Somalia

Britain withdrew from British Somaliland in 1960 in order to allow its protectorate to join with Italian Somaliland and form the new nation of Somalia. In 1969, a coup headed by Mohamed SIAD Barre ushered in an authoritarian socialist rule that managed to impose a degree of stability in the country for a couple of decades. After the regime's overthrow early in 1991, Somalia descended into turmoil, factional fighting, and anarchy.

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, 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 toward 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. A two-year peace process, led by the Government of Kenya under the auspices of the Intergovernmental Authority on Development (IGAD), concluded in October 2004 with the election of Abdullahi YUSUF Ahmed as Transitional Federal President of Somalia and the formation of a transitional government, known as the Somalia Transitional Federal Institutions (TFIs). The Somalia TFIs include a 275-member parliamentary body, known as the Transitional Federal Assembly (TFA), a transitional Prime Minister, Ali Mohamed GHEDI, and a 90-member cabinet.

The TFIs are currently divided between Mogadishu and Jowhar, but discussions to co-locate the TFIs in one city are ongoing. 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 ban on Somali livestock, due to 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.

Somalia's arrears to the IMF continued to grow in 2005. Statistics on Somalia's GDP, growth, per capita income, and inflation should be viewed skeptically. In late December 2004, a major tsunami caused an estimated 150 deaths and resulted in destruction of property in coastal areas.