From Bad Policy to Chaos in Somalia: How an Economy Fell Apart

From Bad Policy to Chaos in Somalia: How an Economy Fell Apart

From Bad Policy to Chaos in Somalia: How an Economy Fell Apart

From Bad Policy to Chaos in Somalia: How an Economy Fell Apart

Synopsis

This examination of the economic policies of Somalia since 1970 is empirical in nature, employing political and economic analysis, economic theory, and econometric techniques, and argues that the governmental economic policy, policy responses to crises, and exogenous shocks have been bad for the long-term economic growth of the country. Despite significant foreign financed public investment, economic growth has been weak and real per capita income has declined. The intensifying economic crises contributed to the rapid deterioration of the political situation that led to the collapse of the Somali state in 1991. Since 1991, chaos and more destruction has followed as warlords scrambled for power, resulting in the resource base of the economy being eroded further and the country being reduced to warring clans.

Excerpt

For a long time, I have aspired to write about the issues of economic development in contemporary Somalia—my homeland—particularly, as they relate to the role of economic policies in achieving economic growth. There is little published literature on the Somali economy, particularly on the efficacy of past economic policies in attaining a sustained level of economic growth. This book contributes to filling that void in the literature and would be an even greater contribution if it should succeed in laying the groundwork for research in the field. Certainly, there is no question that a greater understanding of how the Somali economy works and the role of policy in making it work better is needed, especially after the recent sad economic history of Somalia.

The tune frame of the study is 1970-95 and can be divided into two parts. The first part, the 1970-90 period, roughly falls within the era that Major General Mohamed Siad Barré reigned over Somalia. Barré came to power in a 1969 coup exploiting public dissatisfaction over the lack of development and over the epidemic corruption that paralyzed post-independence elected governments of the 1960s. Barré's development achievements, however, were also disappointing, and his increasingly repressive style of political rule created popular discontent and spread rifts and hatred among clans. After more than ten years of civil war, he was ousted from power in January 1991, leaving behind a legacy of growing social fragmentation and deepening economic and political crises. The second part, the 1991-95 period, marks the continuation of the crises with a more tragic result for Somalia. During this tune, ruthless warlords reduced the country to ruins as they scrambled for political power.

This study primarily attempts to explain how Barré's government policies, in pursuit of its economic and political objectives, and in response to exogenous shocks, contributed to collapse of the economy and the resulting socio-political chaos which brought Barré's government down. It is argued here that the disastrous outcome for the Somali economy was in large part a direct

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