DP World “Development” Projects: A Bum Deal for Somaliland BY Jaafar M Sh Jama
In the past ten years, the United Arab Emirates multinational corporation DP World, together with some Indian and Chinese firms has been taking unfair advantage of less developed nations. They tend to focus on conflict prone neighborhoods that are disorganized and unable to compete or negotiate on equal terms. Their exploits have included grabbing land and ports in the Horn of Africa in search of energy, food, and cheap labor resources.
Somaliland has plunged into one of these mendacious schemes for several reasons. Desperate for investment, it is hoping the plan would spur economic and infrastructure development in order to create a wider market in the region. DP World wants to take control of, and use the port for its own economic development and geopolitical agenda. The military base concession is part of the ongoing ideological battle between two sects of Islam, Shia and Sunni. The agreement protects the Sunni powerhouses among the Gulf Countries and Saudi Arabia from Iranian ideological incursions. Internationally unrecognized Somaliland has given its support to the Sunni side. The base is something they can offer to battle the Houthis of Yemen; and to help restore a Sunni government among those driven to Southern Yemen. The purpose of these actions is to prevent regional instability that could threaten the wealth of the Saudis and other Gulf courtiers.
DP World, an economic arm of the United Arab Emirates has taken over the port of Berbera to serve this purpose and establish a broader commercial monopoly in the Horn of Africa. The long term goal is to scoop up resources in Ethiopia and sub-Saharan Africa for the benefit of its hungry markets; remove the East African regional economic bloc by exploiting its resources and keeping the coastal area for itself; and to be a vital competitor with other multinational corporations already vying for the economic resources of the region.
The agreement with Somaliland and the DP World is rife with controversy. The Somaliland administration contends that the memorandum of understanding presented to the House of Representatives for approval is not the whole agreement. The memorandum of understanding was approved by the legislatures after bitter debate. The session ended with the arrest of several legislators by presidential guards after one of the units that guard the House of Representatives refused to intervene. Forty four legislators out of the one hundred and sixty-four members of the House of Representatives and the House of Elders acquiesced to vote in favor of the base and to the handing over of commercial activities of the port to DP World. Speaker of the House of Representatives and head of the opposition party of Wadding (Nationalist) Abdiraxman Maxamed Cabdillahi (Cirro) calls the memorandum of understanding null and void without
official agreement. Neither house has approved the agreement between Somaliland and United Arab Emirates in accordance with the Somaliland constitution.
It is speculated that Somaliland officials involved in the agreement are reluctant to bring the agreement to parliament and public scrutiny. Somaliland is an unrecognized country and is not in a position to act as a sovereign state. Instead, Somaliland officials have been using the legitimate Somali government in Mogadishu’s sovereignty stamp—with the tacit support of the United Arab Emirates—to lease the military base to United Arab Emirates. The exposure of the agreement will lead to public embarrassment and undermine the image projecting Somaliland as a sovereign state with no ties to Mogadishu. The agreement lacks public transparency. The legal status of the agreement is in question in Somaliland, Somalia and abroad. Hastily pushing a fifteen point memorandum of understanding through parliament without the full agreement is a telling sign.
The deal to establish a military base alongside a commercial venture controlled by DP World is being pushed by the Chief of the Presidential Palace, Maxamuud Xaashi, Baashe Cawil Xaji Cumar, the head of the Somaliland Mission in Dubai; and Minister of Foreign Affairs and Investment Sacad Cali Shire. DP World plans to invest $442 million to build multiple piers with container and storage areas. Sixty five percent of this massive project will be paid by DP World. Somaliland would have to come up with the remaining amount during the twenty-five year life span of the agreement. Initially, the plan was all about trade and opening up markets to Ethiopia. In practice, the United Arab Emirates is more involved in the business of land grabbing along with the Chinese and Indian private investors, and local individuals who receive a cut once they push these kinds of deals in their countries without specifying what their respective countries would get out of such deals.
A study by Somaliland experts on the economic, social, political, security and environmental impact of the agreement was not made public. The domestic ramifications, including depletion of ground water and loss of economic autonomy are real. The military base is not going to lead to and significant local development. Poverty will remain an issue, as well as the danger of being drawn into a regional proxy war between the Saudi’s and Iranians. Because the agreement establishes a free trade zone and a military base, local government is unable to levy tariffs and collect taxes. The infrastructure plan by implemented by DP World serves its own interests and markets. DP will gradually take over the livestock market in the interior. Livestock holding pens (Maxraj) run by wealthy Saudi and Emirati merchants are already in place. Somaliland is not protecting its traders, laborers, dock workers, or the interests of its citizens through agreeing to such deals. State mechanisms have become an effective way of selfishly serving individual interests.
The base and commercial free port construction projects are means of accessing local resources and energy supplies; and protecting the interests of wealthy Arab nations. Neither is concerned about the development of Somaliland and Somalia. Global political and economic relationships
are complex. Somaliland must withdraw from free port leases, withdraw from free zone deals, and reject these as models for development. DP World is simply linking its production and consumption to the rest of Africa—expanding its own commercial network, which is not in the best interests of Somaliland.