Capitalism in Somalia and how it’s better then you think.

As a Somali, Time and time again I hear the erroneous Marxist claim that Somalia’s current state is the result of free-market capitalism. Fortunately, that’s far from the truth, instead, Somalia is suffering from the impact’s of a 21-year long state quasi-socialist system. Said system exacerbated the natural disunity within Somalia through malicious use of the federal government for personal gain and reinforced the inherent failings of the socialist system.

In 1969, 21 October, the democratic state of Somalia was slain through a military-led coup de’ tat. The new government was headed by Siad Barre who quickly began drastic changes to the premature livestock-based economy.

In our Revolution, we believe that we have broken the chain of a consumer economy based on imports, and we are free to decide our destiny. And in order to realize the interests of the Somali people, their achievement of a better life, the full development of their potentialities, and the fulfillment of their aspirations, we solemnly declare Somalia to be a Socialist State. (Siad Barre)

Siad announced a 3-year plan to Socialise the young Somali state. Banking institutions, insurance companies, land prices, petroleum firms, and all major economic institutions were nationalized by the government. Initially, non-uniform gains were made in all sectors due to the increase of the productive capacity within the nation however this was short-lived and limited.

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However, as we approached the mid 70’s corruption burgeoned within the socialist government which consequently caused mass disillusionment within the nation. The Somali economy, initially boosted by organizational growth, was suddenly characterized through debt and a vast lack of industrialization. Thus, once again, socialism had sent another nation in economic disarray.

As Somalia entered the 1980’s Siad Barre attempted to reverse the impact of the socialist policy through abiding by the International Monetary Fund’s policies. This attempt at a more capitalistic system caused a reduction in the governmental deficit, a reduction in the annual rate of inflation, and an increase in GDP.

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However, due to widespread internal corruption, military overreach, and previous socialist policies, the government still had a poor excuse for an economy. Furthermore, The regime also needed a large amount of investment to restore a free market system, an effective taxation system, and other governmental institutions.

The 21-year economic failure, brutality, and restriction of freedom induced a civil war. Clans who had benefited from corruption were immediately scapegoated and governmental goods were sold off.

After an initial period of civil war, a Transitional government was instated with drastically reduced powers. Although the government was non-existent the Somali private sector has experienced impressive growth, the lack of a government allowed the populace to enact a more free form of capitalism.

The Somali GDP is expected to reach 6 billion USD at the end of 2020 with exports more than 3x the 1991 export aggregates. The Somali livestock traders have even begun competing with Australia’s livestock dominance in the Persian Gulf and have overtaken net exports in 2012.

Furthermore, through remittances, small scale manufacturing plants have opened throughout the nation with 25 factories in Mogadishu alone. Said plants produce pasta, plastic bags, fabrics, soaps, and even Coca Cola. The Airline industry in Somalia has also grown with over six Somali owned private carriers.

The following sectors have also grown rapidly after the fall of the socialist regime :

  1. Telecommunications
  2. Remittance industry(Hawalas), handling 1.6 billion annually.
  3. Development of a Somali Stock Exchange
  4. Beginnings of the Somali Petroleum Company
  5. Development of National Industrial Electricity and Gas company

According to Ersun Kurtulus an Associate Professor of Social Sciences at the University of Ankara Somalia has been faring better under the current anarchy. Thus next time a Marxist exclaims ‘SoMaLia iS TrUe CaPiTaLiSm” simply show them the following graph:

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Somalia is getting better, we are currently excising the destructive cystlike impact of Socialism and moving onto a free nation who learned the lessons of socialism and dictatorship.

Written by Maxamed Sarinle

Written by

A Somali physicist, electrical engineer, Software enthusiast, and political enthusiast.

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