Remittances and Economic Development in Somalia

This collection of papers examines the role and impact of Somalia's remittance system. Chapter II examines how a dynamic private sector, powered by remittances from abroad, has managed to thrive in a country that is a failed state and among the poorest in the world. Adapting well and even flourishing in a stateless conflict ridden economy, private sector activities have emerged in trade, money transfer services, transport and telecommunications. At the household level, recent studies show that remittances constitute 40 percent at the income of urban households. While recognizing the benefits of remittances, it also cautions that further private sector growth is limited in a country without a functioning government and essential public goods.