Apr 06, 2016

Somaliland: Berbera Port Key to Economic Development

Photo Courtesy of Deutsche Welle 

Despite Somaliland’s isolation, economic ties with its neighbours continue to strengthen, and a recent trade agreement signed between the two could see the redevelopment and reinvigoration of the unrecognised state’s major port. Development of the port would release some of Somaliland’s untapped economic potential and unlock much needed resources for the government, whose limited budget hinders its ability to demonstrate efficacy and engage in nation-building.


The following is an article published by Deutsche Welle:


Since its establishment in 1991, the international community has stopped short of recognizing Somaliland as an independent state. But this quasi country continues to survive. Its isolation means little is known about it. Somaliland has 850 kilometers of unspoilt beaches. But Somaliland isn’t entirely forgotten, not regionally, hence potentially crucial ties with Ethiopia continue to strengthen.


Poverty and unemployment in Somaliland remain stubbornly high. Some locals already express concern about a steady drift toward Islamic conservatism in Hargeisa: music no longer blares out from tea-shops and more women are adopting black Muslim 'abayas' rather than colorful Somali robes. Others, however, say religious conservatism co-exists in harmony with a liberal free market society.


Somaliland officials hope that their country will benefit from their ties to neighboring Ethiopia and that some of Ethiopia's economic growth will rub off. But much investment is needed at Berbera Port before more ships can arrive. The smart asphalt road Ethiopia built to the shared border becomes less suited to heavy traffic on the Somaliland side.


Somaliland’s tenacity finds its clearest demonstration in the capital, Hargeisa. "In 1991 it had been totally destroyed. It was rubble and waste," says Saeed Mohamoud, director of Horizon Institute, a Somaliland consultancy firm helping communities move towards development and stability. "Vital life was brought back by local entrepreneurs who took local 'dhow' boats to get supplies in Dubai."


Nowadays, arrivals to the sun-blasted city of 800,000 people encounter a mish-mash of chaotic local market commerce alongside diaspora-funded construction. Amidst the market stalls, Hargeisa boasts glass-fronted office buildings, Wi-Fi enabled cafes and air-conditioned gyms, all suffused with characteristic Somali energy and dynamism.


Somaliland depends on money sent by its diaspora—more than $400 million (352 million euros) annually—and livestock sales to Arab countries generating 65 percent of national income. Its government has a tiny budget and relies on the support of local clans. It is hard for any government to prove its efficacy to international organizations, local NGOs and the private sector.


Non-statehood deprives Somaliland of direct large-scale international support from institutions like the World Bank and International Monetary Fund. For members of the Somaliland Seaman’s Union at Berbera Port’s docks, it means they are not paid the same wages—they earn about $250 (220 euros) a month—as foreign workers as they do not belong to an internationally recognized organization.


Crucial to this is Berbera, a name that conjures images of tropical quays, swarthy traders and fiery sunsets. Once an ancient nexus of maritime trade, Berbera has long been eclipsed by Djibouti’s ports to the north. Its old port now crumbles looking out onto half-sunken ships, while its modern port handles less than five percent of Ethiopia’s trade. But change is on its way.


Berbera’s modern port is now on the brink of a major expansion. Somaliland and Ethiopia signed a trade agreement March 31, 2016 on using the port. Such developments could transform and return Berbera to operating as a regional transportation hub, help develop Somaliland, while funding its nation-building ambitions.

Peace and security hold in Somaliland, so effectively that money-changers can safely stash bundles of cash on the street. But the country’s economic potential remains untapped, trapping its people in endless cycles of dependence. Patience may be running out, although locals do their best to welcome foreign visitors: "Thank you for coming," they often say. "Please tell people about our country."