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As previously mentioned, Somalia has been plagued by civil war. A civil war is classified as an internal conflict with at least one thousand battle-related deaths41. Although there have been numerous civil wars in Somalia, I will focus upon the one which commenced (officially) in 1991 and is ongoing. There are multiple causes of civil war. When looking at the statistics Somalia is the perfect environment for internal conflict to breed in. Countries which have a substantial share of their income (GDP) coming from the export of primary commodities are radically more at risk of conflict.

When 26% of GDP is primary commodity dependent an otherwise ordinary country has a risk of conflict of 23%. By contrast, if it had no primary commodity exports (but was otherwise the same) its risk would fall to only 0. 5%. At stated earlier, 60. 2% of Somalia’s GDP is gained from primary products, showing large risk of civil war42. The geography of a country matters too. If the population is highly geographically dispersed, then the country is harder for the government to control than if everyone lives in the same small area. Population density is low in Somalia, with 63% of the population living in rural areas.

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With geographic dispersion like this our otherwise ordinary country has a risk of conflict of around 50% whereas with Singapore-like concentration its risk falls to around 3%43. A country which has recently been occupied with civil war has a much higher risk of engaging in another in the near future. Immediately after the end of hostilities there is a 40% chance of further conflict. This risk then falls at around one percentage point for each year of peace. Somalia has been plagued with civil war and war with its neighbours since its birth. Finally, the ethnic and religious composition of the country matters.

If there is one dominant ethnic group which constitutes between 45% and 90% of the population – enough to give it control, but not enough to make discrimination against a minority pointless – then the risk of conflict doubles. Again, as previously stated, Somalia is made up of two main ethnic groups, Hamitic (85%) and the Bantu (14%), and various different types of clans. Inter-clan discord is one of the biggest causes of the ongoing civil war44. Since Somalia attained statehood, private pursuit and fierce competition over the resources of the country has been a marked feature among Somali elite behaviour45.

Each member of the governing elite thought that he was in the government, not as a national figure, but as a clan representative. The income which the state obtained, mainly through foreign aid, was seen as similar to water and pasture which Somalis competed for in the pre-state era. The practical idea behind this is that each and every pastoral Somali, thus, representing his clan, has a right to appropriate a slice of this gift from Allah. This sort of behaviour is incompatible with running a modern state. The other reason behind Somalia’s fighting is their General, Siad Barre.

He came to power in 1969 and it wasn’t long before his dictatorship showed the tyrant he was. Soon after taking control, General Barre started playing on the people’s emotions by invoking Somali Nationalism and the returning of the missing Somali territories46. He pursued this irredentist development while neglecting domestic issues. In 1977 Somali army units crossed the border of Ethiopia, waging war with the country. War was unsuccessful for the Somali, with Ethiopia regaining all its territory by 1978. Soon after, the General faced a huge failure in his dominant policy.

As both his national construction and development policy, which was based on greater Somalia, slowly came to an end his prospects for holding on to power were seriously in doubt. Subsequently, Somali politics seemed to have completely focused on internal conflict and repression. A body of disgruntled army officers, equally angry at Barre’s poor leadership during the war and subsequent defeat attempted to stage a coup d’etat against the regime late in 1978. The coup, however, failed and together with their leader Colonel Mohamed sheikh Osman and 17 ringleaders were summarily executed.

This finally led to the emergence of the armed oppositions. Somali Salvation Democratic Front (SSDF) was at first formed, followed by the Somali National movement (SNM). The nature of the leadership in Somalia was ruthless. In 1988, at the President’s order, an aircraft from the Somali National Air Force bombed the city of Hargeisa in northwestern Somalia, killing nearly 10,000 civilians and insurgents. Economic crisis, brought on by the cost of anti-insurgency activities, caused further hardship as Siad Barre and his colleagues looted the national treasury.

