Somaliland: Reflection on Berbera Harbor Concession Agreement in anticipation of changes in Horn Africa

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Port of Berbera (file image)
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By Dr. Mohamed Osman Fadal

The Berbera tripartite concession agreement that entered Somali Island with the DP World of the United Arab Emirates and the Ethiopian government is regarded as a game changer by many Horn of Africa international analysts. For Ethiopia as a major breakthrough in obtaining an interest in the strategic Berbera port; for Somaliland in the opening of its first major inlet to the global economy and in creating a significant potential to break the political deadlock for its quest for international recognition and for the Emirates it’s a big one achievement in its quest to overlap geopolitics as local power in the Horn of Africa and the Middle East. Internationally in Somaliland, the deal initially affected much, mainly due to the lack of transparency in its incubation period, and perhaps because the financial figure mentioned in the transaction ($ 442 million) was expected by Somaliland people. However, if we look at the bigger picture, the development potential that can be realized in this tripartite agreement is enormous. This partnership also agrees with the unprecedented regional and global mega wealth creation trends.

The investment of US $ 442 million is expected to bring Berbera Port capacity to competitive international standards. The port currently handles 150,000 TEU containers per year, but with such an investment, the capacity will expand to 1 million TEU 20 and 40 foot mixed container units. [1] The port expansion project will take place in two phases. The first is the construction of 430 meter cabin, which can offend any two ships at any time. The full extension will include port capacity up to 800 meters long, which can accommodate five vessels at any given time. The port expansion is expected to be completed by 2020. According to Temesgen Yihunie, Ethiopia’s Logistics Coordination and Monitoring Director at the Authority, Berbera is planning to handle 30% of Ethiopian import and export business. [2] The transaction includes an 12,2 km economic free zone, modeled on Jebel Ali Free Zone (JAFZA) to trade and investment in warehouses, logistics, manufacturing and related businesses [3] .

  1. Background

The horizon of Africa as a result of its location in the world, which claims to be the globe of the world, was a sought after region for control in the history of world powers. and is still today. In the expansion of European powers to colonize Africa, the Horing was an appreciated area whose attraction was further strengthened by the prospect of the geo-strategic value of the Suez channel as well as its predominance in the transition to India and the historic Christian Empire of Abyssinia. So we can say there was a localized control for the Horn of Africa in the late 19th th Century between the British and the French and Italy as a latecomer, which intersect each other along the Red Sea, Gulf of Aden and East Africa. Before the arrival of the European hegemony in the region, the kiss was also under the influence of the Ottoman Empire.

In the two-pole superheroic world of the Cold War era (the US and the Soviet Union), the Horn Africa was also a seriously contested territory, of which geo-strategic control was sought from both sides. During that period, the region’s interest was further strengthened by adjoining the Arab Gulf-oil producing region and the main supply route to Western countries. The Soviet Union, due to its alternative ideology and free of luggage of colonial history, challenged the traditional Western rule in the region and, on its side, won new independent states like Egypt in the upper parts of Horn and the Suez Canal. Somalia had the longest coastline in the region and added geostrategic benefits to both the Indian Ocean and the Gulf of Aden’s maritime routes and Ethiopia, which also became the place of the Organization of the African Union, to its historical importance.

These countries all started as solid members in the Western Camp in the 1950s and 60s, but later began their engagement with the Soviet Union as the best bidder in military support and also as resulting from its affinity with new anti-colonial elites emerging from these countries. A clear example of this super-power competition is shown in the case of Berbera Port City. The port city’s strategic importance was used by the British before it occupied the entire island of Somalia. “During the year 1890, an underwater cable from Perim Island in the Gulf of Aden to Berbera was laid as part of a communication system connecting England with Aden and further to India and Australia.” [4] Later the Berbera hosted the BBC East Africa Relay Station. At the height of the Cold War Sera in the 1970s, Berbera became the home of a great Soviet military base, but changed into the 1980s as an American military facility until the Somali state collapsed. By the end of the Cold War, and the beginning of the era of monopolistic superpower world order, the interest and international competition for the Horn of Africa has decreased. A new geo-political situation also occurred in the Horn of Africa: Eritrea appeared on the scene after the break-up of Ethiopia, which drove the country in the country after losing the Red Sea port of Assab and Massawa . Somalia implied, with Somaliland its own separate independence road, which has not yet been recognized by any country but with all intentions and activities as a de facto sovereign state. The rest of the state of Somalia, after spending two decades, except Puntland, is currently restoring a federal state system, with a weak central government and regional states that are in fact their own Masters are and can carve their own powers within that federal system.

  1. Somaliland – The Hosting Country’s Socioeconomic Challenges

Declining Main Resources of Income

Recent World Bank Economic Statistics analysis of Somaliland came to the following conclusions: In terms of Gross Domestic Product and Employment: GDP for 2012 is estimated at US $ 1.4 billion (current US $ prices); GDP per capita $ 347. In terms of sources of GDP: 29.5% comes from livestock industry, followed by 20% of total sales and retail and 8.2% of crop production. These are not encouraging figures, although they are just rough estimates.

