Sunday, September 20, 2015

Somalia’s Strategic Depth and Investment Opportunities for GCC Countries

By Bashir Goth

It is almost a quarter of a century since Somalia lost its statehood and status as a relevant member of the international community. Since then Somalia’s name has become synonymous with a failed state and the word Somalization the 21st century’s new term for Balkanization. Tribal civil wars stoked by local and international terrorism and human-made famines have devastated the country, causing one of the 21st century’s biggest refugee crisis in Africa. The Dadaab, the world’s largest refugee camp, has become a symbol of the misery and misfortune of the Somali nation. Tens of thousands of other Somalis were also sheltered in other neighboring countries such as Ethiopia, Djibouti, and Yemen; while around 1.1 million internally displaced people live under sub-human conditions in squalid make shift camps inside the country. 

This was the story of Somalia over two decades but not anymore. There is a new story coming out of Somalia these days; a story of a promising future, a story of a country that could be the 21st century’s Rotterdam, Singapore, and Dubai all together; a country that is destined to redraw the map of world trade and tourism business. If one asks where this change comes from? The answer is simple: piracy windfall.  

Throughout its long years of self-destruction and suffering, the world neglected Somalia. Even when foreign booty hunters robbed its fish stock in tons in an unprecedented illegal fishing and others dumped hazardous industrial waste in its waters; the world looked the other way. World powers lacked the foresight to envision the danger that stateless Somalia could pose to world peace and economy. Not until the genie of piracy was out of Somalia’s unguarded and crime infested coast.

After a few years of the piracy activity, the world suddenly woke up to the vital strategic location of Somalia to global trade when pirates paralyzed the shipping lanes of one of the world’s busiest marine trade routes and their reach stretched to 1000 miles from Somalia’s coast. 

According to a study carried out by One Earth Future (OEF) Foundation the total cost of piracy off the coast of Somalia stood at US$7–US$12 billion at its peak in 2010. 

“While over 80 per cent of these costs were estimated to be borne by the shipping industry, 20 per cent were estimated to be borne by governments,” the study said.

A World Bank report in 2013 exposed a more serious situation by concluding that the yearly cost of piracy to world economy was in the tune of US$18 billion. This was a global economic menace that demanded an urgent action. But although navy warships of several industrial nations were deployed to the Somali coast, it soon became clear that fighting Somali piracy required not only military might, but also fixing a broken country for the interest of global trade.

This came in the revealing title of the World Bank report: “The Pirates of Somalia: Ending the Threat, Rebuilding a Nation.” 

The report went further to call for action, emphasizing that “The costs imposed by Somali pirates on the global economy are so high that international mobilization to eradicate piracy off the Horn of Africa not only has global security benefits, it also makes ample economic sense.” 

Therefore, it is only when Somalia’s lawlessness played havoc to world economy that the world decided to act. In September 2012, Hassan Sheikh Mahmoud was elected as Somalia’s President in an internationally sponsored conference of clan appointed parliament in Mogadishu. 

The importance of this was not lost on the western media as the Time magazine included Hassan in its 100 most influential people in 2013. Shedding the spot light on the significance of the event, Ruwandan President Paul Kagame who wrote the new leader’s profile for the magazine said: “The leader of Somalia’s first constitutional government in 20 years, President Mohamud symbolizes an increasingly confident Africa that is shedding its long history of strife and moving toward greater stability and prosperity.”

The first leader to break the undeclared international diplomatic ban on Somalia was Recep Tayyip Erdogan who became the first foreign leader outside Africa to land in Mogadishu more than 20 years. Somalia was at the time suffering from one of its worst famines in 60 years amid the country’s worst security situation where the militant Al Shabab had large parts of the country under its grip. Arriving in Mogadishu in August 2011 with his wife and a large delegation of Turkish officials on his side, Erdogan toured the bullet riddled streets of war-torn Mogadishu and announced that Turkey was opening an embassy in Somalia.

Since then Turkey launched huge development projects in Mogadishu. And Erdogan returned to Somalia as a President in January 2015 and was welcomed by his Somali counterpart at the new Turkish-renovated airport.
Irked by Turkey’s ventures in Somalia and with piracy being at its height, the UK government called for an international donor conference on Somalia in London in May 2013. The UK and other donors pledged some $130m (£84m) in aid for Somalia. 

The US also recognized the Somali new government for the first times in 20 years when President Barack Obama met President Mahmoud at the White House and later Secretary of State Hillary Clinton announced the United States’ recognition of the Somali government since the American Black Hawk battle in Mogadishu in 1994.

Today, Somalia has come a long way, Al Shabab has almost been defeated as a military force and nearly all areas under their control have been liberated. And with piracy losing its onshore support and its fleet and manpower destroyed by world navies offshore, it succumbed to its death.

This was celebrated by US Secretary of State John Kerry in his first visit to the Somali capital, recently as the first American Secretary of State to visit Mogadishu. 

"I visited Somalia today because your country is turning around", he said at a meeting with the Somali President,  adding there was "determined international effort" to put virtually all of Somalia's pirates out of business.

The Arab Gulf countries whose trade interest was harmed by Somali piracy as an estimated 7% of the world's oil consumption passed through the Gulf of Aden had also become active in engaging with Somali leaders to find a solution on the ground. The UAE initiated a yearly anti-piracy conference with the aim of re-establishing Somali security institutions as its core purpose. 

The war in Yemen again re-awakened the Gulf Arabs to Somalia’s strategic importance which prompted Qatar and UAE Foreign Ministers to visit Mogadishu and hold talks with Somali leaders. 

One can therefore conclude that apart from its untapped mineral resources and it’s underused arable land that if properly invested can easily be a bread basket for GCC countries, Somalia can provide a badly needed strategic depth to the GCC States due to its long coast which is the second busiest international trade route with approximately 23,000 ships amounting to nearly one trillion dollars of trade transiting its waters.

Developing Somalia’s coast line for tourism, fishing, and prime real estate as well as building modern ports and exploiting the country’s ready atmosphere for renewable energy can also change the Horn of African country into a summer resort, a successful investment venture, and a gateway for GCC business to Africa’s growing consumer market. Turkey has already taken the lead and China is waiting on the flanks with its ready cash but only time will tell if the GCC countries with their proximity, their open markets, and their historical relations with this Arab League member and Horn of African country can score better results in the scramble for Somalia’s lucrative trade and strategic geopolitical position.