.

He is also strongly interested in privatizing the public sector as quickly as possible.

3.9 Ministry of Livestock

The Honorable Bashe Ali, the new Minister of Livestock, would like to obtain 10 mobile veterinary teams plus 5 laboratories and 5 clinics. He is also seeking drugs to combat various parasites. He would also like to construct marshaling and quarantine yards at the port of Berbera, for holding animals before exporting them (shelter, water, and food).

3.10 Ministry of Agriculture

The Honorable Saeed Mohamed Nur, Minister of Agriculture, has placed his priorities upon developing programs to provide farmers with tropical seeds, tools, tractors, spare parts, food until they harvest their first crops, and diesel-driven water pumps and pipe. He would like his Ministry to acquire the items and then to use a flexible combination of sales at reduced prices and donations according the abilities of farmers to pay for them in getting started again.

3.11 Ministry of Fisheries and Maritime Affairs

The Honorable Hassan Awale, the new Minister of Fisheries and Maritime Affairs is strongly interested in the proposals from DACO for licensing the rights for international vessels to fish in the territorial waters of the Republic, establishing a private Coast Guard to enforce the use of such licenses, and creating a legal framework for this project. He has not yet been able to take concrete actions to start this project. He is also interested in protecting these territorial waters from ecological damage, such as by oil spills, and to prevent illegal over fishing of some species of fish.

3.12 Ministry of Minerals and Water Resources

The Honorable Mohamed Ali Ateeye, Minister of Minerals and Water Resources, is interested in starting systematic exploration for petroleum and gas, both off-shore and on-shore. This project will include creating an appropriate legal infrastructure, geological maps (see our National Library project), conducting geological surveys, prospecting, and obtaining laboratory facilities for testing.

3.13 Ministry of Health

The former Minister of Health died recently from natural causes and has not yet been replaced. This Ministry would like to play a more active role in allocating specific health tasks to specific organizations. It would like to develop a standard list of drugs for all international organizations to use -- to eliminate the problems caused by using donations of outdated and prohibited drugs. It would also like to establish a proper pharmaceutical system in each hospital, including bookkeeping, inventory control, timely re-ordering, etc.

3.14 Ministry of Education

The Honorable Abdirahman Aw Ali, Minister of Education, likes our proposal for creating a National Library. He needs technical assistance for planning education for the refugees. He needs both money and materials (roofing, chairs, tables, blackboards, writing materials, textbooks, etc.) for restarting the primary and secondary school systems. He has a surplus of unemployed teachers and needs both cash for salaries and school buildings in order to re-employ them.

3.15 Ministry of Defense

His Excellency, Hassan Issa Jama, Vice President, Acting President, and Acting Minister of Defense, has placed a high priority upon continuing the demobilization of the military forces. At their peak, earlier this year, they had a strength of about 60,000 and have already been demobilized to about 40,000 men. He would like to demobilize further to about 10,000 to 12,000 men. He needs new uniforms, in order to distinguish who is still an official soldier and who is just still carrying a gun. He needs civilian clothing, such as shoes, to trade for weapons in order to demobilize the many young soldiers no longer attached to any military units. He needs communications equipment and training in order to improve operational control over the reduced military forces. Since the Government has no money for salaries, he needs at least food, as the equivalent of salaries, to keep these soldiers content.

3.16 Ministry of Public Works

The Honorable Mohamed Aateeye Fariid, Minister of Public Works, is concerned with the subjects of urban planning and housing as well as construction and repair of roads. In particular, he needs equipment and spare parts.

3.17 Ministry of State for the Presidency

We do not know of any needs.

3.18 Ministry of Information and Tourism

The Honorable Dahir Warsame, Minister of Information and Tourism, has not yet expressed any needs to us. However, there is a large lack of public relations to explain the situation within the Republic to the outside World and this will require more funds than are currently available. There is also a need for formulating a national policy on tourism. The Republic does have a large and generally unused coastline that would be physically attractive for tourists. However, the infrastructure of international airports, hotels, public transportation, etc. is still missing to support tourism. It is likely that the Republic will not be interested in developing mass tourism from Europe, but may want to focus upon more limited tourism from neighboring Islamic countries plus selective tourism from the Western World, focused upon experts who visit not only for vacation but also to interact professionally with local experts.

4 Sub-Project 1: General Consulting Services

In coordination with the Government of the Republic of Somaliland, DACO places a high priority upon finding funding for the general consulting services that we have been providing over the past 2 years free-of-charge at our own expense. DACO has obtained the services of appropriate independent experts for most topics under discussion with the Government at the moment, but can not use the services of these experts as long as DACO has no funds to pay them.

