Outlook for 2011-12

The imminent addition of 4,000 extra troops to the African Union Mission in Somalia (Amisom) should tilt the balance of power towards the forces loyal to the transitional federal government (TFG) and away from the main Islamist insurgent group, al-Shabab, at least around the capital, Mogadishu. However, the rebels are likely to keep control over most of the country's territory. The lack of clarity about what will happen once the mandate of the TFG expires in August 2011 poses severe risks to political stability. Credible national elections are unlikely to be held in the forecast period. The humanitarian situation is set to remain dire, given recent drought and the Islamists' refusal to allow foreign aid agencies to operate in the areas that they control.

The political scene

In the past quarter the Federal Transitional Parliament and the TFG unilaterally extended their own mandates by three years and one year, respectively. In March the prime minister, Mohamed Abdullahi Mohamed Farmajo, demanded that all UN agencies working on Somalia should relocate from Kenya to Mogadishu. Three Amisom soldiers have been convicted of causing civilian deaths by their actions, which the peacekeeping force has presented as proof that it does not act with impunity. The governments of Uganda and Burundi have announced that they will each send an extra 2,000 troops to join Amisom, lifting the mission's total number of peacekeepers to 12,000.

Economic policy and the domestic economy

A recent report has highlighted the dire humanitarian situation in Somalia, claiming that nearly one-half of the people in some rural areas are in acute food and livelihood crisis or humanitarian emergency. Nationally, the report estimated that in early April 2011 one in every seven children under five years old was acutely malnourished and one in every 25 severely malnourished

The Somaliland Republic

In April an unknown assailant threw a grenade into a marketplace in the regional capital, Hargeisa, wounding 20 people. Although the authorities blamed a mentally ill man for the attack-thereby implying that it was a one-off with no political or sectarian motivation-the incident was a stark reminder of how fragile the peace in Somaliland can be. In February the UK government announced that it would sharply increase its aid to Somaliland to around £32m (US$52m) in 2013/14. The Somaliland government has announced that it expects nearly to double its annual revenue to US$100m in 2011-a rise driven mainly by better tax collection. However, the parallel decision to slash tax rates will make this objective difficult to achieve.