At least 45% of Somaliland’s population is directly linked to livestock farming for their existence, an economic sector that is highly sensitive to climate change. The traditional production system of this sector is dependent on two declining sources: Rainfall and Rands. Rainfall is much cleaner than usual and is increasingly unpredictable. So much so, new concepts like “El Nino” and “La Nina”, both global climatic conditions attributed to the gravity of both droughts and floods, are becoming. mainstream in the local climate steel. Over the past few years of consecutive droughts starting from the western parts of Somaliland and devastating effects in the eastern regions of Sanaag, Sool and Togdheer, last year, realized that droughts are not so many years of catastrophic event , but here is to stay with a maximum of one or two years postponement. It changes the core rural production system of livestock dependence on the lives of nearly half of the population and the national development strategy, which also plans to contribute at least 29.5% of GDP to livestock. The anecdotal evidence from the eastern regions where livestock economy is a source of income and work to a large proportion of the population is that families with 600 heads in Togdheer end with only about two dozen heads who survive the last drought, and in Sanaag, with normal ownership of 1000 heads, survival of less than 10 percent.

In the country, the population experienced meat increases during the dry season and subsequent years, which affected the nutritional status of the poor; drop of livestock sales in large markets such as Burao and Hargeisa. This indicates the loss of income for a large number of families in cities, the loss of transport business for truck owners and the loss of employment for export infrastructure in the Berbera port. In general, the drought, the loss of important revenue for Somaliland government, means something that will restrict the funding of the ambitious programs expected of newly elected President Musa Behi. The contribution to government revenue from livestock exports in previous governments is estimated at 8 million USD in 2015. In addition to the loss of state income, the declining livestock sector will be a source of sustainability directly or indirectly for more than sixty percent of the population means an urgent challenge for the Government to find other lives and resources. This will affect urban poverty and risk for mushroom stability.

Dried displaced people in the town camps now driving Sanaag, Togdheer and Sool already drive to the cities to populate the swelling slums in the capital Hargeisa and all the other big cities as a growing needy urban population. strengthened. As if it was not difficult enough, the recent cyclone, which hit both the interior and the coastal Awdal region, left desertion uncomfortable in Somaliland along its way. It rejected the livestock crests that formed the mainstay in the region. destroy kiss settlements, cattle the farming land turns it into a desert of veins and dry wadies and falls the tree-level vegetation. The rest of the people who survived from the cyclone are also merciless. They will drive to cities.

It is also worth mentioning that the remittances that have long been recognized as a prominent feature of Somali resilience driven by its relationship and extended family interdependencies decrease for various reasons: first, the The younger generation of the diaspora has no attachment to the support networks of the traditional Somali system, and secondly, the ease of its transmission becomes an increasing past due to the imposed anti-money laundering (“AML” ) and Anti-Terrorist Financing (“ATF”). ) Regulations, whose compliance requirement is beyond the financial and technical capacity of the informal nature of most of the Hawala system.

The youth unemployment silence and the Agony of “Tahriib” [5] phenomena

The job opportunity, especially in the youth sector, is serious. From ILO 2012 estimates [6] at the age of 25-34, only 35% men and 15% are female in employment. Adults are not better, some estimates come true: 35-54 year olds work: male 42%, female 23%. This situation is not one that gives young people confidence in a meaningful life in Somaliland and therefore it takes a great deal of risk to cross deadly deserts. They fall into the hands of extortion-like gangs called by Somalis as “Magafe” [7] in Libya. This creates unconditional misery and trauma to the parents, while society generally suffers from the loss of his future generation, repayment of loose ransom and enduring enduring mourning of suffering relatives in his neighborhoods who lost their loved ones.

The Khat Fall as General Manager of Poverty

It is determined that Khat consumption is the number one problem facing Somaliland today. It is detrimental to society’s health, social life and economic well-being. However, there is a common sense of helplessness about how to deal with it in a rational way. None of the Somali governments have seen it as politically and practically feasible to challenge the status quo. In addition to the terrifying task of confronting the people to ask them to change such a deeply rooted habit, governments themselves are hooked in various ways: fist due to the dependence on the substantial tax revenues arising from it, which is about 20% of the national budget (Jeffrey 2015) [8]; Secondly, governments do not see an easily available alternative source of food for the thousands of people who are living in the Khat business [9]. Yet, the government, the wider development-oriented national elite and the international donor community have no justification for tolerating a drug recognized as the strongest driver of poverty in Somaliland society. This can easily be demonstrated by simply indicating in the development process. The amount of hard currency spent annually on cold, as estimated by Hansen (2010), amounts to $ 50 million annually, while in the same year the Somaliland government budget was among the US. $ 50 million [10]; similarly, Jeffery’s estimate in 2015 is slightly higher at US $ 52 million a year, which he obtained from the Somaliland Ministry of Finance [11].

