In May 2016, DP World, the Dubai-based maritime trade conglomerate, signed a USD 442 million agreement with the government of Somaliland to construct a regional trade port at Berbera, on the Gulf of Aden. To the north, oil has traditionally been the critical factor in determining the Middle East’s geopolitical hierarchy. But in the Horn of Africa, water is steadily becoming the region’s most prized resource. The debate surrounding the Berbera Port deal demonstrates the importance of maritime trading capability in determining the region’s balance of power.
Although it is not formally recognized internationally, Somaliland has functioned as an autonomous state since it declared independence from Somalia in 1991. The Federal Government of Somalia, which claims sovereignty over Somaliland and thus, considers the port deal illegal, banned DP World (which holds a 50% stake in the project) from operating within its territories in March 2018. But the government in Mogadishu is weak and lacks the capacity to enforce this ruling in Somaliland. As such, the port’s construction is likely to begin soon, much to the chagrin of not only Somalia but, also Djibouti, which has until now provided exclusive access to maritime trade for regional hegemon Ethiopia.
The Berbera Port deal has obvious strategic significance for Somaliland. While its neighbours include repressive authoritarian states Ethiopia, Eritrea and Djibouti, along with war-torn Somalia, Somaliland is considered a “Partly-Free” democracy by the international think-tank Freedom House. It has also enjoyed relative political stability for approximately a quarter of a century, but the republic’s lack of international recognition has made it difficult to attract foreign aid or investment. The existing port is already a huge source of employment and revenue, however, increasing its capacity could transform the port into a regional maritime trading hub. With a 30% stake in the project, the Somaliland government stands to welcome a potential economic boon, while also securing its status as an independent nation-state.
The government of Somaliland hopes that the development of the port will be accompanied by wider investments in Somaliland’s fishing, transport and hospitality industries. Moreover, it is flexing its emerging diplomatic muscle to foster closer security ties with the Gulf states. The UAE is to establish a new naval base in Berbera, which will enable it to reduce the volume of weapons being smuggled from Iran into Yemen. In addition, following a visit to Abu Dhabi by Somaliland President Muse Bihi Abdi in April, the UAE announced that it would subsequently allow visa applications from citizens of the “Republic of Somaliland” instead of just Somalia. Regional recognition of Somaliland as an independent nation is the first step towards legitimate sovereign status on the international stage. It is thus, unsurprising that, across the border in Somalia, the Mogadishu-based government has vociferously opposed the deal. With every ancillary deal that is announced, Somalia’s claim to dominion over Somaliland weakens. The government in Mogadishu already lacks country-wide authority, and it fears that a prosperous Somaliland will incentivize other regions, such as Puntland in the north, to secede from the Federal Republic.
From a geopolitical perspective, the development of the Berbera Port also plays a key role in neighbouring Ethiopia’s pursuit of regional dominance. Since becoming a landlocked country following Eritrean independence in 1993, Ethiopia has relied on access to ports in Djibouti for approximately 95% of its imports and exports. More recently, though, Ethiopia has boasted stellar annual GDP growth rates (driven largely by consistent annual increases in the volume of export cargo). As such, it has sought to expand its potential trading ports beyond its established base in Djibouti, probing its neighbours Sudan and Kenya, both of which have large coastlines, for access to their ports. The Berbera Port however, is the best-placed strategically. It sits on the southern edge of the Gulf of Aden, which has been a centre of trade between the Horn of Africa and Arabian Peninsula for centuries. To the northwest, it also the gateway to the Red Sea and the Suez Canal, one of the world’s busiest shipping lanes. An upgraded port in Berbera would allow Somaliland to challenge Djibouti’s relative monopoly over regional maritime trade, while the Berbera corridor would allow Ethiopia to export livestock and agricultural products to key markets in the Middle East more efficiently.
Accordingly, on 1 March this year, Ethiopia announced that it had acquired a 19% stake in the project. Ethiopia, which is also a signatory to the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor deal (which entails the construction of an oil and transport corridor linking it with Kenya and South Sudan), has committed to constructing the “Berbera Corridor”, a USD 300 million network linking the port to Addis Ababa. As well as being desired by the Ethiopian government, enhanced access to an Ethiopia market of over 100 million people is a potentially lucrative prize for the government of Somaliland.
However, Ethiopia’s interest in cultivating a closer economic relationship with Somaliland has an accompanying security objective. By fostering diplomatic ties with Somaliland, the Ethiopian government aims to isolate Eritrea, weakening its state capacity to the point that it either becomes a dependent client state or collapses and reunites with Ethiopia. To the East, encouraging Somaliland to embrace its statehood ensures that Somalia remains divided and weak, thereby removing the threat of a potential regional challenger. While enabling Somaliland to sign substantive deals with foreign states and secure its own international recognition, the deal is therefore designed to secure Ethiopia’s security and economic interests.
In the short term, Somaliland is likely to attempt to increase its political distance from Mogadishu, in doing so removing any pretence that affairs in its capital Hargeisa are controlled by a foreign power. However, while utilizing its emboldened status to pursue trading relations with other states in the region, the government of Somaliland may find that Ethiopia comes to wield greater political influence over supposedly sovereign affairs than it cares to admit. In the long-term, Somaliland may be hamstrung by so closely aligning its strategic objectives with those of Ethiopia. As such, it may achieve its much-desired lasting independence from Somalia, only to find itself economically dependent on Ethiopia, the Horn of Africa’s dominant geopolitical power.