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I am pleased to join this distinguished panel to discuss a crucial subject—how trade and economic reforms can contribute to peacebuilding. There is no case better than that of Somalia to illustrate the challenges posed by conflict and fragility, and the promise of a better future that can be delivered in part by trade.
The current situation
The US Commerce Department describes the business environment in Somalia as an emerging market with unexploited natural resources and investment opportunities, a market-based economy with high rates of entrepreneurship and a strong business culture, with a young and dynamic population, and a large diaspora investing in the country, bringing skills and knowledge. The World Bank in a recent Report states that Somalia has made progress in creating a business-enabling environment, passing a foreign investment law in 2015 promoting foreign direct investment in the country.
These are no doubt true assessments, but they are obviously incomplete. The European Commission describes the country’s situation in more sober terms, describing a country that has for decades endured prolonged conflict and extreme weather conditions. 90% of the country is under extreme drought conditions, while the rainy season caused massive flooding. Protracted armed conflict with renewed large-scale fighting has had a severe impact on civilians and the movement of people and goods in the country.
The US State Department concurs, writing in similar terms but with more specifics. It details the murder of thousands of people by terror networks beyond government control –"dire circumstances that contribute to life-threatening levels of hunger, disease, and poverty, which drive displacement.”
The Global Peace Index lists Somalia as only three places away from least peaceful country in Sub-Saharan Africa (and 156th out of 163 of all countries ranked from the most peaceful to the least). Transparency International lists Somalia as 180th out of 180 for perceptions of corruption practiced in the country. It is 5th among all countries for the largest economic cost of violence on a per capita basis (Somalia’s per capita GDP is only $644 -- Somalia’s population is among the poorest of the 196 countries ranked).
Somalia’s Future
It is in the face of these conditions that in 2016 Somalia applied to join the WTO, one of 23 countries that have begun this process. Over half of the acceding governments are LDCs and/or fragile and conflict-affected states (FCS).
Trade is to be deployed in aid of peace. This is not a new concept. The theory linking trade and peace, each enabling the other, has its foundation in the thinking of Montesquieu and Grotius among other philosophers. It is captured in the opening words of the founding document for an International Trade Organization (ITO), where the signatories recognize “the determination of the United Nations through trade to create conditions of stability and well-being which are necessary for peaceful and friendly relations among nations.” While the ITO did not come into being, the concept has carried forward in the liberal international order created following the Second World War. The most prominent example of this theory in practice consists of European economic institutions, now brought together in the European Union. EU officials have self-described their endeavor as a peace project from the outset and more recently in the expansion of the EU into Eastern Europe. The concept lives in the African Continental Free Trade Area (AfCFTA), an important part of whose mission is to “silence the guns” by reducing conflict by deepening economic ties and fostering interdependence across the continent.
In the WTO the idea is carried forward in the Trade for Peace Programme. The formula is straightforward. Trade can help lift the standard of living of a country’s people, creating the basis for stability, and further economic growth, enabling a conflict-affected country to achieve and maintain peace.
The WTO’s Trade for Peace Programme grew out of the launch of the g7+ WTO Accessions Group at the 11th WTO Ministerial Conference in Buenos Aires in December 2017. Our moderator, former Liberian Trade Minister, Axel Addy, and I, were there. The Group, as established, consisted of eight g7+ members associated with WTO accessions: three recently acceded members (Afghanistan, Liberia and Yemen) and five acceding governments (Comoros, Sao Tome and Principe, Somalia, South Sudan and Timor-Leste, to which was added Sudan). The Group works to facilitate the integration of fragile and conflict-affected economies into the multilateral trading system, to transition from fragility or conflict to stability and economic well-being. It aims to achieve this through: (i) political engagement and partnerships, (ii) outreach and public dialogue, (iii) research, and (iv) training and capacity building.
Trade does not guaranty peace. It did not between the countries of Western Europe in the first half of the 20th century, giving way to two world wars, and it does not guaranty harmonious relations between the two strategic competitors in today. What it does do is help to achieve peace and maintain it where it is often most needed, and today that is in the case of fragile and conflict affected countries. The ambassadors of these conflict-affected countries have been heard to say on more than one occasion “where there is trade, there is peace”.
With fruition of the efforts that have begun, Somalia can be in the midst of a historic transformation, leveraging trade and economic reforms to rebuild after years of conflict. Its WTO accession process is fundamentally about integrating Somalia into the global economy strengthening national institutions, promoting the rule of law, and embedding transparency and governance into the country’s economic framework. Somalia’s participation in both AfCFTA and the WTO can create a powerful synergy. This dual integration—regional and global—has the potential to unlock new economic opportunities, attract foreign investment, and reduce the likelihood of conflict by fostering greater economic interdependence Somalia of course still faces significant challenges, from rebuilding infrastructure to creating a conducive environment for business and investment. Somalia’s commitment to aligning its trade policies with other trading nations is a crucial step in ensuring that trade reforms benefit all segments of society, including marginalized groups, and contribute to long-term stability.
International cooperation will be essential for Somalia’s success. Donor countries and international institutions can support Somalia by providing technical assistance, capacity building, and investments that align with both economic and peacebuilding goals. Sweden’s leadership in Somalia’s accession working party demonstrates the importance of sustained international support in ensuring that trade reforms are not only implemented but that they generate real peace dividends.
Somalia’s efforts, when successful, will offer a blueprint for other fragile states navigating similar challenges. Somalia’s journey underscores the concept that trade can promote peace, stability, and prosperity. The international community must continue to support these efforts, ensuring that trade is not just a means for economic growth but also a path to lasting peace.
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