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Did Adam Smith's 'invisible hand' rescue Somali drought victims?

By Bashir Goth - posted Tuesday, 11 April 2017


When disaster hits somewhere in the developing world, the conventional wisdom is to look to international humanitarian organisations for assistance. But not anymore. Not if one takes the recent drought that devastated Somalia as any indication. Instead of the humanitarian organisations, it was the Somali Diaspora remittance and modern mobile money transfer technology that teamed up to provide urgently needed relief aid to the tens of thousands of nomadic people that lost their livelihoods.

In a scenario that is reminiscent of Adam Smith's metaphor of the "Invisible Hand" which explains how free market dynamics make things happen for the greater good of society, the victims of Somalia's recent drought saw that Invisible Hand come to their rescue through ZAAD, the mobile money transfer service, provided by the local telecommunications company, Telesom.

While local authorities of the self-declared state of Somaliland, where ZAAD Service is based, were stretched beyond their capacity to shelter, feed and provide water to the thousands of people displaced by the drought, and the international community was procrastinating in their response, it was ZAAD, which means "journey provisions" in both Somali and Arabic, that inadvertently came to the comfort of the people through its unique and highly efficient mobile-to-mobile money transfer system.

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It was during a conversation with a friend in Dubai that I realised just how vital this service is in saving lives. He had received a call from his nomad relatives who informed him that they had moved from Somaliland's hinterland across the border to Ethiopia in search of water and fodder for the remaining herd of their livestock. As soon as they reached their destination they called him for help and having ZAAD account on his phone he immediately transferred cash to them from the comfort of his office. The family had, without stepping out of their camp, ordered water and food over the phone from the shops of the nearest village and paid for it by phone transfer. This is help arriving expediently and with dignity. No bureaucracy, no complicated logistics, no fees to the beneficiary at the receiving end, no standing in dehumanising lines for food distribution, no poverty porn photos or pity charity of malnourished children, no stereotyping of Africa as a famished and wasted continent through a single story as so poignantly noted by Nigerian writer Chimamanda Ngozi Adichie: "They make one story become the only story."

While technology pundits talk about the possibility of a cashless world, ZAAD Service has already made that futuristic phenomenon a reality in Somaliland, that peaceful part of Somalia which was lately in the news due to DP World taking over its port of Berbera in the Gulf of Aden. Somaliland is not only a pioneer as a cashless country but as one of the leading markets in mobile banking platforms in Africa, a phenomenon that is not only revolutionising the people's concept of money but it also transforms the way urgently needed assistance is provided to affected people in emergency situations.

According to Telesom, which prides itself on being the world's first fully owned African company to provide mobile money, more than 30% of Somaliland population use this transformative service, a fact that has been recognised by Bill Gates of Microsoft and international finance and development institutions for its innovation and customer reach.

People of all walks of life use ZAAD in their daily transactions from purchasing groceries, selling merchandise, paying taxi fares and medical fees in private clinics. Workers even get their wages through mobile money. The youth also use the service by paying school fees and a host of other activities through Aqoon Maal, "harvesting knowledge", a service particularly designed for them,

It is however the rural and nomadic people that find this service such a precious lifeline. They receive and pay money by using this God-sent service without the need to travel distances. Any person coming from the town can bring them their provisions as long as they have paid for it through their mobile phones. While most people in the developed world use mobile phones for information and entertainment, the mobile phone has become a survival device for the pastoralist people in Somaliland and other east African countries like Kenya. And when the drought devastated their livelihood and killed almost all of their livestock which are comparable to their bank accounts, it is their mobile phone accounts that they depended for survival. Just like my friend in Dubai, thousands of other Somalis in the Diaspora provided much needed cash to their relatives wherever ZAAD service was available in the Horn of Africa.

Unlike the conventional way of waiting for humanitarian aid through slow moving bureaucracies of UN bodies and international organisations, it is the mobile money transfer that came faster to alleviate the suffering of the people. This innovative service also proves the often neglected hidden power of immigrant communities in stepping into the void created by retreating donor-fatigue organisations and providing both emergency and long term assistance to their loved ones back home. It seems every immigrant who risked her or his life to cross the oceans and survived the ordeal has now saved a whole family with the meagre money they earned.

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This Invisible Hand technology empowered remittance disproves the fallacy of the fear of immigrants as an economic burden on their adopted countries because the remittances the immigrants send from their hard earned money to their home countries could save significant funds that donor countries use to provide as humanitarian assistance to African countries."

It is feasible therefore that soon immigrant remittances empowered by modern technology may overtake foreign aid for African countries. And while foreign aid was often marred by corruption, immigrant remittance goes directly to the beneficiaries without any middle man to siphon off their share. Hence, its relief impact is immediate and effective. Too, this Invisible Hand technology empowered remittance disproves the fallacy of the fear of immigrants as an economic burden on their adopted countries because the remittances the immigrants send from their hard earned money to their home countries could save significant funds that donor countries use to provide as humanitarian assistance to African countries.

Obviously the mobile money service, whether it is ZAAD or otherwise, and the mobile phone technology it uses are a business made for profit. The objective behind the innovation of the services was purely for giving a competitive edge to the company and realising growth for the business owners. But true to Adam Smith's metaphor it is the Invisible Hand that made this modern technology solve a centuries old problem of how to move humanitarian aid quickly to victims of disaster areas.

It is a development for which the Somali people who benefited from this service at their hour of need are grateful. For they know now that if they considered their livestock as their bank accounts in the past, today they have another more reliable account in their pockets that can save both their lives and their livestock.

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This article was first published on Gulf News.



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About the Author

Bashir Goth is a Somali poet, journalist, professional translator, freelance writer and the first Somali blogger. Bashir is the author of numerous cultural, religious and political articles and advocate of community-development projects, particularly in the fields of education and culture. He is also a social activist and staunch supporter of women’s rights. He is currently working as an editor in a reputable corporation in the UAE. You can find his blog here.

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