Further, negative health effects of Khat consumption show drastic drainage in national resources; his health problems manifest as diseases in the gastrointestinal tract, cardiovascular, oral and dental, neurological, psychiatric and reproductive systems. The economic impact of loss of labor productivity and working hours, as well as the burden of caring for psychosocial patients, often within family units, exacerbates its detrimental effect on Somaliland society.

  1. Roads to the Berbera Port Concession Agreement Triparticle .

Berbera is on the route to and from the Suez Canal and a gateway to the Indian Ocean, the Indian subcontinent and the Arabian Sea, thus & # 39; An enormous geographical and maritime trade interest. Yet, the development that it deserves has overlooked it for centuries. Similar strategic ports like Singapore, Dubai and Djibouti have grown into infrastructure and capabilities to world standards and played a key role in the economic development of their countries.

The short-term superpower leases have led to small expansion of port facilities and the construction of a military airport with one of the longest roads in Africa, which strengthened Berbera’s strategic importance. Apart from rental income and military assistance arrangements with the ruling Siad Barre government, however, none of these occupations resulted in any significant economic benefits that accrue to the people of Somaliland, than northern Somalia.

The recent renewed interest shown by various actors is mainly economical. Some of the concerns that emerged in early 2011 include a combined Ethiopian and Chinese initiative with an ambitious plan that includes the development of the Berber port, the construction of a railway line to link Berbera to Ethiopia with the aim of relieving the country’s status of Ethiopia and accessing huge market potential and also to the heartland of Africa. The importance of the French Ballore Africa Logistics company even preceded it, with long-term negotiations, which came to President Silanyo’s visit to France in January 2014, which led to France in January 2014, leading to & # 39; An early Memorandum of Understanding, allegedly signed on 5 th February 2014 by the former Somaliland Foreign Minister at the company. Both these initiatives and other lesser-known attempts to manage the Berbera Gate never came down.

Following the above-mentioned stakeholders, the UAE DP World company became a major contender in the Berbera Development and Management Competition, and a more successful one. The Government of Somaliland entered into an agreement with DP World in May 2016 with the approval of a highly polarized joint session of the two houses of the Somaliland parliament. While the full extent of the agreement has not been released in the public domain, the core offer, which is expected to be the case for the UAE, has been the investment of US $ 442 million on port development, complemented by further investment in the improvement from Berbera -Wajaale Road, and various other social services-project support items, including water improvements. [13]

Another important factor the UAE gave the forefront of the negotiations are the long-term trade and cultural relations as well as the geographical proximity factor between Somaliland and the UAE and other Gulf countries. [14] In addition, the shock factor of the Somaliland diaspora in the UAE in this venture can not be underestimated, as stated clearly in the Joss Master et al. (May 2018): “This tendency to look at Africa for some of recovering the Peninsula’s petrodollars in The form of investment was further strengthened by the hundreds of thousands of Ethiopian, Sudanese, Somali and Eritrean professionals working in the Gulf. Many of these – especially Sudanese in Abu Dhabi, East Saudi Arabia and Qatar and Somalis in Dubai – were the most important clues for advice and channeling capital inflows from the Gulf economies in their countries of origin.

Ethiopia and Berbera s strategic proximity:

Of all the claimants to develop the Berbera gateway, access to Ethiopia’s major internal market and the business potential of its confined status has considerable value g eheg any transaction to acquire berbera. Ethiopia was not a passive bystander, but was always considered as an important party number one by Somalilanders. However, as noted in the literature, it lacked the financial and human resources muscle to do it alone in the mega investments needed to bring Berbera to an international standard container handling port. [16] In addition to resource paucity, it is argued that Ethiopia has chosen an indirect strategy to give a third party the lead in achieving its goal of gaining interest in the Berbera port of Somaliland. insured; It is to save itself from the political implications of dealing with Somaliland directly, as an acknowledgment, something that of course is not prepared to do at this stage.

Ethiopia is a country-by-country and thus needs a seaflot for its transit. According to the World Bank, Ethiopia is the tenth highest growth country in the world, experiencing a growth rate of 10.3 between 2006 and 2016. The neighboring Djibouti handles at least 90 percent of its transit trade with the outside world. With such a volume of rapid growth, it is therefore clear that Ethiopia will seek alternative outlets for its growing trade. Berbera is regarded as a highly preferred option among many ports in the Red Sea and East African Indian Ocean, due to the proximity of Ethiopia. In addition, Ethiopia has a close relationship with Somaliland and is the first country to set up a diplomatic mission in Hargeisa. Berbera handles small quantities of imports for Ethiopia. The bulk of this is UN food aid, which started in the early 1990s.

