Somalia

The regime of Mohamed SIAD Barre was ousted in January 1991; turmoil, factional fighting, and anarchy have followed in the years since. In May of 1991, northern clans declared an independent Republic of Somaliland that now includes the administrative regions of Awdal, Woqooyi Galbeed, Togdheer, Sanaag, and Sool. Although not recognized by any government, this entity has maintained a stable existence, aided by the overwhelming dominance of a ruling clan and economic infrastructure left behind by British, Russian, and American military assistance programs.

The regions of Bari and Nugaal and northern Mudug comprise a neighboring self-declared autonomous state of Puntland, which has been self-governing since 1998, but does not aim at independence; it has also made strides towards reconstructing a legitimate, representative government, but has suffered some civil strife. Puntland disputes its border with Somaliland as it also claims portions of eastern Sool and Sanaag. Beginning in 1993, a two-year UN humanitarian effort (primarily in the south) was able to alleviate famine conditions, but when the UN withdrew in 1995, having suffered significant casualties, order still had not been restored.

The mandate of the Transitional National Government (TNG), created in August 2000 in Arta, Djibouti, expired in August 2003. New Somali President Abdullahi YUSUF Ahmed has formed a new Transitional Federal Government (TFG) consisting of a 275-member parliament. It was established in October 2004 to replace the TNG but has not yet moved to Mogadishu. Discussions regarding the establishment of a new government in Mogadishu are ongoing in Kenya.

Numerous warlords and factions are still fighting for control of the capital city as well as for other southern regions. Suspicion of Somali links with global terrorism further complicates the picture.

Somalia's economic fortunes are driven by its deep political divisions. The northwestern area has declared its independence as the "Republic of Somaliland"; the northeastern region of Puntland is a semi-autonomous state; and the remaining southern portion is riddled with the struggles of rival factions.

Economic life continues, in part because much activity is local and relatively easily protected. Agriculture is the most important sector, with livestock normally accounting for about 40% of GDP and about 65% of export earnings, but Saudi Arabia's recent ban on Somali livestock, because of Rift Valley Fever concerns, has severely hampered the sector.

Nomads and semi-nomads, who are dependent upon livestock for their livelihood, make up a large portion of the population. Livestock, hides, fish, charcoal, and bananas are Somalia's principal exports, while sugar, sorghum, corn, qat, and machined goods are the principal imports. Somalia's small industrial sector, based on the processing of agricultural products, has largely been looted and sold as scrap metal.

Despite the seeming anarchy, Somalia's service sector has managed to survive and grow. Telecommunication firms provide wireless services in most major cities and offer the lowest international call rates on the continent. In the absence of a formal banking sector, money exchange services have sprouted throughout the country, handling between $500 million and $1 billion in remittances annually.

Mogadishu's main market offers a variety of goods from food to the newest electronic gadgets. Hotels continue to operate, and militias provide security. The ongoing civil disturbances and clan rivalries, however, have interfered with any broad-based economic development and international aid arrangements.

In 2004 Somalia's overdue financial obligations to the IMF continued to grow. Statistics on Somalia's GDP, growth, per capita income, and inflation should be viewed skeptically. In late December 2004, a major tsunami took an estimated 150 lives and caused destruction of properity in coastal areas.