Tobin Jones
World News /19 Apr 2018
04.19.18

What the Gulf Crisis Means for Somalia

After the collapse of Somalia in the early 1990s, the UAE, like other GCC countries, attracted Somali businesses and trade. Most of the influential business people and political leaders lived in the UAE, Saudi Arabia and Qatar. The UAE’s geopolitical interests in Somalia begun to take shape becoming a foreign policy priority in the wake of the 9/11 attacks where it began to establish links with both formal and informal actors in the pretext of countering the threat of piracy and terrorism.

The UAE became a main base for exporting items to Somalia. Importing livestock and leather from Mogadishu to UAE has been practiced even before the oil boom. The geographical proximity of the two countries has played a significant role in boosting bilateral trade. Though, there are no reliable statistics available on the number of Somalis who live in Dubai or the UAE at-large, it is a common knowledge that Somalis prefer to live and run their business in the emirates as they consider Dubai the gateway.

According to some estimates carried out in the recent years, the number of Somalis living in the UAE ranges between 30,000 and 35,000 of which 70 percent run their own businesses including import and export between Dubai and Mogadishu, including gold, clothes, textiles and several trade commodities. These businesses contribute to some extent to the GDPs of these countries with the UAE having an upper hand.

Somali businesses have become over-reliant on banks in Dubai which they use to facilitate and process billions of remittances from diaspora communities to Somali families living inside and outside the country.

In the recent years, UAE firms have increased their presence in the Horn of Africa especially in an effort to secure Somali ports. Dubai based firms have begun engaging Somali regional leaders in the management of the ports of Berbera, Bossaso and Mogadishu in a move by the UAE to establish maritime ports around the Red Sea. In light of this, the UAE signed and agreed to multi-million-dollar port investment deals with the self-declared Republic of Somaliland. Somaliland also agreed to the 25-year lease of a military base in Berbera to the UAE in return for infrastructure development and job creation. These investments did not go well with the Somali government and the public views it as a move that greatly destabilizes the government’s national reconciliation efforts in unifying the semi-balkanized nation.

The UAE seems not convinced by Somalia’s neutral position and is seen to be making asymmetrically aggressive moves against Somalia in a bid to pressure and enforce its policies on the seemingly weak Somali central government.

The recent seizure of nearly $10 million ‘cash cargo’ by Somali security forces from a plane arriving from the UAE has created a diplomatic headache. Though UAE authorities in a bid to save face with their Somali counterparts have tried to justify their intents on the controversial cash, stated that the money was destined to pay the Somali military while widely condemning the actions taken by the Somali security officials in seizing the cash. This did not resonate with the Somali government which responded by disbanding the three-year long UAE program to train the Somali military and fully shoulder monthly wages.

These prevailing gestures portrayed by the two traditional allies is a recipe for diplomatic tension that could greatly affect the ‘cool’ trade and business atmospheres enjoyed by the citizens and firms of both Somalia and the UAE.

The acrimony, if allowed to persist, will certainly impact the trade relations between the nations significantly. In this regard, it is of the interest of both countries to de-escalate the ballooning tensions to which a possible diplomatic fallout will be imminent followed by long unintended geopolitical consequences that would undermine the geostrategic interests of both countries.

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