Counterfeit money causes violence in Puntland-Government leadership blamed for the cause

By Faysal Gabanow

ADDIS ABABA, Ethiopia- Hundreds marched the streets in Puntland capital to protest the rising inflation in the region; the highest in years where the living costs have doubled, threatening the life of many poverty stricken people.
The inflation worsened after businessmen imported money-printing machines to produce currency notes and distributed to the market by nearly doubling the exchange rate in search for hard currency (US dollars). Local traders also increased the prices and charged their goods on international currencies to avoid any loss.

A clash later ensued where Seven people were wounded in the riot that lasted until a traditional leader in Puntland appealed to the demonstrators to be on restraint, promising them that their concerns would be addressed soon.
Puntland officials had emergency meeting to discuss on the inflation roots. Talking to the media, Puntland president confessed that his administration owns money-printing machines, labeling other privately owned machines as illegal. He also made clear that they closed down one machine and that they are on the way to crackdown on two other machines.

Most Somalis in the country financially depend on their relatives and family members abroad, mainly in Europe, Australia, Canada and the money wiring companies play the role of the banks where people deposit and receive their money. Those “hawalas” pay US dollars to their beneficiaries as the exchange rate is unreliable and cash of Somali shillings. Recently, Puntland president, Gen Adde Muse issued a presidential decree limiting the exchange rate, a brilliant dream accomplished before it goes into effect.
Since the central government of Somalia collapsed in 1991, Somali business and currency rates have been controlled by individuals who mine their own benefits. But when money-printing entrepreneurship came into effect the situation has turned from bad to worse.

Mogadishu’s unmerciful warlords initiated the illicit business. Hussein Aided printed money notes in 1996 and rocked the markets in Mogadishu with Puntland government equalizing him in the northeastern regions.
One hundred US dollars is now equivalent to more than two million Somali shillings. It first reached this peak in 2001, when a counterfeit currency equivalent to millions of dollars was brought to country by an armed businessman allied to the former Transitional National Government of Dr. Abdulkassim Salad. But it is now different from that era as the printing machines were localized more than ever. At least four money Printing machines are said to exist in Puntland only where that business in open for all. Sources in the region have blamed the Leadership of Puntland on owning the machines.

However, this unstable market is a threat to those who don’t receive money from abroad and to the large community of internally displaced people (IDP), who battle for life through odd jobs and mostly live in appalling conditions. Their wages are paid in Somali shilling that worth nothing towards dollar while commodities are priced on dollar.

Driven from their homes by the conflict in the south, IDP’s also don’t have adequate access to the aid supplied by the UN Agencies in the region as many of them were killed while in queue for aid distribution, after armed gunmen and police exchanged fire, where goods were robbed without reaching their respective destination- people in need. Responsible authorities did not take measures to secure them during the aid supply and those escaped with what they had got luckily were targeted in their homes and looted. Locals blamed UN agencies on giving the contract to corrupt NGO’s who supplied it in unsuitable environment.