Privatized State Formation in Somaliland
GCC rivalries may help explain the recent fracturing of relations between Mogadishu and Somalia’s federal states, but they tell us little about what the future of these proto-states may look like. Examining DP World’s agreement to operate Berbera Port in Somaliland, however, provides an important entry point into thinking about how nascent state formation in this region is being circumscribed by Emirati imperial power and commercial interests, and their unintended consequences.
DP World’s investments may even be a sly attempt to boost Somaliland’s ambitions for independence.
Although Somaliland declared independence from Somalia in 1991, the international community has yet to recognize this status, and DP World’s investments represent a significant development in the future trajectory of the northern state. They may even be a sly attempt to boost Somaliland’s ambitions for independence.64 As noted above, Berbera Port’s integration into regional and international circuits of trade, and as a significant node in an Emirati-led military network, has important ramifications for the development of the nascent state. For example, DP World has invested significant resources in developing the Berbera Special Economic Zone.
Following an agreement signed between DP World and the government of Somaliland in 2018, the zone is set to be “modeled on DP World’s Jebel Ali Free Zone and aims to attract investments, encourage trade, create new jobs, and position Berbera as a new value-added gateway port for the region,” in the words of DP World’s promotional materials.65 In order to attract business, it advertises access to foreign labor, corporate tax incentives, incorporation of fully foreign-owned companies, exemptions on customs duties, and the free movement of capital. As such, it is unclear whether the project will forge forward and backward linkages with the local economy, or whether it will function as an enclave for global capital and as an external source of rent for the government and landowners.
The agreement with DP World also comes as part of a broader deal with the Emirates, entailing significant implications for the wider process of state formation in Somaliland. According to Saad Ali Shire, Somaliland’s minister for foreign affairs and international cooperation, the deal will also build new roads connecting the port to the Ethiopian border, as well as funds for education and health care programs.66
For example, earlier this year, the governments of Ethiopia and Somaliland launched a $400 million road project linking Berbera Port to Ethiopia’s border town of Togochale, funded by the Abu Dhabi Fund for Development (ADFD), the emirate’s foreign aid agency.67 These investment pledges by ADFD were conditional on the exclusive twenty-five-year Emirati lease on the military base in Somaliland, thereby demonstrating the intimate links between emerging geographies of war and trade.68
DP World itself donated $1 million to upgrade and equip the Berbera Hospital, sending specialized doctors, paying their salaries, and even providing the hospital with its first gynecologist. The company also invested $1 million to upgrade the water infrastructure in Berbera, building five wells and a water connection system to be used primarily for livestock—the backbone of Somaliland’s economy. DP World is not only shaping the contours of the state through infrastructural investments but is also by far the biggest private-sector employer in Somaliland, employing 1,300 permanent employees and 1,200 “casual laborers” in the port.69 In effect, by constructing highways, water facilities, and expanding medical care, the main features of the nascent state are, in large part, being developed by the Emirates—but through the investments of a supposedly private enterprise.
[su_button url=”https://saxafimedia.com/constructing-commercial-empire-uae-red-sea-horn/8/” style=”soft” size=”12″ wide=”yes” center=”yes” text_shadow=”0px 0px 0px #FFFFFF” rel=”lightbox”]CONTINUE READING ON THE NEXT PAGE >[/su_button]
