Commodity import program II, commodity import program III

The evaluation covers the period 8/83-7/87. The CIP"s have had a positive impact on the Somali economy, helping to ease severe balance of payment problems, finance productive capital and intermediate goods, and strengthen the private sector. The CIP"s have also promoted economic reforms to: (1) reduce government employment, (2) introduce efficient import procedures, and (3) establish private trade organizations. However, performance fell short in several regards. Only 48% of CIP foreign exchange was allocated to the private sector, far short of the target (85%). In the end, the need to provide a quick infusion of foreign exchange to ease balance of payments problems was much more important to the Governent of Somalia (GOS) and USAID/S than was the private sector objective. Moreover, although local currency generated by the CIP"s was to be used primarily for policy reform and agricultural development projects, these funds have been used mainly for non-agricultural projects and very little for policy reform. In general, the policy dialogue agenda was too ambitious and the pace of reform has not proceeded as rapidly as anticipated. GOS and USAID/S management of the CIP was generally effective, except for inadequate tracking and documentation of local currency allocations. The USAID/S CIP Committee agreed that the programs would have fared better if more emphasis had been given to the private sector than to conditionality and if the latter had been more realistic and enforced. The Committee also felt that: (1) given the Somali context and CIP objectives, CIP"s are not a fast-disbursing mechanism; (2) A.I.D./W interference in the allocation of CIP funds proved to be a negative factor; (3) CIP procedures for suppliers are far too complicated (requirements to submit forms should be eliminated or greatly simplified); and (4) the participation of U.S. suppliers in the CIP was limited by price factors, failure of suppliers to respond to pro forma requests, the small quantities requested by Somali importers, and the unavailability in the United States of some of the commodities required for Somali industries. As for the evaluation, the Committee found it too negative in assessing the Mission tracking system and too positive in stating that the CIP"s have set the stage for an active private sector Chamber of Commerce.