The final year of the Transitional Federal Institutions' (TFIs) term of office is due to expire in August 2012. But the transfer of power to a more effective, legitimate and broad-based national authority is threatened by the efforts of diverse Somali political leaders and their supporters to hijack or derail the transitional process – outcomes that would fuel continued instability and conflict, potentially reviving the fortunes of an embattled Al-Shabaab.
While such 'spoiler' behaviour is partly an expression of legitimate political competition, it is also symptomatic of pervasive corruption within the TFIs. Since the collapse of the Somali government in 1991, successive generations of Somali leaders have engaged in corrosive political and economic practices that have aggravated the conflict and helped thwart the restoration of peace and security in the country.
Under the Transitional Federal Institutions, the systematic misappropriation, embezzlement and outright theft of public resources have essentially become a system of governance, embodied in the popular Somali phrase 'Maxaa igu jiraa?' ("What's in it for me?")
A May 2012 report commissioned by the World Bank found US$131 million in TFG revenues unaccounted for in 2009-10: 68 per cent of total recorded income for that period.
The Monitoring Group's own investigations suggest that the real scale of corruption is probably even higher, since millions or dollars of revenue go unrecorded. In other words, out of every US$10 received by the TFG in 2009-10, US$7 never made it into state coffers. In 2011, almost one quarter of total TFG expenditure (over US$12 million) was absorbed by the offices of the three top leaders -- the President, Prime Minister and Speaker of Parliament.
This represented roughly half of the TFG's domestic income and almost as much as the government spends on security in a time of conflict. TFG leaders find other ways to profit from their official positions as well. The Monitoring Group has learned that production and issuance of national passports has been quietly awarded to TFG cronies, resulting in extensive corruption and fraud since 2007. In 2010-11 alone, almost US$1.5 million in passport revenues went missing.
Despite the TFIs shortcomings, Al-Shabaab has suffered dramatic reverses over the past year, experiencing military defeats, the loss of territory and the erosion of its revenue base – setbacks that have exacerbated rifts within the group's senior leadership and may yet push them to the point of rupture. Recent military successes against Al-Shabaab have mainly been delivered by foreign military forces, but international investment in Somali security sector institutions – notably the Somali National Security Force (NSF) is also beginning to produce results on the battlefield. Implementation of a United Nations ban on the importation of Somali charcoal would deliver another grave blow to Al- Shabaab's revenue flow, further undermining its cohesion and ability to engage in armed conflict. But principal importers of Somali charcoal, notably the United Arab Emirates and Kingdom of Saudi Arabia have so far failed to fulfill their obligations to enforce the ban imposed by Security Council resolution 2036 (2012).
Al-Shabaab continues to represent a serious threat to peace, security and stability, not only in Somalia but also on the broader international scene. In February 2012, the group announced a merger with Al- Qaida and has been actively strengthening its ties with other foreign extremist groups, including the Muslim Youth Centre (MYC) in Kenya, the Ansaar Muslim Youth Centre (AMYC) in Tanzania and Al-Qaida in the Arabian Peninsula (Yemen).
Monitoring Group investigations reveal that the MYC in particular seeks to use its sanctuaries in Somalia as springboards for terrorist acts in Kenya, deploying several operational cells to Kenya in recent months for this purpose.
Read full report in PDF here : http://www.medeshivalley.com/2012/07/somalia-leaked-report-implicates-tfg.html (at bottom of article)