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Development in Somaliland Despite Lack of Recognition

Somaliland Despite being home to 3.5 million people and the ancient cities of Berbera and Zeila, the nation of Somaliland technically doesn’t exist. Since declaring independence in 1991, the northernmost corner of war-torn Somalia has operated as an unrecognized state. While its neighbors in East Africa struggle with autocracy or are outright failed states, Somaliland has built decades of political stability. Now, development in Somaliland is progressing.

Somaliland held presidential elections on Nov. 13, a vote delayed two years due to a crippling drought made worse by the absence of international aid. Unlike the restricted elections held in neighboring Somalia earlier this year, Somaliland has held fully democratic elections since the early 2000s. Development in Somaliland extends to the electoral system: this year the country unveiled the world’s first-ever biometric voting system, using iris scanning technology to identify voters and avoid duplicate ballots.

Hargeisa, Somaliland’s bustling capital, is attracting small businesses from the diaspora as well as large corporations to spur development in the country. Companies including Coca-Cola and Dubai-based DP World are spurring development in Somaliland, announcing deals worth a combined $460 million to build a port in the coastal city of Berbera and a bottling plant outside the capital.

“It is clear that investors will play a critical part in the next chapter of Somaliland’s story, helping this dynamic economy to thrive and prosper and bolstering our bid for recognition,” wrote Somaliland’s Foreign Minister Dr. Saad Ali Shire in the Financial Times.

The East African country’s international status remains a significant hurdle to further economic development in Somaliland, home to a young and fast-growing population. While international partners still do not recognize Somaliland’s independence, organizations including the World Bank are investing in development projects in the country. The World Bank’s Somaliland Business Fund has provided over $20 million in grants and matching funds to private businesses, supporting development in Somaliland and its agriculture, manufacturing and renewable energy industries.

Still unrecognized and facing delays in its elections, Somaliland is by no means perfect. But its ongoing political stability and efforts to attract domestic and foreign investment are putting it on a path of steady economic development.

– Giacomo Tognini

Photo: Flickr

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Somaliland Business Fund Promises Better Future

somaliland business fund
Somaliland is an autonomous region in the north of Somalia that gained independence in 1991. Since then, it has been struggling with high unemployment rates and poverty.

The Somaliland Business Fund provides grants to private sector individuals or companies that have innovative plans for development in agriculture, livestock, fisheries, manufacturing and green energy. It is part of a bigger development plan for Somaliland called the Somalia Private Sector Development Re-engagement Project. The $29 million project is funded by the World Bank State and Peacebuilding Fund.

Since 2012, the SBF has awarded 10.5 million dollars in grants and $10 million in matching funds. Dr. Isail Ali is one recipient of SBF’s matching fund grant. He left his position as an orthopedic surgeon in Somaliland’s capital and purchased land in the countryside. It had been Dr. Ali’s dream to lead a quiet life in the country as a camel farmer.

He won a matching grant of $49,000 because of his inventive techniques for water conservation and food production. In four short years, his original herd of seven camels had transformed into the Saafi Camel Milk Dairy. Dr. Ali now employs fifteen laborers to help during the busy seasons.

Dr. Ali’s story represents the way the fund is not only encouraging entrepreneurs from the private sector to provide for themselves, but to also provide jobs for others.

Qani Abdi Alin started Dheeman Tailoring and Fashions using money from the SBF. Her business has now become an $180,000 company, exporting designs to countries across Africa and the Middle East. She employs six tailors.

“Hard work and determination are especially important for women wanting to succeed in a man’s world,” Alin says, providing an example for other budding female entrepreneurs.

The homepage of the SBF website features the slogan “Building a Better Future.” Since Somaliland broke away from Somalia, the region has been struggling. Somali military dictator, Siad Barre, did not let the region go easily and tens of thousands of people were killed during the secession process.

Somaliland is not internationally recognized as a state, despite having its own government, police force and currency.

The SBF and its promise of a better future might be what the region needs, but only time will tell.

– Julianne O’Connor

Sources: BBC News, Somaliland Business Fund, The World Bank
Photo: BBC News

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Somaliland’s First Wind Farm

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Through the U.S. Agency for International Development (USAID,) the United States government has joined the self-declared Somaliland Administration in presenting a wind energy facility project to power the Hargeisa Egal International Airport.

Officiated by Somaliland President Ahmed Mohamed Mohamoud Silanyo, a ceremony was held on June 2 at the Hargeisa Egal International Airport. Other attendees included USAID’s Acting Somalia Office Director Hodan Hassan, various representatives from the private sector and civil society and the Ministers of Civil Aviation, Environment, Information, Interior, Planning and Water.

