Essay on Lending Institutions, Healthcare, and Human Capital in Somalia

Somalia, a country in Eastern Africa, has been experiencing conflict for the last three decades relating to terror groups such as AL-Shabaab. The frequent wars have undermined the structures of governance, caused destruction of property, and institutions. From when the government collapsed in 1991, the resulting conflicts has also destroyed financial institutions, which has made the country vulnerable to external forces. Most of their funding comes from donor aids and grants due to lack of sustainable economic power (Michaelowa &Hanny, 2012). With the external funding and policy support by international organizations such as the World Bank and the International Monetary Foundation, the country is improving economically, socially, and politically.

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The major role of the IMF is to standardize financial exchange rates and relations globally. According to Rogelio (2015), its core mission is to empower the member countries economically by stabilizing global monetary stability and expanding international trade. The organization works together with the World Bank to give vulnerable countries like Somalia short-term and long-term solutions on their economies. While the World Bank focuses on assisting in programs that establish infrastructure and promoting health, IMF assists in economic policies that can solve the various crisis in the country (Michaelowa & Hanny, 2012). Accordingly, the two organizations have launched various projects in Somalia with the aim of empowering the government structure and the social development of her citizens.

The IMF team has worked tirelessly to have Somalia resume good relations with the international community as it helps in rebuilding institutions that got destroyed during the civil war. For instance, a group of staff from the IMF was sent to the country in 2013 to help the new government in planning and making economic policies. Since then, the IMF team has assisted the government in policy formulation improvement of governments structure. Particularly, Rogelio (2015) indicates that they have played a crucial role in setting up systems that have improved Central Bank accounting, governance, and reporting and in supervising other financial institutions. Additionally, the team also have a critical role formulation of fiscal policy, budget preparation, and development of statistical systems. Consequently, there was a rapid improvement of economic conditions by 2014. There was a four percent rise in GDP, accompanied by growth in the livestock industry, revamping of the private sectors such as telecommunications, money transfers and construction (Rogelio, 2015). According to Rogelio (2015), the IMF is projecting a three percent growth in the coming year considering its potential if peace and stability are maintained.

The World Bank has also launched major developments projects in the country with the aim of improving the living standards of the Somalis. It has funded the building of infrastructures such as roads, schools, and bridges. In 2016, it launched the SCORE project worth about thirty million US dollars whose aim is to improve the environment for private investors and to enhance job creation among her citizens (Beth, 2016). The projects aim was strengthening the countrys financial institutions to reduce transactional costs, improve access to finance, and to improve the capacity of the ports management. SCORE also financed the Somali Business Catalytic Fund that was to promote new investments by SMEs to a tune of ten million dollars (Beth, 2016). The investments by World Bank is also attributed to the economic growth of the country in the year 2016. Many jobs have been created owing to the development of the private sector in the US.

The economic development of Somalia is also dependent on the health of the population. According to Frenk (2010), health investments and financing by the government should be addressed regarding their relationship with the economy. For this reason, the government works hand in hand with the international donors to promote health among its citizens and improve the access to health care.

The health expectancy of Somalia is at fifty-one years, way below that of developed countries (Maja, 2014). It has been attributed to the insufficient health care systems. Improved access to health care in Somalia would raise the life expectancy in the country. Healthy population in Somalia ensures that professionals, responsible for economic growth, concentrate on strategies for improving Somalias economy.

A healthy population is also crucial in Somalia to help the country divert resources to the economy rather than caring for the sick. For instance, according to Marja (2014), the country spends too much in treating preventable diseases. Therefore, the government, in conjunction with the World Bank, has established several hospitals in the country. There is also a focus on prevention strategies to reduce the cost of treating diseases.

A healthy population in Somalia also means that economic experts are more focused on re-building the countrys economy. The IMF team always considers the promotion of health among the Somalis in their policy formulations (Rogelio, 2015). Therefore, they have encouraged building and equipping regional hospitals in the country to enable citizens to focus on establishing SMEs.

Encouraging a healthy population has also improved the insurance industry in Somalia. In addition to providing job opportunities, these companies also take part in educating citizens on healthy living. Although health care access and insurance have not been sufficiently established in Somalia, Marja (2014) indicates that there is some little progress after the protracted civil war and entry of the new government.

The government of the day has attempted to improve the health care access in Somalia as it had already collapsed during the civil war. With the help of foreign aid, the government aims to rebuild the sector, albeit challenges such as inadequate health professionals and effective governance. International donors are focused on the development of the biomedically oriented health services in the public sector to reduce the influence of folk healers that are very common in Somalia. Due to inadequate health professionals and facilities in the public sector, the government has partnered with the private sector (Marja, 2014). New health care centers and clinics have been established in several parts of the country in which citizens can have access to care at subsidized rates while the government caters for the rest. For instance, the cost of consultation and treatment is below five dollars (Marja, 2014)). The government has also used the foreign aid in strategies for prevention of diseases such as immunization. According to Frenk (2010), for instance, the number of children fully immunized against measles grew from about thirty percent in the nineties to forty percent and has continued to rise while that of TB rose from thirty percent to fifty percent in the same period. The government has also used the foreign aids in programs for reduction of maternal mortality and rates of HIV/AIDS infections. Such initiatives include free circumcision, training midwives, and educating women. Consequently, the country has the lowest rates of infection in Africa (Marja, 2014).

The international lending institutions are working hand in hand with the present government to restore the economy of Somalia. Accordingly, they have launched various projects in the education, healthcare, and financial sectors to improve the living conditions of the citizens. The government is trying to overcome various challenges brought about by the previous civil war to promote a healthy population ad a way of strengthening the economy.

References

Beth King. (2016). World Bank Launches the Score Project. Retrieved from https://www.worldbank.org/en/news/press-release/2016/05/29/world-bank-launches-the-somali-core-economic--institutions-and-opportunities-score-projectFrenk, Julio. (2010). The global Health System: Strengthening National Health Systems as the Next Step for Global Progress. Retrieved from http://dx.doi.org/10.1371/journal.pmed.1000089Marja Tiilikainen. (2014). Somali Health Care System and Post-conflict Hybridity. Retrieved from https://africansarvi.fi/42-artikkeli/125-somali-health-care-system-and-post-conflict-hybridityMichaelowa, Katharina. & Hanny, Sophia Melody. (2012). The Impact of World Bank and IMF Programs on Democratization in Developing Countries. Retrieved from http://dx.doi.org/10.21.2139/ssrn.1678463Rogelio Zandamela (2015). Somalia Reaches Milestone with First IMF Review in Decades. Retrieved from https://www.imf.org/en/News/Articles/2015/09/28/04/53/socar072915b