With a very high priority, DACO would like to spend nearly one man day with each Minister and his aids, reviewing their tasks, the information that they need for planning, the information that they actually have available for planning, the results that they have achieved in implementing their plans, the problems that they need to overcome, and their priorities. This more-detailed information will serve as the basis for defining the priorities for the rest of the general consulting services that the Government has requested from DACO. DACO has been discussing a wide variety of technical topics with the Government over the past few months and expects that the Government will want DACO to explore these topics in greater detail, using additional independent experts available to DACO.

Our consulting services will focus upon

• strengthening democratic institutions and the free-market economy,
• strategic planning, and
• identifying and acquiring appropriate technology and know-how.

Consulting services for strengthening democratic institutions and the free-market economy will consist of providing technical and legal assistance from experts to aid the officials and legislators of the Republic in

• drafting a new Constitution,
• drafting legislation for implementing a workable free-market economy, such as laws to regulation the registration of limited-liability companies and joint ventures as well as leasing exploration rights,
• working out the details of a new independent judiciary,
• implementing a central bank that can develop effective monetary policies, etc.

Consulting services for strategic planning will provide appropriate know-how and assistance to the officials of the Government in developing strategic plans for the following areas

• population control and appropriate vocational education,
• education,
• energy,
• telecommunications,
• transportation,
• development of natural resources, etc.

Whenever appropriate, these strategic plans will be coordinated regionally with the matching strategic plans of neighboring Governments. As these strategic plans evolve, these consulting services will include assistance in defining individual projects for implementing them, creating international invitations to tender bids, evaluating bids, and management of projects. All decisions will be made by the officials and legislators of the Republic. Our consultants will provide them with technical support and know-how for making sound decisions.

DACO has good international contacts and experience in seeking specific technical know-how and products for specific applications.

In order to start performing these general consulting services quickly with more intensity, to assist the Government in strengthening its capabilities as a Government, DACO is requesting funding for a fixed total budget that we can allocated flexibly to individual topics according to the priorities that evolve from the Government. As a reasonable start, DACO would like to obtain a funded budget for the first six-month period immediately and to define a funded budget for the following six-month period later, based upon our experience during the beginning of the first six-month period.

Assuming 120 working days per six-month period and an average of 5 consultants working in parallel per available working day, we would like to budget 600 man days of consulting services for the first six-month period. Assuming an average of 8 consultants working in parallel per available working day, we would like to budget 960 man days of consulting services for the second six-month period.

Because of the shattered infrastructure within the Republic and the lack of public transportation within the Republic as well as into and out of the Republic, it will be necessary to provide more support for individual consultants than would be the case if they were working under more normal circumstances. For this reason, it is appropriate to channel the services of individual consultants, either free-lance or from a variety of other companies, through one single consulting contract. In this case, DACO will develop appropriate offices, transportation and communications capabilities in the Republic for supporting these consultants. For this reason, DACO will charge a fee for home and local office expenses equal to 35% of the nominal fees and expenses.

Recommended Budget for First 6-Month Period:

Recommended Budget for Second 6-Month Period:

These recommended budgets are extremely flexible and are subject to negotiation with potential donors. If smaller sums are offered, it will be possible to work within any such smaller budget constraints, by simply providing less consulting services, according to the priorities established by the Government.

DACO is currently developing concepts for creating a local regional consulting company and will therefore retain an option for transferring these consulting services to this new company if appropriate. This new company would be focused upon the region of the Horn of Africa. It would hire local experts as consultants whenever feasible, both to lower the average costs of consulting services and to provide a better transfer of evolving technical experience within this region.

5 Sub-Project 2: Infrastructure Package

Since July 1991, we have discussed the possibilities for shipping one or two containers full of various supplies and equipment to the Government in Hargeisa in order to drastically improve the infrastructure of the Government for working effectively as a government. The original concept was for a one-time project to provide the Government with a one-time inventory for starting operations. However, in order for these supplies and equipment to be effective, it will be necessary to provide at least some one-time renovation of buildings and training activities. It will also be necessary to provide the Government with cash subsidies to be able to operate effectively with this improved infrastructure. Therefore, this concept has evolved into a more-complex concept. We have defined an infrastructure package here as one large package with various components for the first six-month period and a smaller package for the second six-month period.

