The Collapse of Somalia and Economic Considerations

The Collapse of Somalia and Economic Considerations

By African standards, Somalia is a homogenous state made up of a single ethnicity, religion and culture. This led to a relatively peaceful history until Somalia was colonized by the British, French, and Italians in the 19th century. However, Somalia’s single ethnicity is broken into different clans, and sub-clans and this region’s lack of natural resources led to a fracturing of society, violence, and eventually civil war at the end of the 20th century. Despite the deterioration of society and state throughout the 70s and 80s informal black-markets (referred to as the “shadow economy”) formed to provide goods and services to the masses living under a government incapable of providing anything. This shadow economy thrived throughout the 1980s for minority elites able to participate in its transactions. Even though there was no government after President Siad Barre was deposed in 1991, the shadow economy of the 1970s and 80s was already in place, and though it didn’t necessarily distribute goods and services equitably, it did create markets and opportunities for Somalis in the 1990s. This essay will look at how: (1) colonialism and the Cold War created a relationship of Somali dependence on foreign aid; (2) the vulnerability of Somalia’s undiversified economy; (3) domestic economic policy failures and “land-grabbing” by elites; (4) the failure of IMF-World bank structural adjustment programs. The combination of these events, coupled with famine, led to fighting between warlords and the collapse of state. Finally, this essay will analyze how the process of Somalia’s decline necessitated the establishment of a shadow economy that continued to prosper despite the absence of s...

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