Economy of Somalia
Somalia is a country that has experienced internal conflict and war for much of it’s history. Violence and death have become daily realities for the people of Somalia since the central government was overthrow in 1991. There are thousands of refugees throughout the country that have been displaced by the ongoing civil war, as well as reoccurring floods that have plagued the country. Famine is widespread throughout Somalia due to drought and the failure of crops. 300,000 people have died because of starvation and malnutrition and thousand continue to suffer. Somalia has many problems and is considered a relatively poor country, but in comparison to many other African countries Somalia is doing well for itself, especially it’s economy. Though the Somalian economy does not grow and flourish, it continues to be maintained.
One would think that due to the civil unrest that is taking place within the country and the absence of a stable government for over eighteen years, the Somalia economy would be in shambles. This is not the case. Somalia has been able to manage the continued existence of a lively informal economy. The Somalia economy depends a great deal on telecommunications and livestock. Farm animals account for about 65% of the export profit that is made in Somalia. Natural resources such as oil, gems and coal exist only in small quantities, if at all, in Somalia. There are few natural resources in Somalia that are numerous enough to nourish the economy. Temperatures in Somalia range from 68° F in the winter, with temperatures as high as 100° F in the summer. The climate of Somalia is dry and hot. Because rainfall in Somalia is inadequate and rare, the people of Somalia can not rely on farming and agriculture to fuel the economy. In southern Somalia there are a few banana plantations that help to contribute to the Somalia economy. Over the last few decades the Somalia economy has relied heavily on the export of livestock including sheep, goats, cattle and camels. However, in recent years the export of livestock has taking a hit because of reoccurring bans instated by Arabian Peninsula states. Myrrh, frankincense and uranium also make up a small portion of the countries exports. Northern Somalians have begun producing a small fishing industry, in which they catch fish such as shark and tuna with the purpose of exporting them to assist the Somalia economy. Other small domestic markets include sugar, sorghun, corn and qat. The internal struggles on the country has debased it’s currency until the exchange rate became over 30,000 shillings for one United States dollar. Therefore Somalians rely heavily on bartering, or exchanging one item of value for another item of value. Somalians depend on commerce and trade, as they have for much of their history. The continuous civil strife has hampered any further progress of the economy and although the economy survives, it does not flourish. The Somalia economy will most likely not begin to prosper and expand until the civil strife comes to an end and a central government is established.