The Somaliland Ministry of Energy and Mineral Resources has been charged with the responsibility of controlling and overseeing the new wind energy facility project, which will also be managed by the government via a public-private partnership.

The facility is set up to serve as an alternative to expensive diesel fuel by powering some of the surrounding communities as well as the airport. Golis Energy, a local engineering company supported by USAID, has been credited for constructing the major wind farm.

At over $1.25 per kilowatt, the cost of electricity in Somaliland is one of the highest rates in the world. The high energy rates in Somaliland are a result of a disorganized network of independent providers that use different grids and unreliable equipment.

The state loses nearly 40 percent of its electricity due to various technical problems that arise from the dilapidated equipment. Minister of Energy Hussein Abdi Dualeh has stated that theft and illegal connections further cause power providers to barely break even. “We need a legal framework to govern the sector — we need an electricity law.”

Dualeh believes that renewable energy needed to be considered because Somaliland has more than 340 days of sun and “some of the fastest wind in the world.” Since 2011, USAID’s Partnership for Economic Growth program has been working with officials and the private sector in Somaliland to bring renewable energy to the area.

Additionally, Somaliland officials and USAID have ensured a competitive market for the new energy services and drafted a series of necessary laws and regulations to “regulate and standardize the sector.”

Since 2010, USAID has invested almost $50 million in Somaliland for a number of sectors, including community stabilization, governance, education, health and economic growth. An additional $14 million was allocated to fund USAID’s Partnership for Economic Growth program, which has financed efforts to develop renewable energy in Somaliland, invested in the livestock and agriculture sectors, and promoted economic stability through private sector development.

The issues with Somaliland’s energy sector have had an enormous impact on private business and investment climate. A 2011 assessment carried out by USAID’s Partnership for Economic Growth showed that most business owners cited electricity rates and services as a “constraint to growth.”

For small-scale and local industries especially, the high overhead costs equate to difficulties in competing with imports, resulting in fewer products being produced in Somaliland. Citing Somaliland’s “inefficient, unreliable and prohibitively expensive power supply,” Chief of Party Suleiman Mohamed asked, “how can you expect businesses that require a reliable electricity supply to succeed?”

 — Kristy Liao

Sources: DAI, The Guardian, Somalicurrent
Photo: Construction Week Online

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Somali Piracy Is Down

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The International Maritime Bureau published a report detailing the decreasing amount of Somali piracy incidents. The report details a nearly 40% drop in maritime piracy on the coast, with only 15 incidents occurring in 2013. This is a drastic decrease from the nearly 237 in 2011. The decline has been slowly occurring since 2011.

Why has this been occurring? Many international observers point to a stronger Somali government structure, backed by the African Unions security forces. Somalia has long been plagued with severe poverty and inadequate security measures in recent years, and a growing financial security and the African Unions military efforts to quell the Al-Shabab terrorist network.

Piracy was long seen as the only option for many Somali’s, who viewed piracy as a way to gain fast money to help survive in the harsh wasteland that is Somalia. Puntland, the self-declared independent nation located in Central Somalia has been often described as a pirate paradise. The nation is not internationally recognized, but functions with it’s own government separate from the Transitional Federal Government located in Somalia’s capital of Mogadishu. Puntland is notorious for corruption, and many pirates have found a peaceful existence there with a government that more than likely condones it’s actions due to the ineffectiveness to combat it.

The United Nations recently invested millions to build a prison to contain the pirates in the city of Garowe, but international observers question whether Puntland will actively jail these offenders as corruption has run rampant throughout many of the levels of the unofficial government. Somaliland, the other unrecognized state in northern Somalia, is more stable and has taken international support to combat piracy. Many view this as the nations own bid to gain “state-like” status amongst the international community and possibly attain recognized status.

The Transitional Federal Government located in Mogadishu has not been majorly involved in the piracy problem. The region is mostly dealing with Al-Shabab, the international terrorist organization that is attempting to overthrow the government and create an Islamic government. The Ethiopian backed African Union troops have managed to attain military victories against them, but the general anti-Ethiopian feeling amongst the Somali populace is alleged to bolster Al-Shabab’s recruiting efforts. Ethiopia recently ramped up its military involvement in February of 2014, sending in 4395 more troops, bringing the total “peacekeeping forces in Somalia to 22,126.” Al-Shabab spokesman Ali Mohamud Rage took advantage of this spike in forces, and has called to action the Somali people to take up arms against the Ethiopians “to defend their country or suffer when it’s too late.

– Joseph Abay

Sources: Epoch Times, Wall Street Journal, BBC, Foreign Policy
Photo: The Sunday Times UK