Talk:Economy of Somalia

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[edit] Question on the exchange rate

Am I missing the logic in the following paragraph?

By the spring of 2002, the Somali shilling emitted by the TNG had fallen to over 30,000 shillings to the U.S. dollar. In 2003, that rate had leveled off to 20,000 shillings to the dollar. These free market rates, such as used in the Bakaara Market, are far below the official rates, which, in January 2007, stood at 1,288.26 to the dollar.

1. 30,000 Somali Shillings to the US dollar means each Shilling is worth a bit more than one three-hundredth of a cent (i.e., $0.0000333).

2. 20,000 Shillings to the US dollar means each Shilling is worth one two-hundredth of a cent (i.e., $0.00005). Thus between 1 & 2, the value of the Shilling has actually improved a bit -- even if this is only a dead cat bounce.

Yes. Hence the statement "leveled off a bit." i.e., it improved. It did not continue to plummet and reversed sligthly. --Petercorless 22:47, 20 January 2007 (UTC)

3. 1,288 (and change) Shillings to the US dollar means each Shilling is worth a bit more than seven hundredths of a cent (i.e. $0.000776). Is "1,288.26 to the dollar" the official rate? or is this the free market rate? In any case, the Shilling has actually improved quite nicely in value against the dollar, increasing in value in four years by over 1400%! (In comparison, had I invested in a European index stock fund for the same four years, my money would have increased barely more than a relatively modest 100%.)

Go to any of the currency exchange sites and you will find that as the official exchange rate. It is a common way to get foreigners to lose their money (and for the powers-that-be to make money) when people enter the country. It has nothing to do with the "street value" of the shilling. --Petercorless 22:47, 20 January 2007 (UTC)

By these calculations, & assuming that these rates are correct, the Somali economy is doing quite well -- which means a devastating Civil War is better than four years of reasoned & informed economic policy. (And before anyone accuses me of espousing libertarian economic theory, I have a hard time seriously accepting these conclusions.) -- llywrch 05:25, 20 January 2007 (UTC)

The "street market" rate remains far out of balance with the "official" rate. It was similar to how, for many decades, the "official" rate of the ruble was far higher than its street value. Do not mistake the "official rate" for the far worse "street" (free market) rate. Counterfeiting is still rampant in Somalia. --Petercorless 22:47, 20 January 2007 (UTC)
So you don't see any problems with how these exchange rates are presented? The 30,000 Shillings to US$1 one year is not much worse than 1,288 Shillings to US$1 a few years later? I'm just looking to make the article more understandable, not where the best places are to exchange my US dollars for Somali Shillings. -- llywrch 01:03, 21 January 2007 (UTC)
The official rate bears little resemblance to the "street value." The historical exchange rate in 2000 was 2555.42 SoSh to the dollar (to 03/01/2000), then, to 2607.16 (up to 04/26/2000), then remained at 2620.26 for the rest of the year. That bore little resemblance to the freefall that the SoSh suffered in the free market. This often happens in international currency trading. --Petercorless 14:37, 21 January 2007 (UTC)

[edit] Original research

I removed the following paragraph: The main problem affecting economic growth is the lack of stability. For businesses to operate, it is necessary to provide some level of security. Internationally recognized governments are widely perceived as being more reliable in this than the traditional tribal leadership that currently holds sway in Somalia. This is original research. Furthermore, the claim that internationally recognized governments are perceived as more reliable needs backing up. 169.229.53.150 08:35, 18 April 2007 (UTC)

Totally agree This article reaks of original research and speculation and citation from whatnot which is undoubtfully reporting biased information as they have an agenda themself in the country, mostly I am not keen on the UN references. Lord Metroid 00:59, 10 August 2007 (UTC)

[edit] Corruption

Corruption? As it says their is no government corruption. however it also states that it is ranked by the transperancy index as #144. What kind of facts are this based on? Corruption is defined as taking money for using someone elses products over someone elses. The seller of the service of products doesn't do any corrupt for him a bribe is merely a slight price increase. The buyer however if he has a contract that obligates him to make the best deal for his employee and takes money to favour one possible supplier. Than the corruption is towards the employee and a breach of contract. If this is why Somalia got a #144 I don't know how the transpency index collected such data. The other possibility is that the UN or the UN enforced centralized government is the corrupt party that gives Somalia #144 how is that corruption considering those central powers isn't percieved as legitimate by the people of the country and has no connection to the country itself but rather UN? Mentioning this index is very confusing for this article and hence I will remove it. Lord Metroid 00:59, 10 August 2007 (UTC)

[edit] GDP/Capita and banking

The GDP per capita is currently around $3000 now, not $600 right? This is really making me doubt the statistics, it was only $600 a couple of years ago, now it's $3000, with a growth rate of only 3%? In 2005 the GDP was estimated at ~$5 billion, now it's ~$50 billion according to the Somalian main page? Yeah right. Also, I heard that banks print their own currencies, is this true? Fephisto 21:41, 30 September 2007 (UTC)

Those statistics seems very questionable, I would want multiple sourcing for such suspicious numbers. However it might be possible to increase the numbers by such a large amount. In theory small investements for an unmodern economy could raise the efficiency enourmously compared to making an investement in a developed economy, just imagine what the efficiency increase would be from getting a telephone. Regarding printing money, I have no idea if the banks in Somalia does but if you know how the banking system works today in every country, you would know that every bank prints their own money. Considering however that passport administrations used to be of a central authority and if what I have heard is correct and passports has been decentralized such that anyone can get into the business of passports nowdays in Somalia. I can see how printing money could have become decentralized as well. Lord Metroid 19:57, 1 October 2007 (UTC)
Then, at the least, the reported growth rate and actual numbers are NOT lining up. What should be done? Fephisto 17:40, 21 October 2007 (UTC)
We could mention the currently reported figures as well as present the old figure. Let the reader decide which would be more likely. However I see trouble with this method because of the encyclopedic naturw of wikipedia, whatever is presented will get viewed as the reality presented by authority on the subject. So at the same time I don't think we can expect the readers to determine which of the figures would be the correct. I suppose one way is to state that GDP has been reported from $600 up to $3000. Lord Metroid 22:08, 21 October 2007 (UTC)
The front page has changed since this was written, and now the numbers match up again.

[edit] Export Data Mismatch

The amount of exports listed in the picture shows $150 million (for just UAE), while the Factbook's mention is about half that, I listed this discrepancy in the stats section.

I gotta admit, that discrepancy is huge, please notify me if I'm doing something wrong here. Fephisto (talk) 17:33, 4 March 2008 (UTC)