Somalis Are Always Going To Be Poor

[DR OSMAN]

Somalia is doomed to be poor forever. We don't even have 'gold reserves'. There is nothing of value backing our country currency or trade. Our current foreign reserves is $30 million USD, which is the lowest in the whole world.

https://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves

How can we grow our economy if we can't secure our currency which is a measly $30 million in foreign reserves? That means any nation who gives a loan let's say 1 billion dollars, would be insane because our government reserve is 30 million. We have no asset of value in our country. We are doomed to hand outs and begging.

I was reading this article by Deni who said he created some independent local 'reserve' for Puntland. How did he do this?

https://puntlandpost.net/2019/04/16...say-sheegtay-in-ay-samaysatay-kaydka-lacagta/

Puntland needs a foreign not local reserves and we need to lure business people locally and internationally to put either gold or dollars in there for us and we give them a good return on their investment as the economy develops. We will set aside a portion of our taxes to service these investors who are backing up our economy with precious metals(non perishable) or the USD dollar which is the most accepted currency in the world.

They ain't going to put their metals in Somalia central bank the most corrupt country in the world. It will be stored overseas in reliable countries like the federal reserve of america which hosts 34 nations.

 

[DR OSMAN]

The only commodity in the world that is valuable for centuries is gold. Oil isn't. Oil can be thrown out once electric or something else replaces it. Gold will never be replaced. It's a good guarantor of an economy.

Why doesn't deny work out how much gold we can accumulate by selling our camels? for example each family in puntland donates 1 camel to the government who then converts this into gold and asks international investors to assist in a public/private partnership to develop puntland foreign reserves.

We need a separate reserve to Somalia so we are not attached to their ups/downs and once we can separate our reserves, investors will come to Puntland.

 

[Abdisamad]

Forget Somalia.
But we can transform Puntland just like the way Singapore did it

 

[Abdisamad]

For inspiration

 

[DR OSMAN]

For inspiration

We are going to be poor like Nigeria even if oil investors come as we lack any foreign reserves backing our country. That's why countries are poor and rich. They have assets in reserves that is valuable. Gold and USD reserves are owned by 'individuals' their business people who get a nice stable return for centuries from the government they service. It's not owned by any country.

Our business men need to relocate from diaspora and start replacing their assets in africa and mid-east with 'gold' and begin securing somalia economy. We need to then call other nations to add some nice gold for us.

Your not independent untill you have your own reserve. We need Somalia

 

[Abdisamad]

@DR OSMAN
Somalia is dead sxb.
We need to build and transform Puntland. First step is an independent PL

 

[Ras]

Gold reserves are seen as having less confidence in the global reserve currency so it's frowned upon.

That's unless you're big enough like China or Japan and don't care what the west thinks.

Until then we should be good global serfs and store our wealth in the dollar like all other powerless countries.

Maybe someone more versed in international trade could jump in and answer this for me.

Do we really need to care about our reserves unless we plan to trade in our own currency... Something which I doubt anyone would want for the foreseeable future?

Banks don't even want to touch Kenyan shilling regardless of its stability and decent reserves... so I doubt they'll be interested in our currency.

So in other words is there any need to have any reserves in gold, dollar, yuan ect at all?

If not then that might be a good thing for Somalia as it might push us to develop our own domestic trade instead of relying on exports for growth.

 

[DR OSMAN]

Gold reserves are seen as having less confidence in the global reserve currency so it's frowned upon.

That's unless you're big enough like China or Japan and don't care what the west thinks.

Until then we should be good global serfs and store our wealth in the dollar like all other powerless countries.

Maybe someone more versed in international trade could jump in and answer this for me.

Do we really need to care about our reserves unless we plan to trade in our own currency... Something which I doubt anyone would want for the foreseeable future?

Banks don't even want to touch Kenyan shilling regardless of its stability and decent reserves... so I doubt they'll be interested in our currency.

So in other words is there any need to have any reserves in gold, dollar, yuan ect at all?

You need some non-perishable commodities that will last for centuries. We are talking about a nation here sxb and we need to secure it with the most valuable long-term commodity, not short-term commodities that can lose flavor next week. Most nations have mixed reserves of whatever is valuable but gold is a big part of that portfolio, it's seen as less risky of losing value.

You can come back 500 years later and gold still is valuable, the same cannot be said for other commodities which may be valuable in your 'era' but can change quickly with technological changes.

 

[Ras]

You need some non-perishable commodities that will last for centuries. We are talking about a nation here sxb and we need to secure it with the most valuable long-term commodity, not short-term commodities that can lose flavor next week. Most nations have mixed reserves of whatever is valuable but gold is a big part of that portfolio, it's seen as less risky of losing value.

You can come back 500 years later and gold still is valuable, the same cannot be said for other commodities which may be valuable in your 'era' but can change quickly with technological changes.

I'm far from an expert and you might be right but I still think it would slow us down.

All our trade, investment planning and FDI will be limited by our reserves capacity.