By the end of the 1980s, armed opposition to Barre’s government, fully operational in the northern regions, had spread to the central and southern regions. Hundreds of thousands of Somalis fled their homes, claiming refugee status in neighbouring Ethiopia, Djibouti, and Kenya. At the end of 1990 the Somali state was in the final stages of complete collapse. Following the collapse of the Barre regime in 1991, various groupings of Somali factions sought to control the national territory (or portions thereof) and fought small wars with one another.

Approximately 14 national reconciliation conferences were convened over the succeeding decade. Efforts at mediation of the Somali internal dispute were also undertaken by many regional states. The Somali economy was hit hard by war. By the end of the typical war the economy is about 15% poorer than it would otherwise have been47, and mortality is much higher, mainly due to disease triggered by movements of refugees and the collapse of public health systems, rather than combat deaths. One of the most striking effects of the war was over fishing48.

Somali people ignored international fishing protocols, thereby seriously harming ecology in the region. Fishing soon became an unsustainable practise. Fishermen perceive over fishing as a property right and can therefore hardly be stopped. This lead to a decrease in supply of fish, and eventually the fishermen had exhausted the stock of many species, leaving them without a job. Another detrimental consequence was the livestock ban49. One of the largest income-generating exports in Somalia is livestock, which before 1991 accounted for around 80% of the country’s income earnings.

In 2000, eight Gulf States that had been the main importers of Somali livestock imposed a ban on Somali livestock, citing poor quality control due to corruption and war. The livestock ban significantly damaged the economy and worsened pastoral livelihoods, pushing many pastoralists into destitution. Demand was skewed towards the basic necessities such as food and clothes. The people had no purchasing power and thus GDP growth slowed. The capital stock of an economy represents its accumulated stock of residential structures, machinery, factories, and equipment that exist at a point in time and add to the productive power of the economy50.

Increases in the capital stock are a crucial source of economic growth. Civil war changes the capital stock in two ways. First, internal con? ict reduces the existing stock of capital. Residential structures, roads, bridges, ports, and factories are targeted and destroyed by competing militaries in wartime. During the first wave of war between clan militias fighting for control over the capital in the wake of President Siad Barre’s fall, most of the businesses were destroyed and much of the capital was moved to banks outside the country51.

The level of the capital stock is also affected over time by changes in investment and the rate of depreciation52. In order for the capital stock to grow, the level of investment in the maintenance and expansion of the capital stock must outpace the rate of depreciation on the existing stock. Since civil war increases the rate of depreciation and reduces investment, growth in the capital stock is stunted. Civil war, therefore, is detrimental to growth of a country. Political models present a second outlet through which civil war might affect economic growth.

It is possible that civil war is a cause of poor macroeconomic policy: high in? ation, distorted foreign exchange markets, and large budget de? cits. The greater the probability of not being re-elected and the greater the degree of polarization of two political parties, the larger the budget deficit is likely to be (in a model where the optimal policy is budget equilibrium). The polarization and likelihood of defeat create incentives for politicians to behave myopically and incur large ? scal de? cits whilst in power. The power in office faces military competition from a domestic threat.

The stronger this threat is, the more likely the office will not remain in power. Moreover, civil wars are often fought along ideological lines suggesting that the opposition is likely to have di? erent preferences from the government. Such a situation creates strong incentives for de? cit spending. As the state is weakened by an internal threat, it often turns on the civilian population, using tools of intimidation to maintain its power. In addition, as the con? ict expands, the state ? nds itself resource constrained and increases its tax rates.

Often, this cannot keep pace with the rising costs of con? ict. Thus, civil wars negatively affect the government’s ? scal balance. Since ? scal balance, as part of a stable macroeconomic framework is a key source of growth, poor ? scal policy may be a channel through which civil war imposes costs on the economy. Just how much of a cost it is to the economy is shown by Paul Collier (Professor of Economics, Oxford), when he claims that “during civil war the annual growth rate is reduced by 2. 2%. A 15-year civil war [such as Somalia’s] would thus reduce per capita GDP by around 30%”.

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