In addition to relieving the possible collapse of its transit trade in Djibouti, it is also important for Ethiopia to get alternative competitive ports for its transit trade. As evidenced by John Burgoyne’s study, Ethiopian manufacturing costs of products such as clothing, footwear and leather goods are lower than China and India, but export logistics costs are higher. [18] Therefore, access to the Berbera Gate should provide Ethiopia with a more competitive logistics cost of its transit, in order to improve its competitive edge in global export markets. It will further support Ethiopia’s goals to achieve a middle income status in 2025 through export-led development of infrastructure and energy. [19] In addition, Berbera’s geostrategic location also uses Ethiopia’s equally important geopolitical goal to portray its economic and political power in the Horn of Africa and the rest of the continent. To have a 19% stake in Berbera Port, Ethiopia will bring closer to this goal; It is interesting to note that since March 2018, Ethiopia gained an interest in the Somaliland Berbera port, it is a trend that benefits Ethiopia in its negotiations with other ports in the region. [19659000]

Expectations of the Somali people from the Berbera agreement

Now the question in every Somali islander’s mind is that we have the best we had, so what do we get in exchange for that. That question must also be raised in both partners’ power corridors. Berbera is not only a port, it represents the hope of Somali people to recognize themselves in the international community’s recognition as well as a vehicle to lift them from the pain, just as other similar equally strategic ports, which developed developments. and prosperity for their people like Dubai and Singapore, and maybe Djibouti is heading for such a success.

The challenge facing Somaliland is to go beyond the seductive Ethiopian marketing strategy to utilize its more than 100 million population markets and to determine how the Somaliland people benefit from this market. In the eyes of the Somaliland people, during the three decades of warm political and security relations, business cooperation between the two people was not very hearty. How the small population of Somaliland has access to the 102 million Ethiopians is not yet clear to them. The overall impression in Somaliland has been up to now, which small trade the two countries have is one-way traffic and it’s not a healthy business relationship. The other common feeling is that the Ethiopian government does not take steps to alleviate the tension without ignoring the failure of the successive Somaliland governments as counterparts to the Ethiopian government to deplete trade in Ethiopia and Somalia to combat

To begin, we must reach the free movement of goods and services across the border between the two countries. It is time for the two countries to sign a trade agreement (PTA), which also protects the interests of each country. If the Berbera agreement leads to a mutually beneficial situation for the two countries, the first priority should be given to negotiating a PTA addressing the details and concerns of every society in its terms. Such negotiations will determine the core components of such an agreement, including & # 39; rules of origin & # 39 ;, & # 39; serious injury claims & # 39; consideration of & # 39; balance of payments & # 39; and especially robust dispute resolution mechanisms.

As misconceptions are usually abundant with respect to the fairness of cross-border trade between neighboring states and societies, the two governments must lead public dialogue in each of their own countries to the merit and perceived demerits of such trade to discuss On the Somaliland side, the issue of Khat often discusses trade talks with Ethiopia. In addition to the perception that cheaper agricultural products from Ethiopia undermine the investment and growth of food production in Somaliland. On the Ethiopian side, there may be concerns that Somaliland’s free market economy will open up smuggling goods in Ethiopia. The cattle export trade was also a sensitive issue in dealing with Somaliland. The PTA framework can be used to regulate trade and overcome the above concerns to move towards a state of higher value adding open trade between neighbors, with benefits in wealth creation beyond the perceived short-term accidents.

The UAE is a country with a deep trading culture; In modern times, it is recognized as a leadership with profound business intelligence and one of the most sought after destinations of investment flows in the world. Their intense and successful attempt to acquire the Berbera port of Somaliland is evidence of their vision to remain an important part of global maritime trade and the leverage of Berbera’s major geostrategic importance offer. Together with the visionary business strategy, DP World Port’s management management arm, the DP World, has already highlighted the Berbera Development Strategy: Berbera in a competitive world-class container handling port with an economic free zone to Create a business kernel and port. to Africa. In the words of the chairman and chief executive of the DP World Group, Mr. Sultan bin Sulayem, “Somaliland’s developmental opportunities … parallel to the start of our own growth in Dubai and the UAE.” We added that we are a trade and mr. Sulayem further explained their vision in the Berbera Deal. It represents their interest in expanding their footprint in Africa. The Berbera port’s modernization will work out the growth of the region’s economy. He identified the Deal as a breakthrough to unlock the region’s largest economy, Ethiopia. [21]

The above words are in line with the Somali people and the government’s developmental objectives are not only for Berbera but also for the virgin coastal area of Somaliland in its entirety. This is an opportunity to link to the Dubai industry core and its investment potential – an awareness of the global access required by Somaliland. Berbera Gate and Free Zone Development can present the motherhood proposal for the global trend model of the development of the Free Economic Zone, in the image of Jebel Ali Free Zone, for the rest of Somaliland, and may provide other expansion Free Zone services, both inland and offshore, and it is also a commitment that Somaliland is open to global affairs.

