Take a holiday in Somaliland: journey to the state that isn’t

Michela Wrong once wrote that you can tell a lot about an African country by the way they issue, or refuse you a visa. This remains true, but as African leaders see the benefits of liberalisation (in a variety of different guises), heralding a stream of hot money flowing in to the continent, there are many other measures of “˜doing business’ that are equally revealing. Commerce in Africa now seems inextricably linked with the mobile phone, so seeing how easy it is to get yourself up and running with a SIM card can be a good measure of a place.

In Addis Ababa I had to take a photocopy of my passport and 2 other headshots to a long queue in a small office, and several days later the stupid thing still didn’t work. I didn’t go back. In Hargeisa, capital of Somaliland, I arrived at my hotel, enquired about the SIM, whereupon the receptionist flicked a new one across the counter, expertly inserted it into my phone, and immediately topped me up with $5 worth of credit via text message. It all took 2 minutes.

Whilst Ethiopia is no economic laggard – as evidenced by the increasingly terrible traffic in the capital and ugly edge-of-town industrial expansion – it is the freewheeling capitalism in the Horn of Africa’s non-state state that really grabs the attention. Somali society has traditionally been strongly oriented towards trade and despite decades of chronic insecurity in the South, these networks remain. The Somali diaspora is well-known internationally, particularly since the civil war forced many of them out into prominent communities in Europe, North America and the Middle East. Somalia is now the second biggest importer of goods from Dubai, with wooden dhows risking pirates whilst plying trade routes across the Arabian Sea to dock at Berbera, Bosaso or Mogadishu down the Somali coast.

Positioned on the upper haunch of the Somali dog-leg the Republic of Somaliland looks initially unpromising. It is mainly dry and rocky, there are few paved roads, and the population is small and generally dispersed. Only in the capital city do you really see the potential of the place. Downtown Hargeisa is booming, and the centre of the boom is Dahabshiil – the country, and region’s major money transfer company. I met up with the CEO Abdirashid Duale who’d just flown in from Dubai. He took me to the centre of operations where I observed 2 remittance transfers being made, both over $300, one from London and the other Melbourne. Deeper in to the offices the more serious money is moved around. Stacks of dollar bills, generally preferred to the rather weak Somaliland shilling, are processed for local businessmen and international NGOs – both the United Nations Development Programme and World Food Programme have outfits in Hargeisa, and Dahabshiil is the preferred means of making financial transfers. The company’s success, whilst extremely impressive, tells you something about the limitations of the Somaliland economy – it is substantially based around bringing in wealth created externally.

Whilst the economy may be on the up, Somaliland still feels extremely isolated. An employee of a big international NGO who I met in the lobby of my hotel, The Mansoor, looked at me with astonishment when I said I’d come to Hargeisa for fun. “The biggest danger here,” he said “is dying of boredom.” This might have been typical ex-pat world weariness, but it underlined the fact that Somaliland has successfully insulated itself from the more newsworthy goings on in Southern Somalia. I’m told there are probably Al-Shabaab sleeper cells in Hargeisa, but the militant islamist group hasn’t attempted an attack since 2008 when it bombed the presidential palace, the Ethiopian consulate and UNDP offices. Security at the Ethiopian consulate is still tight, with mobile phones confiscated at the front desk. This causes a blazing row between my guide, who considered himself above such precautions, and the rather jumpy soldier at the gate.

I’m interested to know what actual problems are attached to international non-recognition as a state. The answer I get most regularly is associated with the processes of doing business – the lack of any international banks (hence the success of Dahabshiil), the difficulty of obtaining insurance – I’m pretty sure my own travel insurance would have been invalid if I’d needed it there. I didn’t bother to ask. But there seemed very little likelihood of anything actually going missing in the country. The Somaliland population seemed almost pathologically honest – money is stored in great blocks on the street and transported in sacks.

A more concrete example is provided by Africa Confidential, which recently reported that the Hong Kong oil company PetroTrans is likely to pull out of investing in the port of Berbera, having been unable to obtain insurance for the Liquified Natural Gas plant it was to build. The plant was to link up gas fields in Ethiopia’s Ogaden region with export facilities on the coast, and will now see Somaliland lose out to its tiny, but strategically important neighbour Djibouti.

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