A Microcosm of Emirati Expansion in the Horn
Berbera is just one city of only about 60,000 inhabitants, but its experience provides a microcosm of the kind of problems that Emirati imperial expansion has had—and will continue to have—in the Horn. For example, DP World’s actions have had an important bearing on the political economy of Berbera and governance structures in the area. In the early 1990s, following Somaliland’s declaration of independence, Muhammad Haji Ibrahim Egal was elected by clan elders and a constituent assembly to be the state’s second president. He was initially given two years to embark on the daunting task of building a viable state.
At this time, Somaliland’s vital livestock trade recovered at Berbera Port, largely as a result of Saudi Arabia opening its markets to Somali meat. In order to extract revenues from this growing trade, Egal created the Berbera Port Authority in 1993, establishing it as an autonomous body directly under the president’s office, and thereby eluding political control from the legislature.
According to the scholar Mark Bradbury, Egal did this without opposition because “the Sheikh and Borama conferences”—peace and reconciliation agreements in Somaliland in 1992–93—“had reaffirmed Berbera’s status as a national asset and because Berbera lies within the territory of Egal’s own clan.”84 By September 1995, the Berbera Port Authority provided Egal with an immediate revenue stream of approximately $10–15 million per year and was by far the government’s biggest source of revenue.85
Yet, despite this largely independent source of revenue, much of Somaliland’s politics were dependent on the power and cooperation of domestic livestock traders, largely based in Berbera. In fact, de Waal caricatures the origins of the Somaliland Republic as a “profit-sharing agreement among the dominant livestock traders, with a constitution appended.”86 These were the same traders that largely funded the Sheikh and Borama conferences and demonstrated a keen interest in keeping Berbera free of conflict. They loaned the fledgling government $7 million, and Berbera’s port and business district were Somaliland’s first weapons-free zone.87 As such, the Somaliland authority, “acting de facto at the behest of the business community,” had successfully controlled the level of armed conflict and violence in the region.
This domestic social contract, however, has come under a great deal of pressure since then, and it seems that the DP World agreement will further transform state-society relations and the balance of forces in Somaliland. In the first few years of this century, the government attempted to sideline the domestic business community by imposing taxes on the private sector and making backroom deals with foreign corporations. It even tried to impose a monopoly on livestock exports. The business community successfully resisted these efforts, but it signaled the executive’s desire to seek external rents, risking a “relapse into an oligarchic crony system.”88
However, in a recent interview, de Waal noted that the new, elite business classes are more concentrated in rentier industries such as real estate, oil and gas, the new Coca-Cola factory, and telecommunications. Even Emirates-based companies with close links to the monarchy, such as the state-owned Mubadala, RAK Gas, and International Petroleum Investment Company have been engaged in oil and gas exploration activities in Somaliland.89
Likewise, domestic capital, such as the Dahabshiil Group—the largest money transfer business in Africa, headquartered in Dubai—has thrived in the changing investment climate, exerting control over large sectors of the economy, such as telecommunications, import licenses, banking, and real estate. Following this trend, it appears that the new deal with DP World has strengthened the executive and elite, rentier business classes at the expense of older livestock merchants and the majority of the national business community. In fact, the Somaliland Chamber of Commerce, which represents the national business classes, has seemingly been absent in negotiations surrounding DP World’s agreement to manage and develop Berbera Port. By contrast, with a 30 percent stake in the port, the government and well-connected business elites have been able to secure an independent and growing source of external rent without having to share political power with other sections of society.
Both DP World and the Somaliland government have emphasized the development of Berbera Port as a necessary step toward transforming the area into a regional corridor and gateway. Rather than exclusively relying on livestock and informal trade, the Somaliland government anticipates these investments to generate further commodity circulation and investments in other sectors. Yet, regardless of this economy of anticipation, the DP World investment, as it currently exists, centers largely on matters pertaining to livestock and food security in the Gulf.
For example, the livestock trade between Ethiopia and Somaliland is concentrated in Togochale, the same town that will be connected to Berbera Port through a road funded by ADFD. In fact, the export of sheep and camels to the Gulf has traditionally constituted the port’s main activities and revenue generators—in 2014, earnings from livestock exports through Berbera Port exceeded $375 million, generating approximately 85 percent of Somaliland’s foreign export earnings.90
Still, it remains unclear whether livestock traders and farmers stand to benefit from the new port arrangement. The upgrades at the port, DP World’s connections to other ports in the Gulf, the company’s investments in Berbera’s water facilities, and the new highway linking Somaliland and Ethiopia will undoubtedly smooth the flow of livestock from the Horn of Africa to the Arabian Peninsula.
Even the recent establishment of a joint livestock bureau between the Emirates and Somaliland is set to assist the industry in matters related to health and the regulation of livestock export. In 2016, when Saudi Arabia temporarily banned meat imports from Somalia, citing health issues, livestock traders and farmers lost access to crucial markets and a source of badly needed foreign currency. While initiatives like the joint livestock bureau may help mitigate against such instances, one must question the future of the industry under increasing Emirati control and regulation. There is no evidence to suggest that the main civil society organizations and associations have been brought into the fold.91
As such, the entrance of foreign capital into the livestock industry in Somaliland may further marginalize the power of the domestic business community and its associations. Moreover, with Arab states of the Gulf increasingly preoccupied with food insecurity, Gulf-based conglomerates have sought control over all stages of production and circulation, from farm to shelf. As Hanieh, the scholar, notes, food security discourse in the GCC “has validated state-led support of the largest capital groups involved in agribusiness activities,” with agribusiness conglomerates purchasing land and integrating into wider logistics chains.92
Today, some of the biggest players in the livestock industry are intimately linked to patterns of capital accumulation in the Gulf. Indhadeero Group, Somaliland’s largest trader and exporter of livestock, is supported by diaspora capital in Dubai. For many years, the company held a monopoly over livestock exports in a joint venture with a Saudi investor, thereby extracting millions of dollars in revenue from exports to the Saudi market. While the new joint venture and DP World’s arrival may change the landscape of livestock politics in Somaliland, it seems unlikely that domestic livestock merchants will regain the position they once held in the country. Rather, the current arrangement will likely further deepen market relations between Somaliland and the Gulf, whereby the contours of the livestock industry—and the broader economy—are to be circumscribed by the profitability and requirements of Gulf capital.
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