5.1 Buildings

There are reasonable buildings and office space available to all levels of the Government in nearly all locations except for the capital of Hargeisa, which has suffered a destruction of approximately 90% or more of all buildings. Therefore, the Central Government, which is located primarily in Hargeisa, as well as both the Regional Government with Hargeisa as its center and the Municipal Government of Hargeisa suffer from a lack of adequate buildings and office space to function properly. Therefore, this one-time infrastructure package will focus upon creating

• adequate buildings,
• supply of electricity, and
• limited local telephone services

for all 3 levels of government in Hargeisa. (The US Government is providing funding for a project to restore the supply of water in Hargeisa.) In addition, it will be necessary to renovate government-owned houses in order to provide adequate housing for Government officials and employees.

Our current estimates, in coordination with the Government, for this sub-project are as follows:

The total above is only a very preliminary estimate, for planning purposes. As soon as DACO receives funding to conduct a detailed local investigation, it will be possible to estimate these requirements more precisely and to obtain more precise cost estimates from potential suppliers. It is important to note that these costs are all costs for partially repairing the damages to infrastructure that existed previously, but was destroyed by the former socialist dictatorship -- "misusing" foreign aid for this purpose. It will always be difficult to determine how much new foreign aid will be appropriate to compensate for the damages caused by the foreign aid to the former dictatorship over the past decade. The costs for partial reconstruction proposed above correspond to compensation for about 0,2 % of the total damages caused by foreign aid to the dictatorship in Hargeisa alone. (This city had a population of about 300,000 when it was destroyed and one could estimate the total value of this destruction at about 5 or 6 billion DM, i.e. about 20,000 DM per resident.)

Concerning office space, the Government has only partially renovated a few buildings within one complex with an area of about 4 square kilometers. As an example, only one of these buildings has functional toilet facilities. There are other partially damaged and unused buildings within the same complex that could be used if they were renovated. There is an acute shortage of office space now and the number of personnel is increasing rapidly. Therefore, we propose renovating enough empty damaged buildings in this complex to provide adequate office space, to include completing the renovation of partially renovated buildings.

Concerning government-owned houses, the Government needs to provide housing for many of its employees and already owns houses for this purpose -- that must be renovated before they can be used. The Government is currently paying salaries of much less than 100 DM/month on an average to its employees. Due to the approximately 90% destruction of all buildings in Hargeisa, the few usable buildings left that are available for rent command very high rents, typically at least 1,000 DM per month. Cabinet Ministers are currently sharing rooms, sleeping on cots. Therefore, it is appropriate to quickly re-install roofs, doors, windows, electrical wiring, toilet facilities, etc. in a reasonable number of government-owned houses as quickly as possible.

Concerning electricity, the Government is currently using small portable generators. However, it appears to be more practical and efficient to restore the Hargeisa electrical-power station than to continue adding more small portable power generators.

Concerning telephones, most of the offices of the Central Government are located within an area of about 4 square kilometers and 25 buildings within this area. For locations outside of this area, it appears to be more cost-effective to temporarily use "mobile" telephone technology to establish trunk connections between fixed private exchanges -- rather than to install cabling at this time. This "mobile" telephone equipment will be usable later, when it is replaced by city cabling in this first application, for spreading telephone capabilities to rural areas. This is a limited approach in order to provide reasonable telephone communications within the 3 levels of Government within Hargeisa and does not yet include telecommunications connections to other cities or the outside World -- which must be added later under a more comprehensive concept for reconstruction of telecommunications capabilities. This more comprehensive concept will be developed, but not financed, under Sub-Project 1 for general consulting activities of this project.

During the first local investigation, under Sub-Project 1 for general consulting, DACO will define this Sub-Project 2 in more detail. We will define what should be done, what can be done by local contractors, what supplies must be brought in from outside, estimate the total costs, and provide a detailed management concept.

The 35% fee for local and home-office expenses includes not only the overhead costs of operating these offices, but also the management costs and costs for negotiating and controlling the various subcontracts, acquiring equipment, etc.

We can only give a very general estimate of 5,000,000 DM at this time for buildings in the second six-month period.

5.2 Motor Pool

The most cost-effective approach for providing the Government with adequate local-transportation capabilities consists of creating a central motor pool. This motor pool will support the transportation requirements of the Central Government (including Ministries, the Supreme Court, and the Parliament), the Regional Governments, and the Municipalities.

