IIhan Omar endorses Somalia's push for about $5 billion debt relief
WASHINGTON - The Federal Government of Somalia has received a major boost on Tuesday following the acknowledgment of Congresswoman Ilhan Omar on the push for debt relief.
Somalia has accumulated nearly $4.6 billion in public debt, which is now 101 percent than the country's GDP according to IMF's latest figures.
With the debt likely to ruin the country's progressive efforts towards restructuring and putting the economy on the right track, authorities in Somalia are pushing for debt relief.
In a statement, the Minnesota 5th District representative noted the danger of escalating public debt, and subsequently supported efforts to write it off.
"I am thrilled we are able to secure debt relief for Somalia today. Somalia continues to hold a crushing amount of debt which pulls back the economy and keeps millions in poverty," she said.
Omar added: "This debt relief is a major milestone that validates incredible progress that Somalia has made in the past several years."
The United States is the major financier of the Horn of Africa nation, pumping at least $500 million dollars annually in recent years to her economy.
Terming debt relief as "beginning of renewed diplomatic engagement with the country", Omar added that the US has a role to play in pushing for democracy in Somalia.
Human rights, democracy, regional governments, and people, she said, are fundamental pillars that the US should consider supporting.
Omar said, "Debt relief is a step in the right direction and I look forward to continuing to work for the free, peaceful and democratic Somalia."
Under broadly steady-state assumptions, Somalia’s total public debt is expected to increase to around 128 percent of GDP by 2039, IMF says.
Key risks that affect the outlook include external financing, security, and climate,
further highlighting the unsustainability of Somalia’s current debt burden
Kristalina Georgieva, IMF managing director who held talks with Somali Prime Minister Hassan Ali Khaire in October, discussed how to handle the debt relief for Somalia.
"We exchanged views on the importance of securing debt relief under the Highly-Indebted Poor Country (HIPC) initiative as soon as possible," she said.
The debt relief would have a host of positive knock-on effects, including allowing Somalia to strengthen its military and confront al-Shabab, one of the deadliest terrorist groups in the world, which operates out of ungoverned spaces in Somalia.
The U.S. Defense Department has sent elite troops to help train Somalia’s army to combat al-Shabab and regularly conducts airstrikes in Somalia targeting al-Shabab militants.
Debt relief would also help Somalia get its own house in order to eventually ease the burden on U.S. military and U.S.-led aid programs in one of the poorest and least developed countries in the world.
Omar's support is a positive gesture from Washington DC, a move that gives Somalia hope of rebuilding the country which has struggled for decades.
The congresswoman said, "the economy in Somalia affects most of my constituents in Minnesota given that they directly impact in Somalia economy."