Economy of Somalia

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Economy of Somalia
currency Somalia shilling
inflation k. A.
gross domestic product US $ 2.6 billion (2008, estimated)
Economic growth 2.6 (2008, estimated)
GDP per inhabitant ? U.S$
GDP by sector
(2008, estimated) 		Agriculture: 65%
Industry: 10%
Services: 25%
GDP ( purchasing power parity ) $ 5.524 billion (2008, estimated)
Unemployment rate k. A.
Employed
by sector 		Agriculture: 71%
Industry and services: 29%
Share below
the poverty line 		k. A.
Foreign
debt 		3 billion US $ (2001)
External contribution
export US $ 241 million (2004)
Trading partner United Arab Emirates : 52.6%
Yemen : 14.6%
Oman : 6.3%
import US $ 576 million (2004)
Trading partner Djibouti : 30.1%
Kenya : 13.7%
Brazil : 8.4%
Current account ? Billion US $
Foreign direct investment ? Million US $
Development aid received US $ 60 million

The Somali economy has a special position in that it has existed in the only state in the world without a government from the outbreak of the Somali civil war in 1991 until at least 2000. The civil war situation also makes it difficult to collect reliable economic data.

Somalia is a poor country, the population of which lives mainly from nomadic cattle breeding and also from agriculture on the Jubba and Shabeelle rivers in the south. Many Somalis rely on remittances from relatives abroad. The absence of government regulations means that illegal activities such as piracy or counterfeiting can also be carried out largely undisturbed. The arms trade is particularly flourishing in Mogadishu .

history

The country has benefited from its location on the trade routes through the Red Sea since the earliest times in Somalia's history . At different times, cities like Opone (Hafun), Zeila (Saylac), Hobyo , Berbera and further south Mogadishu , Baraawe , Merka and Kismayo became important trading centers.

In the colonial era, what is now Somalia was divided into British Somaliland (north) and Italian Somaliland (south and east). While the British used their Somaliland colony mainly as a source of live cattle to provide food for the Aden colony and barely expanded the infrastructure, the Italians established banana, cotton and sugar cane plantations. Because only a few Somalis were willing to do voluntary wage labor on the plantations, the Bantu in particular were used for forced labor. In the last decade before independence (1950–1960), abundant UN development aid flowed into the now trust territory of Italian Somaliland.

The government of the now independent Somalia wanted to promote the export of cattle and plantation products in order to promote economic development. To this end, the transport infrastructure and irrigation systems should be expanded and model farms should be built. As a result, sugar self-sufficiency was almost achieved, and banana and cattle exports increased. In order to be able to finance these projects, Somalia had to rely on foreign donors (especially Italy and Great Britain).

In the framework of "scientific socialism" under Siad Barre , the few "modern" economic sectors were brought under state control. Since these areas only made up a small part of the overall economy, the nationalizations were not a radical cut in the economy. Barre later broke with the Soviet Union and adopted an economic policy based on the guidelines of the International Monetary Fund . Corruption, unsuccessful economic policy, drought and the costs of the Ogaden War (1977–1978) led to a deterioration in the economic situation in the 1980s, which contributed to the fall of Barres in 1991.

Economy by sectors

50% of the average household income is achieved through self-employment (especially agriculture), 14% through wage labor. 22.5% of income comes from remittances from Somalis living abroad, 13.5% from other sources (rental income, international aid).

Agriculture

A Somali with his herd of goats near Beledweyne (Belet Uen), December 1993
Bantu farmers near Kismayo , December 1993

71% of the Somali population are employed in agriculture. In the north and center of the country, nomadic cattle ranching is the main practice; Depending on the terrain, sheep, goats, cattle or camels are kept.

Agriculture, partly combined with sedentary livestock farming, is practiced in southern Somalia in the valleys of the Jubba and Shabeelle (with irrigation) and in the area between these two rivers (as rain-fed agriculture). In addition to subsistence farming, there are also banana plantations that were established in Italian Somaliland during the colonial era .

More recently, civil war fighting, drought and flooding in river valleys have damaged agriculture and led to hunger.

In the west of Northern Somalia / Somaliland there are smaller areas with arable farming and oasis cultures.

fishing

Fishing also plays a role, especially on the northeast coast in the regions of Bari , Nugaal and Mudug . However, it is made more difficult by the fact that Thai, Spanish, Chinese and Russian fleets are illegally overfishing the waters off Somalia . As a result, some Somali fishermen have lost their livelihood and operate as pirates, attacking the illegal fleets, but also raiding freighters and passenger ships. The coastal waters of Somalia are among the hardest hit by piracy.

Commercial and industrial

In 2004, Coca-Cola bottling plant opened in Mogadishu

With an estimated 10% of GDP, this branch of the economy accounts for the smallest share of the entire economy. Kismayo was a food processing center. Of the few factories in Somalia, many were looted during the civil war. A Coca-Cola bottling plant in Mogadishu was temporarily converted into a refugee camp. A new facility of this type was opened in 2004 and was looted during heavy fighting in 2007.