  1. According to a strategic partnership for the Horn of Africa Economic Integration:

The Berbera Tripartite Agreement can lead to & # 39; a detoxification of the potential of all Somaliland coastal economic transformation. In the same way, it can also provide a bridge to the UAE economy, not only to Ethiopia, but to the depths of Africa through the Berbera Gateway and the Free Zone Gateway. But to open the Gateway widely, the Somaliland coastal area needs to develop to accommodate such potential. The region is well placed to grow with the predicted African economic transformation boom, as well as the Saudi Arabian Development Initiative of Crown Principle Salman, which develops 2030 trillion dollars. The onus is with Somaliland’s leaders not to allow the new wave of wealth creation in the region to go through the Somaliland people again, just waiting for “xeedhyaha gingiman” (untouched amble resources) in the middle of overwhelming poverty. [19659003]

The Somaliland comparative advantage in trade with Ethiopia lies in marine products, such as an abundance of marketable fish, both culinary and exotic ornamental aquarium fish; salt and other seafood products, including the trendy seafood. The transformation of the Berbera transaction into a more comprehensive development and investment vehicle on a much larger scale will attract international investment not only to develop the established Berbera corridor but also to & # 39; An integrated economic and business transformation for the benefit of the broader Horn Partners. This means the integration of other Somaliland ports and coastal settlements such as Zeila, Bulahar, Lugahye, Karin, Shalao, Hiis, Mait, Onkor, Las Korey and Elanyo in the economic transformation potential of the Berbera Tripartite Agreement.

Such economic transformation goals can focus on three overarching economic strategies. First, focus on transit trade to provide greater access to the sea to serve the Ethiopian people from east to west with the vision of reaching deeper in the countries of Africa’s origin; Secondly, a strategy for the development of coastal industry, including the use of fishing resources in the area in cooperation with all neighboring countries; The third focuses on the tourism industry, which is another sector with great potential that the three partner countries can collaborate to develop and are suitable for the aspects of economic integration of Horn of Africa. The UAE offers a highly developed tourism industry and a tourism-able population that appreciates the virgin and high value tourist landscape in Somaliland, including pristine and unspoiled beaches that decorate the Gollis mountain range (house for biblical frankincense gorge production) mountain hiking activities, the culinary culture of which Somaliland only scratched the surface, but it is believed to be along the length of the Gollis range of mountains waiting to be discovered as well as the traditional nomadic culture not far from the coast off is not. uit in die karaal, beleef 'n lewe wat nie voorgestel word in die wêreldwye wêreld van vandag nie. Ethiopië bied aan sy kant 'n relatief ontwikkelde toerismebedryf deur sy wêreldbekende historiese terreine, natuurlike toerismehulpbronne, insluitende berge, mere, en die Blou Nyl met die Grand Ethiopian Renaissance Dam (GERD), asook om die mees uiteenlopende kulture in die wereld. Hierdie vennootskap bied 'n belegger se goudmyn.

Om die enorme Somalilandse kus- en binnelandse ekonomiese transformasiepotensiaal te benut, is die verskaffing van veilige energie krities en kan dit slegs deur die hidro-elektriese toevoer van Ethiopiese GERD geakkommodeer word. 'N Veilige en koste-effektiewe energievoorsiening is die grootste struikelblok om Somaliland se ekonomiese potensiaal te ontsluit.

Security and Economic Interaction

Somaliland branded itself as the peaceful enclave and stable polity of the Somali region, most of which is plagued by conflict and instability. It warded off successfully the phenomena characterizing the Somali region, such as warlordism, Islamic fundamentalism, piracy and clan fiefdoms[22]. These phenomena thwarted any efforts from most Somali regions to recover from the disastrous civil war and to form a stable central government or regional polities, with the exception of Puntland. Therefore, Somaliland developed growing security cooperation with Ethiopia which is mutually beneficial for both party’s development. While Somaliland benefitted from Ethiopian technical security support for training security personnel, intelligence sharing and overall support of its good offices, Somaliland represented a reliable safe border and friendly society for Ethiopia, acting in many ways as its buffer zone against destabilizing forces[23]. Furthermore, the small but growing transit trade has continued so far without any security breaches or hindrances, establishing a healthy track record for a more robust unfettered inter-country trade.

Similarly the security of the Horn of Africa coastal maritime lanes is critical, not only for world trade but as a lifeline for Ethiopia.[24] In this regard Somaliland has also established itself as an important player to keep its coastline free from piracy. Although Somaliland is in political and development limbo which perpetuates grinding poverty and rampant youth unemployment; its people have shunned the temptation to copy its compatriots by turning to piracy.