The Central Government already owns a maintenance building in Hargeisa which can be used for central maintenance functions. The costs for making this building operational and operating it for 6 months are estimated as follows:

The current estimate of the need for vehicles during the next six months includes:

• 3 mini-buses
• 6 10-ton load carriers
• 8 tipper trucks
• 5 ambulances
• 6 vehicles for custodial services
• 45 4-wheel-drive vehicles
• 45 normal passenger cars

for a total of 118 vehicles. Assuming an average acquisition cost, including delivery, of 40,000 DM per vehicle, this will require a budget of approximately 4,720,000 DM for acquisition alone. DACO will need to investigate whether it is more cost effective to purchase Japanese vehicles in Djibouti or to purchase European-made vehicles in Europe and to pay transportation costs to Djibouti. It would be desirable to use a single supplier of vehicles if possible, in order to reduce the costs of maintenance, spare parts, and training. DACO will also consider whether it is feasible to use an unconventional fuel for this whole fleet, such as a mixture of gasoline and alcohol, as a first step in launching a new energy policy to reduce reliance upon imported fuel.

Following are our estimates for acquiring a reasonable motor pool and operating it for 6 months:

Under Sub-Project 2.1, DACO will define these requirements more precisely, explore various possibilities for obtaining either grants or at least reduced prices, develop a more detailed operational concept, and estimate the costs more precisely. As a very general estimate at this time, DACO estimates a budget requirement of approximately 3,000,000 DM for the second six-month period, which will include the acquisition of some additional vehicles.

For the case where it is not financially feasible to provide adequate transportation, DACO will develop alternate strategies, such as by placing limited motor-pool capabilities under the direct management of a special committee to allocate this limited resource according to national priorities.

5.3 Furniture, Equipment, and Supplies

Approximately 7,600 civil servants at all 3 levels of Government need some kind of office furniture. DACO has a simple, elegant, and efficient design for desks and bookcases that can be constructed and repaired easily locally. This will provide employment opportunities for wood workers and metal workers. Other furniture, such as chairs and filing cabinets, will need to be imported. We estimate an average cost per civil servant at 800 DM. Therefore we estimate a budget requirement for the first six months of 7,600 x 800 DM = 6,080,000 DM

For the second six-month period, we estimate a continued requirement for 800,000 DM of furniture.

The Government will also need conference rooms. At the national level, there is a minimum need for 1 conference room for the Office of the President and Vice President, 1 for each of 18 ministries, 10 for legislators, and 3 for the judiciary. This gives a total of 32 conference rooms for the national level. Adding 20 for the regional level and 15 for the municipal level gives a total minimum requirement for 67 conference rooms.

We propose to equip each conference room as follows:

The white boards will be produced locally, using either plywood or sheet metal and a white enamel paint. Sheet metal would have the advantage that it can also be used as a magnetic board.

We estimate the requirement for supplies (flip-chart paper, paper marker pens, white-board marker pens, overhead-foil pens, replacement bulbs for projectors, etc.) at 500 DM per six-month period per conference room. This generates a budget requirement for 67 x 500 DM = 33,500 DM for each six-month period.

For typewriters, we note that the Somali language uses the Latin alphabet. Therefore, we assume that it will be possible to use the standard US keyboard layout. For requirements using the Arabic alphabet, we suggest using computer word-processing systems with laser printers. We are still uncertain as to whether typewriters should be mechanical or electrical, whether they should use conventional technology or print wheels, etc. Some local investigation will be necessary to define this requirement more precisely.

We estimate the need for approximately 2,000 typewriters at an average cost of 600 DM each. This generates a total cost of 1,200,000 DM for the first six-month period. We estimate a replacement and maintenance cost of 10% = 120,000 DM for the second six-month period. We estimate the costs for materials and supplies, particularly different kinds of paper, at 200 DM per typewriter in each six-month period. This will amount to 2000 x 200 DM = 400,000 DM per six-month period.

The Government does not own any computers or computer equipment at this time. However, many of the officials and civil servants of the Government have prior training and experience in the use of computers -- particularly IBM compatible personal computers. Some of these people own their own personal computers, but the lack of public electricity makes the use of such individual computers difficult at this time.

We recommend using computers for secretaries who type most of the working day. Modern word processing with inexpensive personal computers greatly increases the productivity of such personnel. Since most such personnel will be typing in more than one language, the availability of computer software for checking the spelling and grammar can be very useful for improving the quality of this multi-lingual word processing. We have software available for multi-lingual word processing using mixtures of the Latin, Arabic, and Amharic alphabets within one document. This requires the use of a laser printer or equivalent to handle the different alphabets. The use of word processing eases the exchange of text data and encourages continued use of text files with desk-top publishing to obtain high-quality documentation for government projects.

