Donors pledge 1.8 billion euros for Somalia

By Adrian Croft BRUSSELS (Reuters) - International donors promised Somalia 1.8 billion euros in reconstruction aid on Monday to back a three-year plan aimed at strengthening the country's economy and building up its fragile security. Somali leaders and about 50 international delegations met in Brussels to endorse the plan, which includes steps to build a justice system, foster political dialogue and improve day-to-day security after decades of debilitating civil war. The 28-nation European Union, already the largest donor to the horn of Africa country, led the financial pledges, committing 650 million euros. "I am glad to note that pledges today reached 1.8 billion euros, backing with financial means these new priorities and framework," European Commission President Jose Manuel Barroso told the closing session of the conference. Britain separately announced a new 50 million pound aid package for Somalia. EU officials said other large pledges were made by Denmark, Germany, Sweden and Norway. Somalia plunged into two decades of civil war and lawlessness after the overthrow of President Siad Barre in 1991 while international navies are fighting piracy off its coasts. But donors have seen signs of stabilisation since the African Union's peacekeeping troops helped drive Islamists out of the capital Mogadishu and many other strongholds in central and southern Somalia. The country of 10 million people is one of the poorest in the world, with per capita income of just $600 a year. Somali President Hassan Sheikh Mohamud said the 1.8 billion euros in pledges was a "very clear indication that our international partners are serious in sustaining the current progress and development in Somalia." MILITANTS However, he warned that moves by banks to stop money transfers to Somalia risked strengthening Islamist al Shabaab militants. Remittances from Somalis living abroad are Somalia's biggest foreign currency earner and many of its 10 million people rely on the $1.2 billion or so sent to the nation every year. But British bank Barclays said in June it was stopping offering banking services to some Somali transfer firms due to fears funds might end up in the hands of "terrorists". Some other banks have taken similar steps. "This will strengthen the evil forces of al Shabaab and piracies to recruit many more (people)," Mohamud said. Although the conference tried to send an upbeat message about Somalia's prospects, medical charity Medecins Sans Frontieres only last month announced it was pulling out of Somalia, saying the threat of deadly violence had become intolerable. And rights group Amnesty International urged the EU to use its discussions with Somalia on Monday to highlight continuing human rights abuses in the country.