Therefore, for the Berbera Agreement relationship to translate into an in-depth economic interaction of the two peoples, Somaliland still needs to raise its security institutional capacities and to align its other relevant bodies to build a coherent systems of security cooperation with Ethiopia. This is to facilitate trust for both sides to overcome the tradition of hard borders and to move towards softer more trade friendly cross-border engagement between the two countries. This relationship should also foster the goal of regional economic integration, to harness the abundant natural resources of the Horn of Africa region and to turn its diverse national cultures and geographic endowment into leveraging their way into the global competition to benefit from the prevailing phenomenal potential for wealth creation.

Cross-border Trade

According to recent studies on the Horn of Africa borders’ informal trade, evidence shows that economic integration should not be a by-product of adequate formal security; rather “that success and versatility of informal trade networks reveal an alternative path to future regional economic integration and demonstrate that cross-border linkages do not have to be mediated by formal institutions.”[25] So far in both the Horn of Africa region and specifically at the Ethiopia-Somaliland border, security concerns remain to undermine the growth of mutually beneficial economic interaction. The study advocates for less of the state security driven approaches and urges harnessing of the existing community centred cross-border trade interactions as vehicles for sustainable business friendly security.[26]

An important factor to be kept in mind here is that the communities straddling the Somaliland-Ethiopian border are an extension of the same communities who also populate Somaliland. This will lead us to the conclusion that the peace and stability prevailing along the border since 1990 is also an extension of the same security conditions prevailing in Somaliland. The same social norms and security systems that sustain peace and stability in Somaliland are shared by these communities straddling the border, whether they are citizens of Ethiopia or Somaliland. Therefore, the securitized border culture which is still lingering along the shared border needs to transform towards the promotion of stronger trade and economic interaction beneficial to both states as well as to the communities along the border. This shall be anchored on the understanding that better security can come with people’s wellbeing and their satisfaction to have a living worth protecting.

Further in the report (page 44) the author addresses how current Somaliland and Ethiopian bilateral trade cooperation can be suitably transformed into a more formal economic integration, albeit Somaliland’s lack of international recognition and how the Berbera Port represents great opportunity for Somaliland to benefit from such economic integration. The identified common goods ideal for integration in the Horn of Africa region are also relevant for Somaliland and Ethiopian trade: transport systems, responses to the complex emergencies like droughts, locust infestation and periodic cyclone effects; sharing regional wealth of knowledge and governance best practices.

However, the report warns against integration being perceived as a solution in itself to mitigate regional conflicts, and that on the contrary it can in fact be source of conflict if “there is lack of transparency and accountability in the negotiations of the agreement and its subsequent implementation”[27]. And that brings us to the urgent need from the Somaliland side for serious due diligence in the Berbera Tripartite Agreement and other venues of trade cooperation that it opens for all parties.

  1. Conclusion

 

While the intention of this paper is to highlight the economic value that the Berbera International Investment Deal can have for Somaliland and its partners, it is public knowledge that the transparency deficiency in the deal-making process created suspicion and opposition to it, which in the public perception overshadowed its economic value. A first step towards addressing its transparency gaps is to do a due diligence exercise on the Agreement, especially from the Somaliland side. Furthermore, some of the issues that beg for clarification are the ways in which each of the three partners are going to exercise their share-rights in practice. And how would the breathtaking developments in the region can dovetail with the terms of the Agreement. For example, though the new developments in Ethiopia and its intense drive to acquire access to all possible ports in the region are good overdue progress for the state and the Horn of Region, the question remains of how that affects the Berbera Deal commitments, specifically regarding the at least thirty percent volume guarantee of Ethiopia’s transit trade business to be handled in Berbera.

The value of the Berbera Deal for Somaliland is more weighted in its potential benefits than what can be taken from it in the immediate situation. Both Ethiopia and Somaliland have the opportunity to change the present status quo characterized by separation through securitised hard borders which undermined existing possibilities for wealth creation, not only for the frontier communities, but also for the larger population of the two societies; this will require overcoming a centuries long culture of mutual impoverishment. Similarly, it is a great opportunity for the third partner and the major stakeholder of the Berbera Deal, the UAE/DP World, to have eager partner societies, and geostrategic resources and markets ready for investment. Of no less importance are the added values from their geographic proximity and their deep-rooted cultural affinity with the Arabian Gulf societies.

To make the Tripartite Berbera Agreement work, all parties need to unfetter flow of investment resources between the partner countries: first to develop joint institutions[28] which are mandated to advance the full cooperation of the three partners on the Berbera Agreement’s aims and objectives; secondly to reform existing practices toward each other, starting with Preferential Trade Agreements  (PTAs) and facilitate business friendly systems of visa rules, registration and licensing of businesses firms and joint-venture initiatives; thirdly to build robust security cooperation which swiftly addresses anything which is “bad for business” and stability.