Initially, we propose using only two different computer configurations. The reason is to simplify the problems of maintenance, spare parts, and training. The larger systems will be configured for desk-top publishing and/or data-base applications. The medium-sized systems will be configured primarily for multi-lingual word processing. The medium-sized systems are configured for use with WINDOWS, in order to provide a standard user-interface for all users whenever possible. Later, it may be appropriate to link many of these computers together in local-area networks. However, initially is will be sufficient to exchange data on floppy diskettes.

It will be necessary to revise these configurations at the time when funding is available, due to the rapid changes on this market. We hope to be able to obtain special discounts for the software, that we can not estimate before we are in a position to actually request offers from suppliers.

For the national level of government, we have estimated a need for 600 medium-sized systems. We estimate a need for 150 systems at the regional level and 200 systems at the municipal level. The total estimated number of medium-sized systems is 950. We also estimate a need for 20 of the more powerful systems for all levels of government.

The medium-level systems are currently configured as follows:

The more powerful computer systems are configured as follows:

We estimate the operating costs as 800 DM per system for six months. This covers primarily laser cartridges and paper, as well as some floppy diskettes. This gives an estimated cost of 970 x 800 DM = 776,000 DM per six-month period.

For the second six-month period, we estimate a need for purchasing replacements and additions in the amount of about 10% of the purchases in the first six months, i.e. 700,000 DM.

Most of the computer systems will serve several civil servants, often using dictating machines for communications between end users and secretaries. For this purpose, we propose using 950 desk-top dictating machines for secretaries at a cost of about 200 DM each. The cost will be about 950 x 200 DM = 190,000 DM. We also propose using 2000 portable hand-held dictating machines at a cost of about 100 DM each for the persons dictating. This cost will be about 2000 x 100 DM = 200,000 DM. The total of these two amounts, for the first six-month period is 390,000 DM. For the second six-month period, we estimate 10% of this amount, i.e. 39,000 DM In addition, we estimate a requirement for supplies, consisting mainly of dictating tapes, at 20 DM per desk-top system. This cost will be about 950 x 20 DM = 19,000 DM per six-month period.

The Government now has only 2 or 3 photocopy machines. As the Government expands and increases its productivity per civil servant, we estimate that it will need approximately 1 photocopy machine for every 10 typewriters or computer systems. Therefore we estimate a need for about 300 photocopy machines at an average cost of about 3,000 DM each. Some will be faster machines with more options for magnification and demagnification and some will be slower and simpler machines. Therefore, some will cost much more than 3,000 DM each but most will cost less than 3,000 DM each. The total cost for this acquisition will be about 300 x 3,000 DM = 900,000 DM for the first six-month period. We estimate a continued need for additional equipment and replacements at 10% of this cost for the second six-month period, i.e. at 90,000 DM. We also estimate an average requirement of 1,200 DM per photocopy machine for supplies, primarily cartridges and paper, for each six-month period. This will cost 300 x 1,200 DM = 360,000 DM.

The Government will need to have different types of official stationary printed. This can be done in Djibouti for an estimated cost of about 170,000 DM.

As a very preliminary estimate, without having performed a detailed calculation of the weights and volumes involved or even knowing the original shipping points, we estimate shipping costs at 200,000 DM for the first six-month period and at 20,000 DM for the second six-month period.

Because of the oversimplifications of these preliminary estimates, we recommend including reserves for additional miscellaneous items in the amounts of 1,200,000 DM for the first six-month period and 400,000 DM for the second six-month period. This will include office supplies, such as staplers, punches, binders, folders, overhead foils, pencils, erasers, etc.

We also estimate the need for a fee of 35% for local and home-office expenses. Since DACO will be buying the technical equipment as a dealer, at discounted dealer prices, DACO will have to bear part of the responsibility and costs for guarantee as well as installation and simple introductory training. Normally, computer dealers apply a mark-up of at least 60% for such overhead costs. This fee will also include the overhead costs for maintaining a local office, with spare parts and supplies, as well as capabilities for providing reasonable maintenance service.

These budget estimates should be considered to be rough estimates for the purpose of defining a reasonable budget, rather than an offer to provide specific quantities of specific items.

DACO recommends that the various supplies and equipment provided in this sub-project should be issued and accounted for by the newly-created GCS (Government Central Stores). DACO will transfer physical control of these supplies and equipment to the GCS and audit the actual disposition of them. Since nearly all of these supplies and equipment are not available locally at this time, nearly all of them will be purchased in Euro