Somaliland: Can the unrecognized state get out of poverty?




A recent of trip of mine was to Somaliland, an impoverished region in East Africa that has remained largely unrecognized by the international community ever since it unilaterally declared its independence on May 18, 1991.

In order to seek international recognition, the people of Somaliland have been stressing that what they did almost 28 years ago wasn’t seceding from Somalia, but rather “regaining” their previous statehood.

The former British Somaliland gained its independence on June 26, 1960, only to be stripped of its statehood just five days later and forced to combine with the neighboring Italian Somaliland to form Somalia.

Yet Somalia has remained in a state of de facto disintegration since 1991. Before that, the entire country was thrown into disarray amid its former dictator Siad Barre’s relentless crackdown on separatist forces across the nation.

Somaliland bore the brunt of the onslaught mounted by Siad Barre’s troops, and was almost reduced to complete rubble.

Even after nearly 30 years, there is still barely any modern structure left across Somaliland.

In its biggest city and capital, Hargeisa, all you can see is dirt roads around you, and the local marketplace is just no different from its primitive state a hundred years ago.

Somaliland has an estimated GDP per capita of only some US$300, among the lowest in the world.

Ironically, things in the neighboring Somalia, which has been plagued by civil war since 2009, could be even worse.

As a matter of fact, over the years there has been some degree of sympathy towards Somaliland among the international community, not least because of the fact that the tiny self-declared state has remained relatively stable and seen no major armed conflict or terrorist attack since 1991.

Besides, Somaliland has a well-functioning democracy, and the majority of its people have an English language proficiency of a certain degree. It is definitely quite something for a country that isn’t even recognized by the rest of the world.

Unfortunately, international sympathy doesn’t necessarily translate into foreign aid and investments.

For years, Somaliland’s economy has been unable to get off the ground, with the national unemployment rate standing at a staggering 85 percent.

In order to “create jobs” for the local people, the Somaliland government has mandated that foreign visitors must hire two local soldiers to accompany them when they leave the capital city and travel across other parts of the country as a means for their safety.

So is there really no end in sight for Somaliland’s poverty? Well, the answer is actually both “yes” and “no”.

It is because the country actually has proven reserves of oil and natural gas.

However, perhaps out of concerns about the potential political volatility, as well as the uncertainties posed by the country’s unrecognized statehood and the protection that can be given, most major international energy companies remain hesitant to embark on any big investment project in Somaliland.

Nevertheless, as some foreign contractors stationed in Somaliland have told me, some Chinese businessmen, who are acting in their individual capacity, have begun hiring local Somaliland soldiers in massive numbers to mine for natural resources and then shipping them out of the country directly.

Due to suspected corruption and its limited capacity to enforce the law, there is simply nothing the Somaliland government can do about it.

Meanwhile, since Somaliland is still largely seen as part of Somalia by the international community, whenever there is any outbreak of human epidemics or livestock diseases in Somalia, the import of Somaliland’s agricultural produce and meat products are hugely affected as well.

Likewise, although Somaliland has one of the best located and most strategically important ports in East Africa, i.e. Berbera, the great powers would still rather establish their military bases in Djibouti out of worries about the political uncertainties in Somaliland.

This article appeared in the Hong Kong Economic Journal on March 13

Translation by Alan Lee


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