Such institutions can facilitate further the initiatives towards the economic integration of the Horn of Africa region. Similarly, it is critical to connect to other economic initiatives that can have influence on the Agreement such as the Saudi Vision 2030, the Djibouti Free Zone project and above all the China Silk Road global project, to which the Somaliland coast falls directly in the path of its maritime wing. The Berbera Agreement contributes for the Horn of Africa region’s ability to ride the current climate of optimism for Africa’s economic development prospects.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Sarah Townsend Nov 6, 2017, “DP World Says to Build Economic Free Zone in Somaliland”, The National.

Sultan Ahmed Bin Sulayem,  Group Chairman and CEO, DP World.

Tedros Adhenom 23 Oct. 2015, “Ethiopia’s Foreign Policy: Regional Integration and International Priorities”,  African Programme Meeting, Chatham House.

Wavescan, May 1, 2011 “Five in a Row: The Forgotten BBC East Africa Relay Station, Berbera in Somalia.”

 

[1]Berhanu Fikade May 22, 29018,  The Horn Diplomat. http://www.horndiplomat.com/2018/05/22/somalilandberbera-port-expansion-project-to-commence-in-september/ Accessed July 10, 2018[2]Temesgen Yihunie, March 17, 2018, “Berbera Port: Widening Access to Ethiopia’s Growing Import-Export”, Ethiopian Herald. http://www.ethpress.gov.et/herald/index.php/news/national-news/item/11238-berbera-port-widening-access-to-ethiopia-s-growing-import-export. Accessed July 21, 2018.[3]. Sarah Townsend Nov 6, 2017, “DP World Says to Build Economic Free Zone in Somaliland”, The National. https://www.thenational.ae/business/dp-world-says-to-build-economic-free-zone-in-somaliland-1.673522. Accessed 18 May, 2018.[4]Wavescan, May 1, 2011,  “Five in a Row: The Forgotten BBC East Africa Relay Station, Berbera in Somalia.” “When the era of wireless communication began, a wireless station was co-sited with the cable station at Berbera and it was on the air with spark wireless transmissions in Morse Code under the rather logical callsign BER. This station was inaugurated before the Great War on January 1, 1912.” http://www.ontheshortwaves.com/Wavescan/wavescan110501.html. Accessed on July 9, 2018.

 

[5]Adventurous illicit immigration system[6]ILO 2012 “Labour Force Survey Somaliland Report on Borama, Hargeisa and Burao”,  In Somaliland Economic Conference: Growth and Employment, The World Bank, January 2014.[7]Who never misses his prey.[8]James Jeffrey 16 June 2015, “Khat in Somaliland: economic cure or curse?” Africa Business. http://africanbusinessmagazine.com/sectors/agriculture/khat-in-somaliland-economic-cure-or-curse/. Accessed May 9, 2018.[9] P. Hansen 2010; based on his observations and interviews he estimates around 7500 people are engaged in the transport of Khat from Ethiopia to Somaliland.” In“The ambiguity of Khat in Somaliland”; Journal of Ethnopharmacology 132. Danish Institute for International Studies …, pp. 590-599.

https://www.sciencedirect.com/journal/journal-of-ethnopharmacology/vol/132/issue/3. Accessed May 9, 2018

[10] Ibid. Hansen (2010).[11]“Khat is the number-one employer in Hargeisa, generating between 8,000 and 10,000 jobs,” says Weli Daud at the Somaliland Ministry of Finance. J.  Jeffrey June ,2015, African Business.

 

