OZY
Tuesday June 5, 2018
By Eric Czuleger
A disputed part of a war-torn nation is holding out promise for the Horn of Africa.
Hong Kong–based American business developer Robby Zirkelbach has set up small firms in South Sudan, Iran
and North Korea. But Somalia was too risky even for the former U.S.
Marine sniper with a stomach for adventurous investments, until he
stumbled upon the country’s north, the self-declared Republic of
Somaliland. There, he sees promise in a land shattered by war.
After
a walk through the bustling, dust-filled market at the center of the
region’s capital, Hargeisa, and a trip to the developing port city of
Berbera, Zirkelbach has decided to “dip a toe” into the developing
market. He has identified electronics as an area where his company would
like to invest, and he isn’t alone.
Prospective investors are
flocking to a part of Somalia that most of the world doesn’t recognize
as a separate entity, attracted by its strategic geography, relative
stability and mineral wealth. Such recognition is driving its next big
economic hope.
UAE-based DP World is redeveloping Berbera Port on
the Horn of Africa to accommodate modern supertankers, a development
that could open northern Somalia — or Somaliland
— to the large markets of neighboring Ethiopia and Kenya. Wassim
Haroun, CEO of Conser, a regional engineering and development firm, sees
potential in the northern Somali desert and is currently building a
road connecting Berbera and Ethiopia.And Faiza Dubbe, a partner at regional firm SomOil Company who was
born and raised in undivided Somalia and moved to Canada as a refugee in
1986, has now returned to Somaliland to invest in an oil and trading
business. She chose the separated region over southern Somalia that is
still controlled by the federal government, because Somaliland — unlike
the south — has maintained stability and held democratic elections for
years.
“Once you get over the misconception that Somaliland may be unsafe,
you open your eyes to the vast potential of this country and to what its
people can achieve,” says Haroun.
That the peace in northern
Somalia coexists with the legacy of decades of war is evident on the
streets of Hargeisa as the call to afternoon prayers during Ramadan
rings out. Men shutter their shops and bring their prayer rugs to the
mosque, walking through row after row of building blocks festooned with
barbed wire. Guards with AK47s manning checkpoints pray in the road
rather than abandoning their posts.
The Somali civil war began
with military resistance to the dictator Siad Barre in the 1980s. The
Barre government collapsed in 1991, plunging the country into a vicious
conflict. Somaliland declared its independence that year. As the crisis
worsened, Puntland, a region in central Somalia, declared autonomy in
1998, though it still remains loyal to the federal government.
But while many have written off Somalia as a failed state struggling
to rid itself of the terrorism and corruption that’s blighted its recent
history, its north is emerging as a beacon of economic hope.
Ironically, the fact that Somaliland is separated is simultaneously its
boon and its bane — though the fractures between Somalia’s three regions
mean that development in one doesn’t mean either unity or prosperity
for all.
Somaliland’s passports are recognized by only eight
countries, and it receives no bilateral foreign aid. But it’s separate
governance — whether recognized or not — from the war-torn
south means its mineral resources, strategic location and relative
security are drawing private investment and development the federal
government can’t match.
Other stumbling blocks stand in the way of
the north’s economic development. Its infrastructure was largely
destroyed during the civil war. And the region is prone to both flooding
and drought due to climate change and degradation of pastures. The
broader perceptions of conflict and instability that hover over all of
Somalia affect investor sentiments for the north too.
But to
developers like Haroun, these obstacles are opportunities for
investment, which make Somaliland look like a “blank white canvas.” And
for those familiar with the region, the security the north can offer is
something the south still isn’t close to providing. He believes “it’s
[Conser’s] job to provide our expertise to help this country leapfrog
into the next millennium.”
Though southern Somalia has had an
internationally recognized federal government since August 2012, it has
been beset by terrorist attacks. In October 2017, the
al-Qaida-affiliated Al-Shabab
group killed more than 500 people in a bombing in Somalia’s capital,
Mogadishu. According to the Corruption Perception Index (CPI), Somalia
is also the 9th most corrupt country in the world. And the deep tribal
divides unleashed by the civil war continue to tear at the country’s
society. According to the World Bank, 90 percent of the federally
controlled south’s total spending is on security, relegating
redevelopment of infrastructure, social services, education and other
municipal functions to the back burner. That’s why, says Dubbe, many
Somalis are choosing to do business in the north. “As a woman, I feel
safe [doing] business in Somaliland,” she says.
In some ways,
Zirkelbach’s journey to Hargeisa also marks a personal return. He had
witnessed conflict in Somalia while he was with the U.S. Marines. “I
wanted to just engage and see if we could do something good for the
people out here,” he says. Like Haroun, Dubbe and others, Zirkelbach is
betting on the development of a part of the country whose identity is
unresolved. But as Somalia slowly emerges from the ashes of war, this is
where hope is sprouting first.