Introduction
An election is a formal and prearranged choice by a vote of an individual for a political office or other position. Elections had existed long. It is one of the principles of the democratic system. Holding regular elections in democratic nations is indispensable. These regular elections pave the way for the peaceful transfer of power which creates a better social life and sound climate for businesses to grow. Today’s world is a business world. Business-related topics overshadow the major summits of the world’s most powerful nations. As people’s trades progress, the lives of society get better. Hence, one major aspect that impacts commerce is elections. Elections have long been the major determiner of a country’s economic condition. Universally, elections can provide a business-friendly environment. Presidential candidates become either the driving force for business to grow or a reason to shrink. For instance, in election times in the United States, presidential candidates’ promise gives hope for business to advance or shrink. In almost every election in the US, business issues are the major talking point. These issues include whether the taxes should be high or low. For instance, US media make money when elections are underway. Oftentimes, elections create hopes for the betterment of commercial development and the inclusive economy of countries. Elsewhere in the world, election disputes create chaos and disagreements between governments and antagonists. For instance, Venezuela held its presidential elections in 2018 which gave a new term to the reigning president, the elections were rebuffed by the opposition and overseas countries. As a result, violent mass demonstrations and political unrest spread in the country. In the end, these controversial elections resulted in a decline in the business environment. Likewise, the 2007 general elections in Kenya ended up violent after the opposition rejected the results. The political crisis sparked by the election results led to Kenyan businesses’ massive looting, destruction, and burning down of numerous businesses.
Unquestionably, elections have both ups and downs in the overall economy of any country, and particularly the advancement of the sound business climate. In Somalia where businesses are booming in the past two decades. Elections have had positive and negative impacts. In the election time, the business sector does see the prospects of the elections and their impact. Apart from the upside of elections, there has always been the downside of elections on businesses in Somalia. Therefore, this essay addresses on The Downside of Elections on Somalia’s Mounting Business.
The Downside of Elections on Somalia’s Mounting Business
In the past two decades, the country has been witnessing mounting businesses across the corners and regions of the country. In Somalia where there is no strong stable government, businesses are not without challenges but do work smoothly frequently. Aside from the shortcoming effect of the pandemic on Somalia’s businesses. There is a downside of elections on businesses. In election time, it is common to bear businesses on the negative effects of the elections. Currency fluctuation is one of the most popular election trends. Somalia’s currency is going to an end. The long absence of the central bank of Somalia and the illegal machines that produce a large amount of Somali shilling have had a great impact on the value of Somali Shillings. When elections roll around, very small businesses always pay a high price. The current dominant currency against the Somali shilling is the US dollar. Whenever an election is approaching, the country witnesses a flood of US cash, particularly in Mogadishu. The dollar puts further pricing pressure on goods and services sourced from overseas. Inside the major cities, the usage of the dollar is normal, but the business people in the regions far from the capital Mogadishu have to pay the heaviest price when it comes to currency fluctuation in the election season. Another disadvantage that negatively affects businesses in the elections is the decline of investment. Many investors lose the confidence to put money into in the election period. Somalia is currently an institution-building era and widespread reconstruction is going on all over the country. The real estate investment is one of many construction projects going on at this time. The country is a fragile state and prone to violence, because of that investors face uncertainty due to election disagreements and clashes. For instance, since the 25th April 2021 clashes between the current government and the opposition leaders over the delayed elections, numerous real estate investors and other businesspeople who execute construction projects have postponed their construction projects. Also, countless ordinary people who planned to construct their houses have been suspended due to fear of election clashes and violence. Similarly, the decline of investment in the elections has affected land purchasing. Land prices always endure a decline whenever the election time is reached. Furthermore, supply chain disruption is common in election times. Because of fear from violence eruption, numerous businesspeople import less than their normal importation. This affects the needed supply in the market. It also causes skyrocketing prices due to this shortage. Somalia is dependent on imported goods more than the local production of goods. Lastly, as the term of the government ends and approaches the election. Some valuable decisions and the approval of precious bills are put off. These postponements of bills affect the business environment. Likewise, Entrepreneurs and business people are well-known to evade taking key decisions during an election year. This is because a transformation in the government may too mean a change in the priorities of the government. Countless times, the policies of a government entirely transform the viability of a project. Businesspersons want to avoid the danger of their projects becoming redundant cheers to regime policies. Hence, they prefer to play the wait and watch the game. This understandably has an undesirable impact on the economy since the economic production, and the jobs which could have been generated are now being deferred.
Conclusion
An election is a formal and systematized choice by a vote of somebody for a political office or other position. Globally, to have some form of elections in every country is essential. They are peaceful means of power transfer. Elections have both ups and downs on the business and overall economic conditions of any country. The upside is that elections provide hope and sound prospects for future business conditions. Hence, the downside includes currency fluctuation in the election year, the decline of investment due to confidence issues, and supply chain disruptions due to uncertainty in the election era.
Ahmed Mohamed Hassan
Head, Political Science Department, SIMAD University
