economics of major international summit being held in Somalia.
A simple interesting study conducted by the students of the University of Somalia on the economic impact of the IGAD Summit on its host city, Mogadishu. In my view, it was a groundbreaking study in that it set out a basic framework of analysis The study estimated impacts across four “elements” – direct economic impact, tax revenues generated, employment generated, new ecomonic deals signed were generated.
The latter is probably the easiest to observe and quantify of these four. Yet, one of the key criticisms against it was that it did not adequately account for the “loss of business” aspect of a major event like this (due to road closures, traffic restrictions, shop and office closures, etc during the time of the event).
Two important caveats are also important to note. Firstly, the study was conducted ex-ante. The actual outcomes may have been different to those initially estimated, so an ex-post evaluation could provide instructive insights. Secondly, and probably more importantly, the study was commissioned by the government committee tasked with organizing the Summit, so questions may arise of its objectivity.
Another study conducted by a group at the University also looked at ‘Economic Benefits of Hosting the IGAD Summit’. In this study, the authors note the following possible benefits:
1) the immediate, visible short-term stimulus of higher spending at hotels, restaurants and shops; creation of temporary jobs;
2) longer-term economic benefits such as increased tourist traffic and investment resulting from increased global name recognition thanks to media and advertising coverage;
3) new, permanent, public infrastructures and upgrades; and
4) the training for security forces and other first responders to prevent and respond to mass emergency events, such as terrorist attacks, infectious disease outbreaks, ….
I think these four resonate very clearly and to a great extent with the other host cities of a similar summits.
Interestingly, the authors assert that “the benefits are much greater for Somalia because it lacks the global visibility and infrastructure that the capital cities of the major economic powers have”, whom ultimately Somalia wants to compete with.
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