Mogadishu is still a city in ruins. The scars of the decade-old anarchy in Somalia are visible everywhere.
By Rashid Abdi
BBC Monitoring, Mogadishu
Tens of thousands of internally-displaced people live in hovels at the capital.
Somalis are among Africa's most enterprising people
The sight of these desperate people begging on the streets and dependent on local and international charities is truly heart-rending.
Yet amidst all this, there is an abundance of optimism, resilience and energy rarely seen elsewhere.
I flew in from Nairobi to a dusty airstrip some 80 km south of Mogadishu.
Gunmen herd passengers into a shack which serves as a terminal.
Orphaned children have become beggars on the streets
There are no passport or security checks - practically anyone could walk into and out of Somalia.
The short journey to the city is a scary one. Cars drive like mad and there are no traffic rules. You can drive in any lane.
Roads are pot-holed and in some places the tarmac, built during President Siad Barre's era, has disappeared.
Ali Mursal, a young boy with an engaging smile, whose family fled fighting in the Lower Shabelle to a displacement camp in Mogadishu told me he goes for days without food and survives by begging on the streets.
Surprisingly, Ali's one strong wish is to go to school.
"I want to go to school and get employment to support myself and my family," Ali told me.
Unlike other members of Somalia's lost generation, Ali has been spared the fate of carrying a gun and dying young in the senseless clan wars that have decimated the country's youth.
Though relatively safe now, the city is still wracked by periodic fighting between the various clan-based militia groups.
Abductions are less prevalent than in years gone by, but foreigners need bodyguards to venture out of their hotels.
It is common to hear sounds of heavy gunfire at night as gunmen engage each other in their routine turf wars.
Yet the years of anarchy and remittance money from the estimated one million Somalis in the diaspora has unleashed a powerful entrepreneurial spirit.
In Mogadishu, there exists a free trade system unmatched anywhere in Africa, unfettered by government red tape and taxation.
As one commentator puts it: "The country has one of most dynamic economies in the East African region and is effectively an economy without a state".
Booming sectors include telecommunications, livestock production, water and electricity supply.
Money transfer agencies, locally called "hawala", are also flourishing despite facing constraints after the 11 September attacks after claims they were conduits for money sent to suspected terrorists.
The withering of the formerly socialist state has been a blessing for the new mercantile class in Somalia.
It is this class that is driving some of the most radical socioeconomic changes in Somalia.
They are supplying water and electricity in various towns, building roads, ports and airstrips and supporting local charities.
In effect, they have taken over the role of government.
Others are believed to be engaged in the nasty business of arms dealing and drug trafficking.
The Bakaaraha and Cirtokte markets, are sprawling shanty towns of kiosks selling anything from milk powder to the latest AK-47 models.
Halima Du'ale, owns a stall that sells clothes and shoes in Bakaaraha, and supports three orphaned children.
Ms Du'ale says traders live under the daily terror of freelance gunmen who extort money from them and sometimes set stalls on fire or shoot those who refuse to pay up.
Somalia's transformation is most dramatic in the media sector, which has seen a boom in privately-owned media houses.
Mogadishu alone has several FM radio stations and three major newsletters.
The most popular FM stations are HornAfrik and Shabele, while the most widely-read newspapers are Xog-Ogaal and Qaran.
Despite hostile conditions there is a vibrant media
This transformation is mostly driven by a small elite of well-educated and wealthy Somalis who have made their fortunes abroad.
Ahmed Abdisalam Aden, the urbane, charming and articulate managing partner of Mogadishu's funkiest FM station, HornAfrik, is Canadian-trained and speaks of the difficulties facing the new free media in Somalia.
However, Mr Aden hopes to make the station one of the best in the Horn of Africa.
HornAfrik has to toe a fine line - telling the truth, albeit cautiously, to ensure they not unnecessarily ruffle the feathers of the powerful warlords who run the city.
"Ours is a daily struggle to maintain independence in a very difficult situation," said Mr Ahmed.
Ordinary Somalis are fed up with the warlords and are clamouring for a government.
But the prolonged Somali reconciliation talks in the Kenyan capital, Nairobi, seem to have hit a deadlock and there is little prospect of a breakthrough between the various clan factions that are jostling for power.
Once thriving hotels and businesses have been destroyed by the turf wars
Abdi Rashid, a hotel receptionist is pessimistic about the outcome of the talks between the warlords.
"These guys thrive on anarchy and will never make peace," said Mr Rashid.
His feelings are also shared by Ali Ahmed, a taxi driver who summarises what ails the country
"Somalia is a nation held hostage by the gun and the clan."