I read a Wall Street Journal article " A bet on peace for war-torn Somalia." I was a bit turned off by the tittle - why does every article about Somalia include the words "war-torn" or something equally negative in it. Nevertheless, I was happy to see an article about Somalia's growing economy; an economy overlooked and undervalued because of the protracted insecurity.
Overall the article is very enlightening - it discusses a new resort being built along Liido beach by an American businessman, Michael Stock. His resort opens this month, and includes a $500 per night villa. Stock says investing in Somalia "is like getting in at the bottom of the stock market." He's right about that. I predict population numbers, property values and demand for infrastructure like resorts will continue to climb, and Stock's investments will pay off. Of course, this all depends on stability and improved security.
The article seems to exaggerate the uniqueness of Stocks investing, at one point calling him "a mini mogul of Mogadishu." The reality is that there are many business moguls in Mogadishu investing in multiple sectors and who have put more into the economy than Stock. He is unique, however, in that he is not ethnic Somali. He's a white guy and he'll definitely face some obstacles including xenophobia, however, his "foreignness" may in some cases be an asset in a city as divided as Mogadishu.
The article also mentioned that Stock hosted Warren Buffet's son in Somalia, and flew him around the country. This is pretty amazing because it shows that more non-Somali investors are starting to look at Somalia. More FDI is critical for a country with such little capital to rapidly grow, and if investors with pockets as deep as Warren Buffet get into the market, it will open the way for much more investment.
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