In 1960, the two former colonies of Italy and Britain, as a result of a long struggle, merged into a single state of Somalia.
The economy of this country is often cited as an example by various economists as the only one in the world. The country is currently facing a serious crisis that has been going on for more than 20 years. The study of the market system of this East African country is hampered by constant hostilities and a lack of centralized authority.
Until 2000
Somalia's economy was almost completely destroyed by a prolonged civil war. It began in 1988 and continues to this day. Before the war, the main income of the state was the import of agricultural products. With the help of the USSR and the Federal Republic of Germany, many factories and factories were built. These were mainly light industry enterprises. They focused on the benefits of local materials. There have also been a number of attempts to create fishing cooperatives. By the 70s of the 20th century, Somalia's economy was on the rise and developed. The rate of industrialization increased more and more every year. However, in 1977 the war with Ethiopia began. The year-long conflict drained the country's treasury. Complete defeat led to an even greater crisis. Corruption grew and the share of the so-called "shadow economy". In 1991, a civil war broke out.
Chaos and war
President Mohamed Barre was overthrown.
The country plunged into chaos and despair. Several large armed groups have actually seized power in Somalia. The economy in such conditions has become only a necessary means to continue the war. Until the 91st year, the country acted on the principle of a
planned economy. The enterprises were interconnected and could not function autonomously. As a result of the crisis, the country broke up into several
unrecognized states. This situation completely crossed out any possibilities for continuing industrialization. Significant
sectors of the economy have become controlled by various armed groups. Profits were almost completely taken away by them.
The current state of the economy
By the end of 2015, the crisis began to decline. The first investments in the country appeared, mainly from refugees from Somalia. The economy, however, is still in a terrible state. At the moment, in fact, the country does not exist. On its territory there are several unrecognized states. Many territories are not controlled at all by any administration. The power there is represented by small armed gangs or tribal organizations.
Despite all this, the economic situation in the country is not the worst. The main profit sector is livestock. Most residents live in rural areas. Many still lead a nomadic lifestyle. Geographical features contribute to the favorable development of the agricultural industry. Banana plantations annually bring huge profits. There is also great potential for fishing. However, this niche requires large investments. Another problem for the development of the industry is the various armed forces that control a significant part of the coast. Among them are the famous "Islamic ships", against which NATO forces conducted an operation, and pirate organizations.
Somalia Statistical Parameters: Economics
The main source of information on the situation in the country today is the CIA. Due to the lengthy civil war and the actual collapse of the state, these data are very inaccurate, despite the existence of the so-called "federal government" of Somalia. The economy has recently been booming thanks to investments by the Somali community in other countries. Currently, the country's GDP is about $ 6 billion. Some state entities have established diplomatic contact with a number of European countries. GDP per capita is about $ 600. Moreover, it is impossible to calculate this indicator in the "tribal territories", that is, in regions where there is no centralized power. But in the stable regions of the country, many different enterprises have been created. Air communication is functioning, the marketing industry is developing. Gradually, modern means of production are being introduced.
Minor Economic Sectors
In addition to livestock and agricultural exports, there are other market niches that make up the Somali economy. The sights of this country once attracted many tourists. However, a protracted military conflict almost completely destroyed tourism. Nevertheless, recently tourists have again arrived in the country. These are mainly citizens of neighboring Ethiopia.
Somalia also has a number of rare plants that are highly regarded in the world. For example, a country leads export of frankincense. Canned fish is sold throughout Africa, and more recently in Asia. The advantage of Somali products is their price. This is due to cheap labor and an abundance of marine life that cannot be caught on an industrial scale.