Runaway Inflation Hurting Livelihoods in Puntland

[Goljano Lion]

Stop printing fake money, Puntlanders need to learn the laws of economics

http://allafrica.com/stories/200803200460.html

[Goljano Lion]

Local businessmen in Bossaso, the region's commercial capital, said the price of a 50kg bag of sugar had risen to 570,000 Somali shillings (US$21) against $15 a year ago, while a 50kg bag of rice was 720,000 shillings ($26) from $14 in March 2007.

The price of 50kg of wheat flour had nearly tripled from the equivalent of $12 a year ago to $33 or 900,000 shillings. "That is equal to the [monthly] salary of a policeman," a businessman, Liban Yusuf, said.

[RIIGHAYE]

Why do you care that Somalilander?

[yawle]

These dhabayaco have no a working ministery of finance. A rule of thumb in basic economics is the correlation between "demand" vs "supply". If the supply is greater than the demand, then what happens is deprecation of the value of the supplied goods, in this case the "fake money".

Those that are really hit hard by this runaway inflation is those that recieve their sallary in Shillings. The devaluation of the shillings from 15000 to the 1 USD a year ago to 27,000 to the 1 USD today, means almost 100% inflation (lost in value). A person who used to buy a loaf of bread for 10,000 shillings a year ago will need 20,000 to buy the same loaf. So in order for the person to get a value for his sallary, he needs twice as much pay in Shillings as he did a yearr ago. For instance the puntland melita who used to get 100K shillings a year ago will need 200K today in order to afford the same food he used to buy a year ago. But when does the Puntland administration increase salary? It is a double edge sword.