[12] Unrepresented Nations & People’s Organisation ( UNPO), Somaliland: President Silanyo On Official Visit to France,  Jan 20, 2014, http://unpo.org/article/16766. Accessed May 23, 2018[13]That the project was twinned with a UAE military base in Berbera is beyond the scope of this article, which focuses on investment and economics aspect of the UAE – Somaliland venture.[14]Meester, Jos et al, April, 2108,  “Riyal Politik: The political Economy of Gulf Investments in the Horn of Africa”,  CRU Report, Clingendael, Netherlands Institute of International Relations. https://www.clingendael.org/publication/political-economy-gulf-investments-horn-africa. Accessed May 25, 2018. P.25[15] Ibid. Page 26.[16] “Ethiopia has eyed the development of and access to the port of Berbera …but also because of a paucity of critical resources and human capital”. Cannon, J. ; Rossiter A., Dec. 2017, “Ethiopia, Berbera Port and the Shifting Balance of Power in the Horn of Africa”, Rising Powers Quarterly, pp. 7-29. http://risingpowersproject.com/quarterly/ethiopia-berbera-port-shifting-balance-power-horn-africa/. Accessed May 25, 20[17]Ibid. Page 11.[18]Calculating 20-foot container of Ethiopian garment exports to Germany, the logistics costs came to 247% higher than those of Vietnam and 72% higher than Bangladesh.John Burgoyne30 Jan 2018, seeing THE BIGGER PICTURE IN CONCESSION BIDS; Ports Strategy: insight for executives.[19]Tedros Adhenom 23 Oct. 2015, “Ethiopia’s Foreign Policy: Regional Integration and International Priorities”, African Programme Meeting, Chatham House.[20]Sultan Ahmed Bin Sulayem Group Chairman and CEO, DP World. http://www.berberaseaport.net. Accessed May18,  2018.[21] Ibid.[22] Unlike the southern part of Somalia, Somaliland emerged as a stable political system with a functioning government, some disciplined and regularly paid military and police, and democratic elections. Arieff A. (2008) “De Facto Statehood? The Strange Case of Somaliland”, Yale Journal of International Affairs,  Page 68. http://yalejournal.org/wp-content/uploads/2011/01/083206arieff.pdf. Accessed May 20, 2018.[23] Kidist mulugeta July 2014, “The Role of Regional Powers in the Field of Peace and Security: The Case of Ethiopia, Freidrick Ebert Stiftung. http://library.fes.de/pdf-files/bueros/aethiopien/10879.pdf. Accessed July 5, 2018.[24]“Strategically, the coastal belt comprising Eritrea, Djibouti, Somaliland, and Somalia must become a secure coastline—one that guarantees the safety of trade from the Indian Ocean through to the Mediterranean”,  Rondos  Alexander,  “The Horn of Africa – Its Strategic Importance for Europe, the Gulf States, and Beyond”, Centre For International Relations and Sustainable Development (CIRSD).https://www.cirsd.org/en/horizons/horizons-winter-2016–issue-no-6/the-horn-of-africa—its-strategic-importance-for-europe-the-gulf-states-and-beyondAccessed June 26, 2018.[25]; Sally Healy Nov. 2011, “Hostage to Conflict, Prospects for Building Regional Economic Cooperation in the Horn of Africa”,  A Chatham House Report, Page ix. https://www.chathamhouse.org/publications/papers/view/180423. Accessed June 30, 2018.[26]“This report also argues for a less state-centric approach to regional integration that could capitalize on the strengths of cross-border relationships. Currently border communities are often in an impoverished limbo, prone to conflict; but they could make a significant contribution to regional peace and security if their commercial potential were opened up. This could be the basis for longer-term economic growth and prosperity, turning the burgeoning illicit cross-border economic activity to advantage – no longer a security liability but a regional economic asset.” Ibid Page IX.[27]Ibid Page 44.[28]Agency for Trade and Investment Facilitation between the Berbera Agreement Partners.

References

 

Arieff A. (2008) “De Facto Statehood? The Strange Case of Somaliland”, Yale Journal of International Affairs, Page 68.

Berhanu Fikade May 22, 29018, The Horn Diplomat.

Burgoyne J. 30 Jan 2018, seeing THE BIGGER PICTURE IN CONCESSION BIDS; Ports Strategy: insight for executives.

Meester, Jos et al, April, 2108, “Riyal Politik: The political Economy of Gulf Investments in the Horn of Africa”,  CRU Report, Clingendael, Netherlands Institute of International Relations.

Kidist Mulugeta July 2014, “The Role of Regional Powers in the Field of Peace and Security: The Case of Ethiopia, Freidrick Ebert Stiftung.

Hansen, P.  2010; based on his observations and interviews he estimates around 7500 people are engaged in the transport of Khat from Ethiopia to Somaliland.” In “The ambiguity of Khat in Somaliland”; Journal of Ethnopharmacology 132. Danish Institute for International Studies …, pp. 590-599.

ILO 2012 “Labour Force Survey Somaliland Report on Borama , Hargeisa and Burao”,  In Somaliland Economic Conference: Growth and Employment, The World Bank, January 2014.

Jeffrey J. 16 June 2015,  “Khat in Somaliland: economic cure or curse?” Africa Business.

Rondos A.,  “The Horn of Africa – Its Strategic Importance for Europe, the Gulf States, and Beyond”, Centre for International Relations and Sustainable Development (CIRSD).

Sally Healy Nov. 2011, “Hostage to Conflict, Prospects for Building Regional Economic Cooperation in the Horn of Africa”,  A Chatham House Report, Page ix.

Sarah Townsend Nov 6, 2017, “DP World Says to Build Economic Free Zone in Somaliland”, The National.

Sultan Ahmed Bin Sulayem,  Group Chairman and CEO, DP World.

Tedros Adhenom 23 Oct. 2015, “Ethiopia’s Foreign Policy: Regional Integration and International Priorities”,  African Programme Meeting, Chatham House.

Wavescan, May 1, 2011 “Five in a Row: The Forgotten BBC East Africa Relay Station, Berbera in Somalia.”

Dr Mohamed Osman Fadal

By dr. Mohamed Fadal

The views expressed in this article are the author’s own and do not necessarily reflect Horndiplomat editorial policy.

Horndiplomat will only consider articles sent exclusively. If you want to submit an opinion piece or an analysis please email it to Opinion@horndiplomat.com

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