Natural resources

Oil reserves are suspected in Somalia, namely in the northern regions of Somaliland and Puntland ( Guban and Nugaal Valley ) as well as in the Banaadir region, in Galguduud and Mudug, including offshore deposits near Hobyo . The Siad Barres government had granted concessions to various US oil companies . The political situation, however, makes it difficult to examine or extract these reserves.

The regional government of Puntland has issued licenses for oil exploration, including to a Chinese company. The fact that this happened without the consent of the central transitional government contributed to differences within the transitional government in 2007. In 2008 exploration activities began in Puntland. The de facto independent Somaliland also began selling licenses on its territory in May 2008.

Services

There are ten telecommunications companies in Somalia. The telecommunications network is considered to be cheaper and more functional than in neighboring countries.

Money transfer institutions operating according to the hawala system are in steady demand, as a large part of the Somali population depends on money transfers from relatives abroad. These remittances account for approximately $ 700 million annually, or 22.5% of the median household income. The previously most important institute, al-Barakat , was closed in 2001 at the behest of the USA, as it was suspected of having carried out money transfers for terrorists. Competitors soon filled the gap that this created.

currency

The official currency is the Somalia shilling . Since the collapse of the state, banknotes have also been printed “privately” on a large scale. Due to the chaotic currency situation, various foreign currencies are used as means of payment in Somalia. US dollars , euros and the United Arab Emirates dirham are widely used . In border regions one also encounters the currencies of neighboring countries: Ethiopian birr , Djibouti franc and Kenyan shilling . The Somaliland shilling exists in Somaliland .

The African Wildlife Elephant has been an investment coin since 2004 .

Infrastructure

There is a sea and airport in Mogadishu, but they could not be used because of the ongoing fighting between militias. They reopened after the Union of Islamic Courts came to power in 2006. In general, the infrastructure in the country is sparse. The country's only railway line, the Mogadishu-Villabruzzi ( Jawhar ) railway line , was built under the Italian colonial rulers in 1928, but was destroyed in World War II in 1941 and never rebuilt.

See also: List of airports in Somalia

Foreign trade

Man with Kath in Burao

The intoxicant Kath , which is flown in from Kenya, is an important import . Industrial products, petroleum, food and building materials are also imported.

The export of cattle to the states of the Arabian Peninsula has traditionally been an important economic factor, but was adversely affected when Saudi Arabia prohibited the importation of Somali cattle in 1998-2006, ostensibly to prevent the introduction of animal diseases ( Rift Valley fever ). There is also extensive livestock trade between southern Somalia and neighboring Kenya. Other export goods are bananas, fish, animal skins and scrap.

Charcoal export

Knowing of their importance in the arid, desertified country, the Somali government banned tree felling. Now, however, charcoal is being produced on a larger scale from the last of the forests and mainly exported to Arab countries. Since this is problematic from an ecological point of view, the authorities of the de facto autonomous Puntland as well as the Union of Islamic Courts, which was temporarily powerful in 2006, prohibited the export of charcoal.

Economy in Somaliland

The Somaliland economy in northern Somalia , which was unilaterally declared independent in 1991 and has since been de facto independent but not internationally recognized, is a special case within the Somali economy. The central bank Baanka Somaliland , founded in 1994, issues its own currency, the Somaliland shilling . The most important source of income are the ports, especially Berbera ; this has become an important export port for Ethiopia since it can no longer use the Eritrean ports of Massaua and Assab after the Eritrea-Ethiopia war of 1998-2000 . Other important sources of income are cattle exports to the Arab states and money transfers from overseas Somali countries. Reconstruction has taken place since the declaration of independence and the economy has grown, although here too, poverty and hunger remain widespread among the population.

literature

  • Somalia: Economy Without State . Indiana University Press 2003, ISBN 0-253-21648-6 (English).
  • Arnaldo Mauri: Banking Development in Somalia, SSRN 958442 (1971).

Web links

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General:

Individual evidence:

  1. ↑ CIA World Factbook
  2. ↑ International Monetary Fund: Country overview on GDP / inhabitant
  3. ^ Countrystudies.us: Somalia - Economic Development, 1960–69.
  4. ^ Countrystudies.us: Somalia - Scientific Socialism, 1970-75.
  5. ↑ Countrystudies.us: Somalia - From Scientific Socialism to “IMF-ism,” 1981-90.
  6. ↑ a b World Bank / UNDP 2002, in: BBC News: at-a-glance: Somalia.
  7. ↑ BBC News: Somalis move bodies after clashes.
  8. ↑ Abdulkadir Hussein Abiikar: Oil in Somalia.
  9. ^ Weekly newspaper from January 11, 2007: Many small Somalias.
  10. ^ AG Friedensforschung Uni Kassel / young world: Premier on the hit list.
  11. ↑ Somaliland Times: Somaliland Minerals Ministry Starts Selling New Oil Blocks.
  12. ↑ BBC News: Telecoms Thriving in Lawless Somalia.