Somalian Economy in 1990

How did Somalia economy survived in 1990s?

      Somalia, one of the few African countries with a standard single ethnicity, religion and culture had lived in a darkness moment in the 1990s. This union among its population helped the country to stay in peace until the colonization by France, Italy and Great Britain in the 19th century. Nevertheless, Somalia, having on one ethnicity is fragmented into different tribes, and sub-tribes. Notwithstanding the weakening of society and state during the 70s and 80s familiar black markets referred to as the “shadow economy” formed to supply the people because the government was incapable of doing so.[1] This shadow economy saw an increase around the 1980s especially for the minorities. Because of the presidential seat being vacant after President Siad Barre was overthrew in 1991, the shadow economy of the 1970s and 80s didn’t allocate goods and services fairly; but did form a huge economy and opportunities for Somalis in the 1990s.   This paper will look at how: colonialism and the Cold War shaped a relationship of Somali requirement on foreign aid; the weakness of Somalia’s centered economy; domestic economic policy fiascos and “land-grabbing” by leaders; and the failure of IMF and World bank structural adjustment programs (SAPs). I should mention that the mixture of these actions and the food shortage, led the fight between commanders and the collapse of the country. Finally, this research paper will analyze how Somalia’ failure required the formation of a shadow economy that continued to flourish despite the absence of state.
By examining these problems it is helpful to understand the nature of economic “winners” and “losers” and how Somalia’s shadow economy allowed the creation of what John Hellman calls “partial reforms.” Hellman explains, “The short term winners have often sought to stall the economy in a partial reform equilibrium that generates concentrated rents for themselves, while imposing high costs on...