Somaliland wants to be a trading hub. Here are the problems

..and the potential.

Somaliland, a semi-desert territory on the coast of the Gulf of Aden, has set its sights on becoming a regional trading hub for the Horn of Africa. Though not internationally recognised, Somaliland’s "autonomous" status has insulated it from the turmoil that has subsumed Somali for the past two decades. It has a functioning political system, government institutions, its own currency and relatively low levels of political violence.

At the heart of its economic potential is the port of Berbera, used as an import and export hub by landlocked Ethiopia. Its two airports have undergone a USD 10 million Kuwaiti funded makeover which Somaliland hopes will be the start of efforts to develop its infrastructure, creating the potential for it to augment its position as an alternative trade corridor to Djibouti for Ethiopia.

Ethiopia’s USD 43bn economy, while largely closed to the outside world, is growing by 7 per cent a year and the country is keen to develop coffee and leather manufacturing exports.

The need for enhanced infrastructure in the region is demonstrated by persistent bottlenecks at ports in Mombasa, Dar es Salaam and Djibouti. The appalling condition of the Mombasa road linking the port with the rest of Kenya and the countries of the interior exacerbates the backlog.

Ethiopia’s over reliance on one trade corridor through Djibouti leaves the country vulnerable to fluctuations in its relationship with its trade partner, thereby compromising its ability to effectively manage the political economy of trade logistics. The World Bank has encouraged Addis Ababa to develop transport routes through Somaliland to diversify its options and improve its negotiating position with transit corridors.

Infrastructure development will provide a boost to Somaliland’s fledgling natural resources sector. Sharing the similar geology to the oil rich Gulf states, Somaliland and neighbouring Puntland, offer attractive prospecting opportunities for oil & gas companies. Canadian-listed Africa Oil Corp and Anglo-Turkish oil company Genel Energy, have signed contracts with the semi-autonomous governments and are exploring in the region.

In a situation similar to the standoff between Baghdad and Kirkuk, the activities of international oil companies have sparked controversy over which authorities have the right to issue exploration licences. Following the presidential election in Somalia in 2012, Somalia authorities are reasserting their claim that the issuing of such licences falls solely within the remit of the federal government.

The Somali constitution gives considerable autonomy to regional governments to enter into commercial contracts for oil deals, while a petroleum law, not yet adopted by parliament is being invoked by federal officials in Mogadishu to claim that the central government can distribute natural resources contracts.

The seeds of this controversy dates back to the 1991 overthrow of a dictator that plunged Somalia into two decades of violent turmoil, first at the hands of clan warlords and then Islamist militants, creating a political vacuum in which two semi-autonomous regions - Puntland and Somaliland – emerged in northern Somalia.

Multinational oil companies with licences to explore Somalia prior to 1991 have since seen Somaliland and Puntland grant their own licences for the same blocks. At present the federal government is too weak to press its claim and is unlikely to remain so into the medium term. Any concerted effort to force Somaliland and Puntland to rescind contracts has the potential to provoke violent clashes between armed groups and the security forces in the territories.

Activity by a range of investors in infrastructure development and oil & gas exploration is indicative of the potential to be unlocked in even the most challenging territories. With appropriate insurance coverages providing balance sheet protection against the challenges posed by unpredictable government action and the threat of political violence, opportunities abound for the intrepid investor.

Photograph: Getty Images

JLT Head of Credit & Political Risk Advisory

Getty
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The economics of outrage: Why you haven't seen the end of Katie Hopkins

Her distasteful tweet may have cost her a job at LBC, but this isn't the last we've seen of Britain's biggest troll. 

Another atrocity, other surge of grief and fear, and there like clockwork was the UK’s biggest troll. Hours after the explosion at the Manchester Arena that killed 22 mostly young and female concert goers, Katie Hopkins weighed in with a very on-brand tweet calling for a “final solution” to the complex issue of terrorism.

She quickly deleted it, replacing the offending phrase with the words “true solution”, but did not tone down the essentially fascist message. Few thought it had been an innocent mistake on the part of someone unaware of the historical connotations of those two words.  And no matter how many urged their fellow web users not to give Hopkins the attention she craved, it still sparked angry tweets, condemnatory news articles and even reports to the police.

Hopkins has lost her presenting job at LBC radio, but she is yet to lose her column at Mail Online, and it’s quite likely she won’t.

Mail Online and its print counterpart The Daily Mail have regularly shown they are prepared to go down the deliberately divisive path Hopkins was signposting. But even if the site's managing editor Martin Clarke was secretly a liberal sandal-wearer, there are also very good economic reasons for Mail Online to stick with her. The extreme and outrageous is great at gaining attention, and attention is what makes money for Mail Online.

It is ironic that Hopkins’s career was initially helped by TV’s attempts to provide balance. Producers could rely on her to provide a counterweight to even the most committed and rational bleeding-heart liberal.

As Patrick Smith, a former media specialist who is currently a senior reporter at BuzzFeed News points out: “It’s very difficult for producers who are legally bound to be balanced, they will sometimes literally have lawyers in the room.”

“That in a way is why some people who are skirting very close or beyond the bounds of taste and decency get on air.”

But while TV may have made Hopkins, it is online where her extreme views perform best.  As digital publishers have learned, the best way to get the shares, clicks and page views that make them money is to provoke an emotional response. And there are few things as good at provoking an emotional response as extreme and outrageous political views.

And in many ways it doesn’t matter whether that response is negative or positive. Those who complain about what Hopkins says are also the ones who draw attention to it – many will read what she writes in order to know exactly why they should hate her.

Of course using outrageous views as a sales tactic is not confined to the web – The Daily Mail prints columns by Sarah Vine for a reason - but the risks of pushing the boundaries of taste and decency are greater in a linear, analogue world. Cancelling a newspaper subscription or changing radio station is a simpler and often longer-lasting act than pledging to never click on a tempting link on Twitter or Facebook. LBC may have had far more to lose from sticking with Hopkins than Mail Online does, and much less to gain. Someone prepared to say what Hopkins says will not be out of work for long. 

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