When I say Somalia, you say Pirates.

We talked about Somalia in our Econ class and only 2min of it was about pirates. It's a super interesting situation tho!!! It also happened to be the essay question on my mid-term.

So they were in a terrible condition back in the 80's, with the rural communities accounting for 2/3 of the GDP but only seeing 1/6 of that amount because of the corrupt leaders. Obviously lots of other bad conditions existed but to be brief the State collapsed in '91. Civil war erupted. Tribe fought against tribe. Each wanted to rise as the leader to benefit off the others but when the US and the UN withdrew their forces, no tribe was strong enough to clearly defeat and remain leader of the other tribes in the end. The fighting dissipated with this realization.

Somalia has since existed with a central government and even tho its conditions are still grim they've actually improved economically. Bigger corporations have found place there, as well as cell-phone companies who are unrestricted by government. Although the state collapsed their unit of currency did not fall with it. People still held a certain value to it and with that they were able to proceed. Counterfeiters of course arose and drove inflation through the roof till 1000 Somali Shilling is equal to like $.75.. about the cost required to produce that piece of currency! But they're still able to function with that value.

Plus, since there's no central government to impose taxes or tariffs there is perfectly free competition for basically all firms and organizations! It's been reported that Somalia has some of the clearest cell-phone service. Coca-cola and other large corporations are housed in Somalia as well.

But because there is no central government there is no enforcement of law right? But they do have law and order! It is carried out by their tribal leaders. There is a specific payment required of each crime. For inter-tribal crimes the tribal leaders meet and compromise on an appropriate payment. If they can't come to an agreement or want it checked they get a 3rd-party tribal leader to sort it out. Seems like it'd be pretty easy just to get outta of it tho right? Just don't show up or refuse to pay? Not if you want your family responsible for the payment. They sure don't! But because they are responsible if the offender doesn't pay usually the family 'strongly urges' them to pay. If something happens tho and they wont etc. you can vote them off the island essentially. They become an outcast of the tribe. And if they're killed? Well they weren't apart of the tribe so the tribal laws don't pertain to them! That's why the Somali Pirates aren't a problem to the people of Somalia. Within their own tribes they live within and respect the law.. but for the ships passing by?? Free game man!!

Obviously Somalia is still very poor but they are currently doing better economically without a central government than when they had one.. so like no government is better than a really corrupt one essentially.