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

398 Pages·1996·2.49 MB·English

by  Jamil Mubarak

Cover

From Bad Policy to Chaos in Somalia :
title:
How an Economy Fell Apart
author: Mubarak, Jamil Abdalla.
publisher: Greenwood Publishing Group
isbn10 | asin: 0275954862
print isbn13: 9780275954864
ebook isbn13: 9780313046827
language: English
Somalia--Economic conditions--1960- ,
subject Somalia--Economic policy, Economic
conditions , Somalia
publication date: 1996
lcc: HC850.M83 1996eb
ddc: 338.96773
Somalia--Economic conditions--1960- ,
subject: Somalia--Economic policy, Economic
conditions , Somalia
Page i
FROM BAD POLICY TO CHAOS IN SOMALIA
Page ii
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FROM BAD POLICY TO CHAOS IN SOMALIA
How an Economy Fell Apart
Jamil Abdalla Mubarak
Page iv
Library of Congress Cataloging-in-Publication Data
Mubarak, Jamil Abdalla.
From bad policy to chaos in Somalia: how an economy fell apart/
Jamil Abdalla Mubarak.
p. cm.
Includes bibliographical references and index.
ISBN 0-275-95486-2 (alk. paper)
1. Somalia—Economic conditions—1960–2. Somalia—Economic
policy. I. Title.
HC850.M83 1996
338.96773–dc20 95–51426
British Library Cataloguing in Publication Data is available.
Copyright © 1996 by Jamil Abdalla Mubarak All rights reserved. No
portion of this book may be
reproduced, by any process or technique, without the
express written consent of the publisher.
Library of Congress Catalog Card Number: 95–51426
ISBN: 0-275-95486-2
First published in 1996
Praeger Publishers, 88 Post Road West, Westport, CT 06881
An imprint of Greenwood Publishing Group, Inc.
Printed in the United States of America
The paper used in this book complies with the
Permanent Paper Standard issued by the National
Information Standards Organization (Z39.48–1984).
10 9 8 7 6 5 4 3 2 1
Page v
To my mother Mariam Awad
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Page vii
Contents
Tables and Figures ix

Preface xi

Abbreviations xiii

1. Introduction 1

2. Economics and Politics in Somalia: A Background 9

3. Improper Policy Responses to Exogenous Shocks 21

4. The Socialist Development Strategy of the 1970s: The Principal Origin
of the Crises 49
5. Macroeconomic Consequences of Unsustainable Public Sector Deficits 71

6. Ambitious Public Investment and Illusive Economic Growth Objective 95

7. Private Savings and Investment in an Inhospitable Environment 115

8. The Depressing Effects of Economic Policies on Trade 129

9. Resilience Amid Chaos: The Somali Economy After the State Collapsed 147

10. How the Economy Fell Apart and What We Have Learned 155

Selected Bibliography 169

Index 177
Page viii
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Page ix
Tables and Figures
TABLES
1.1 Basic Macroeconomic Indicators of Somalia and Sub-Saharan Africa,
1970, 1980, and 1990 4
3.1 Public Expenditures on Agriculture, 1970–88 30

3.2 Effects of First Oil Shock and Policy Responses on Trade, 1972–79 35

3.3 Effects of Second Oil Shock and Policy Responses on Trade, 1980–83 37

4.1 National Trading Corporation (ENC) Subsidies for Basic Food, 1974 53

4.2 The Manufacturing Sector: Percent Share of Public Enterprises, 1970–
82 56
4.3 Interest Rates and Domestic Credit, 1970–89 60

4.4 Real Wages, Selected Years, 1973–89 63

5.1 Percent Composition of Ordinary Budget Expenditure, 1970–88 78

5.2 Parameters for the Short-Run and the Long-Run Demand for Money 86

5.3 Money and Prices, 1969–88 89

6.1 Size of the Public Investment Program (PIP), Technical Assistance
(TA), and Development Expenditure Budget (DB), 1972–89 104
6.2 Sectoral Shares of Executed PIP, 1975–89 105

7.1 Savings and Investment, 1970–89 118

8.1 Merchandise Trade, Value, and Growth Rates, 1971–88 131