Sure FDI is a moot point in our case since even with reserves foreigners won't invest huge numbers in next 5-10 years anyways.

However this works great for us as well.

If it's hard to pull money out of the country people will use their Somali shilling within the country to avoid our inevitable high inflation.

Also this would prevent foreign companies from coming and taking over all our future indus tries once we start to develop our economy... Especially with the new Africa wide free trade agreement we just signed up for.

Having no reserves means Tanzanian companies can only extract shilling out of us while we're free to go their their country and pull out as much dollar as we want because they conveniently have enough dollar reserves.

This could be a hidden in the open tarrifs that benefits Somalis.

Also without mass imports into our country we can keep our labour costs low and have another advantage over our neighbors.


Backing a currency is usually done for 2 main reasons.

1. Pegging your currency to some internationally agreed floating value to assist in cross currency trade.

2. Convincing domestic users of the currency that it has a value...

1. Doesn't really matter that much when your currency is persona non grata in anywhere but Somali inhabited regions. Once it isn't we can play ball and buy dollar (+ some gold but that's a debate for politicians).

2. Doesn't really matter that much if you're able to convince the citizens that the value of their assets will stay stable... I.e. through strong institutions and a constitution that's almost as sacred to us like the Americans.

That might be difficult but possible and something we definitely need to do anyways.

 

[DR OSMAN]

I'm far from an expert and you might be right but I still think it would slow us down.

All our trade, investment planning and FDI will be limited by our reserves capacity.

Sure FDI is a moot point in our case since even with reserves foreigners won't invest huge numbers in next 5-10 years anyways.

However this works great for us as well.

If it's hard to pull money out of the country people will use their Somali shilling within the country to avoid our inevitable high inflation.

Also this would prevent foreign companies from coming and taking over all our future indus tries once we start to develop our economy... Especially with the new Africa wide free trade agreement we just signed up for.

Having no reserves means Tanzanian companies can only extract shilling out of us while we're free to go their their country and pull out as much dollar as we want because they conveniently have enough dollar reserves.

This could be a hidden in the open tarrifs that benefits Somalis.

Also without mass imports into our country we can keep our labour costs low and have another advantage over our neighbors.


Backing a currency is usually done for 2 main reasons.

1. Pegging your currency to some internationally agreed floating value to assist in cross currency trade.

2. Convincing domestic users of the currency that it has a value...

1. Doesn't really matter that much when your currency is persona non grata in anywhere but Somali inhabited regions. Once it isn't we can play ball and buy dollar (+ some gold but that's a debate for politicians).

2. Doesn't really matter that much if you're able to convince the citizens that the value of their assets will stay stable... I.e. through strong institutions and a constitution that's almost as sacred to us like the Americans.

That might be difficult but possible and something we definitely need to do anyways.

Well That's why America invited the world to dump it's gold in the federal reserve to insure it's currency. It's the largest gold reserve in the world and hence the most 'reliable' currency since it has something of value that everyone in the world can agree on. Currency per-sea isn't valuable untill everyone agrees it has value and usually they want to see gold somewhere to prove it's valuable.

That's why Somali shilling is useless, nothing backs it. It's essentially a piece of paper. I am not concerned about currency issue, it doesn't matter what currency we use. The fact we have no actual commodity in our reserve is a serious risk to any investor.

It's impossible Somalia gets any loans from private companies world wide who are risk conscious and when they look at our foreign reserve and see 30 million only in there and Somalia is asking for billions of loans, he will say 'doqon ogaden doolow laga qaad' @Teeri-Alpha . Noone is insane to take that risk. But if you had 200-300 billion dollars in there, it's different story. If you don't pay your loan off, he will go to the federal reserve and say Somalia defaulted on loan repayments and take a slice of your gold or USD. The two biggest assets are USD or GOLD. Some add Oil shares into their portfolio like the 'arabs'.

 

[DR OSMAN]

Somali Shilling isn't floating in the world market anyways. It's not in demand because we don't have strong trade network today where we are key player in the market and due to the lack of government it has made our currency even less reliable because anyone can print it without backing it against the dollar or gold. It's only used locally in Somalia for the S. But outside of Somalia, it's no better then 'toilet paper' for the world.

For example if you want to print 1 million shillings. U need to have 100 dollars in your pocket first because that is what Somalis 'pegg their currency against'. The agreed exchange value is not set by our central bank because they don't print our currency, loser maryooley prints it with his 67 IQ thinking it will mean something but it doesn't and that's why no-one uses the Somali shilling anymore inside Somalia because it's not reliable. What makes a currency reliable, well for starters ONLY ONE INSTITUTION CAN PRINT IT. A central bank not anyone else. It's called the government 'tender' and no-one else has the right to print it. Then they set a value for how much the shilling will trade locally and enforce it. That's domestic use only. Foreign use since it's not floating in the market, people will tell you to come with the dollar.

