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ACCORDING TO A United Nations Development Program report, about 43 percent of the Somali population are estimated to be under extreme poverty (23.5 percent in urban and 53.4 percent in rural and nomadic areas), having a per capita income less than $1 (purchasing power parity, PPP) per day. The general poverty, measured as persons having per capita income less than $2 (PPP) per day, is estimated at 73.4 percent (60.7 percent urban and 79.9 percent rural and nomadic). Translated into numbers, five million people in Somalia live in poverty, 1.4 million of them in urban and 3.6 million of them in rural and nomadic areas.

In 1991 the state of Somalia collapsed totally and has not been resurrected since. During 1991 and well into 1992, most of Somalia was ravaged by inter-clan warfare, banditry and widespread famine that claimed the lives of about 270,000 Somalis. The violence disrupted economic activity and agricultural production and led to another famine that killed more than 300,000 people. The violence not only has reduced the productive capacity of the economy and worsened the operative environment for economic activity but the damage sustained by the infrastructure has also led to a breakdown of institutions to provide goods and services.

Two circumstances led to the Somalia famine of 1992. The inability of any single clan to form a government following the ouster of former dictator Siad Barre plunged the country into a civil war centered on the capital city of Mogadishu. Its is estimated that about 30,000 people died in these confrontations and the total number of deaths would not have exceeded the stated number if not for a drought that had devastated the country roughly around the same time. Because of the volatile political situation it was nearly impossible for relief efforts to succeed in getting food to the vulnerable without incident. Even after international agencies managed to send in relief supplies, they were subject to looting by various warlords who began using food as a weapon by selling it on the black market for profit.

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War has created widespread poverty: a refugee at the Ethiopia-Somalia border seeking relief.

Droughts occur very frequently and lead to water shortages and starvation, particularly in the rural communities, which are more dependent on rainwater and grass for their survival in the raising of livestock and cultivation traditions. In Somalia, devastating floods often follow droughts, which has mainly affected southern parts of the country where the Juba and Shabelle flow. More recently, another natural disaster affected Somalia. The 2004 Indian Ocean tsunami killed an estimated 150 people, displaced about 5,000, and affected a total of 54,000 others in the northeastern coastal region of Somalia. In addition, the tsunami inflicted substantial damage on the Somali fishing industry, destroying a number of fishing boats and equipment.

Although an accurate picture of minority groups residing in Somalia has not yet been established, estimates show that they constitute one-third of the total Somali population. These minority groups include Bantu, Bravenese, Rerhamar, Bajuni, Eyle, Galgala, Tumal, Yibir, and Gaboye. Many of these groups live in conditions of great poverty and are exposed to numerous forms of discrimination and exclusion.

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