We are not foreign market trading currency and the main reason for that is our GOVERNMENT IS S HIT. All third world countries can not dare come to the international market place with their unreliable currency because they know your government is shit and they look at your foreign reserves and laugh at u

 

[Shaolin23]

@DR OSMAN how are you so sure Somalia doesn’t have gold and precious minerals im 100% sure they do there is absolutely no mining infrastructure in Somalia its not our fault a is land of apes

 

[SomaliMVP]

Somalia is poor because nothing gets produced there. It is one of the least productive countries in the world. Having a gold reserve has nothing to do with that and it would change nothing.

 

[DR OSMAN]

Somalia is poor because nothing gets produced there. It is one of the least productive countries in the world. Having a gold reserve has nothing to do with that and it would change nothing.

You need money to make money. The reason Somalia is unproductive is because it has no real asset or reserves in the world to kick-start production in the nation and investment. Everything in an economy starts with 'financial backing' we simply lack this and that's why their unproductive not because they choose to be. They want to work but they can't work because there is no industry and the lack of industry is due to no investor and the investor won't come because the country lacks any real 'assets' in foreign reserves. It's pretty simple really.

The people building Somalia are from the diaspora who are 'regular' folks who build small scale retail and farming and property. The big scale investments of billions of dollars isn't there because the government IS BROKE and only has 30 million in reserves to secure it's economy against loans.

Somalia government has two options. Begging bowl(which won't build super highways) but small scale things or start digging for gold in sanaag and create a 'reserve' for the nation so we can entice loans that has BACKING.

 

[DR OSMAN]

The taxes Somalia collects is only enough to sustain the government in terms of salaries, not build anything. To generate economic growth, we need large infrastructure and we simply can't do that without having a reserve of assets and gold or USD in reserves. That's why people create reserves because it means u can keep getting loans and secure the loan against your reserves to fuel the economy.

Think of it this way. If you have 20 billion dollars sitting in gold and usd in a vault somewhere. You go to the IMF or any Nation and say listen give me 1 billion, i want to build roads, he will say great, how u gonna repay me? he says i will repay every month this much and then he says fine. Show me some collateral, then somalia shows the 20 billion in reserve of gold and usd. He says, ok i will give u the loan. End of deal. U rinse and repeat this cycle constantly but u always need a reserve of assets in reserves to begin with.

So when we invest that 1 billion to build roads, this will create industries which means we get a surplus of workers will start to pay taxes and our govt tax coffer increases so he can keep servicing his loan while servicing the country in areas of security. What happens to poor countries is they are given the loan, they don't invest into the infrastructure but 'loot' it for themselves. This means the IMF keeps taking their 'reserve' away of gold and usd and they generated nothing in terms of industries to grow their country loooooooool, they are doomed to poverty levels forever. Eventually nobody loans them anything because they have bad credit ratings and their reserve is low and their government is corrupt who loots it for themselves the money not put into infrstructure of industries which will genreate 'growth' for the whole nation.

Waryaa stay out of this, your leelkase what do u know about economics and building a nation @SomaliMvp

 

[DR OSMAN]

The key to economic growth is have a 'reserve' so you can actually secure your loans against something to give confidence to the lender. The second thing is, good government, it's pointless if the government just pockets the loan, because the country will lose it's reserves eventually because you defaulte on loan repayments. U could also be given bad credit rating meaning you never get another loan again.

The third thing is you need good economic advisors who are not tribal because money isn't about tribe, it's about 'return on investment' and it needs to be put into industries where the growth can be 'proven' because waxaa dalka sugayo 'dayn inaad iska bixisid' ama 'sanduuqa dahabkaga ayaa la qaadan doona' which is all stored in 'america' federal reserve and outside of your juridiction so you can't 'stop it'

Once you lose your reserve, no nation will ever loan you anything because you have nothing to secure any loan against. This is what leads to poverty and means infrastructure fall behind, public services fall behind, investors all leave because their isn't adequate infrastructure, and then you start to see kids graduating from schools but have no job to go too. While the world stands by and looks at your leaders and says S AS @Shaolin23 SAID

 

[XamarWeeaboo]

@DR OSMAN I'm gonna have to stop you there. There is gold in Somalia, mostly in the mountains in the central and north-west of the nation, which haven't really been fully explored/exploited yet. As for the currency, that will improve if we can get a federal system where 1 currency is used and the borders are controlled. As for minerals, the UN and various nations have explored the nation during Barre's and the Allied occupation and have said that we posses one of the highest if not the highest levels of radioactive materials, which haven't been explored yet. The numbers are so significant that the US, Russia, France, Italy, China, Japan and Brazil are trying to own exclusive rights to mine there. Oil isn't that important, I'm sure we all know what happened to the Arabs when they found it- they lead a life of debauchery and sin, knowing that all is well since the oil keeps the $$$ coming in for them to play with. However, we should explore and set down some rules here:
1. 60-70% remains in Somalia and the rest will be sold ant a high price
2. The exploration/drilling will be done by a national company
3. The money earned will be invested into local communities effected by the drilling and the education sector- since I don't want the future generations ot panic when there's no more oil like the Saudis are right now.