P146 – Economics of Statelessness: Business and State Formation in the Somali Territories
8 July, 14:00 – 15:30

Hagmann Tobias / Roskilde University
Little Peter D. / Emory University


This panel sheds light on the nexus between everyday economic activities and state formation in the Somali territories. We invite papers that analyze how traders, entrepreneurs and investors have navigated the opportunities and challenges of limited statehood in Somalia, neighboring Kenya, Ethiopia and Djibouti. Despite insecurity and conflict, local and transnational trade and investment have boomed in Somali East Africa. As a result new market places emerged, real estate prices exploded, economic integration with Arab Gulf States and the global Somali diaspora intensified, and the flow of capital, goods and livestock accelerated.
Rather than assuming a distinction between economy and state, commercial life in the Somali territories is both shaped by and shapes local politics, state-building and sovereignty. Somali business may thus circumvent, transform or contribute to stately tasks such as security, taxation, resource control, or regulation. It is this interaction between daily economic practices and state effects that have evolved in particular times and places within the greater Somali economy that this panel seeks to explore.

Économie d’apatridie: commerce et formation de l’État dans les territoires somaliens
Ce panel met en lumière le lien entre les activités économiques quotidiennes et formation de l’État dans les territoires somaliens. Malgré l’insécurité et les conflits, le commerce local et transnational et les investissements ont explosé en Somalie. En conséquence, les nouvelles places de marché ont émergé, les prix de l’immobilier ont explosé, l’intégration économique avec les États du Golfe arabe et la diaspora somalienne mondiaux intensifiée, et les flux de capitaux, des biens et du bétail accélérés.

Plutôt que de supposer une distinction entre l’économie et l’État, la vie commerciale dans les territoires somaliens est à la fois façonnée par la politique locale, le renforcement de l’État et de la souveraineté. Les affairistes somaliens peuvent ainsi contourner, transformer ou contribuer dans des domaines tels que la sécurité, la fiscalité, le contrôle des ressources, les lois. Cette interaction entre les pratiques économiques quotidiennes et les effets de l’Etat qui ont évolué dans le temps et des lieux particuliers au sein de l’économie somalienne plus que ce groupe cherche à explorer.


Paper 1

Lochery Emma / University of Oxford

Generating power: providing for the public in Somaliland

This paper looks at the interaction between private companies and government institutions in delivering ‘public’ services in Somaliland. Recent studies on governance in areas of limited statehood have emphasized functional aspects of statehood and suggest it is less important who is delivering a service, as long as it is delivered. Meanwhile, a school of thought argues that delivery of services by the state is central to state legitimacy. I emphasize that framing actions as in the collective interest is a strategy not just used by those aspiring to build a state but one deployed to justify and protect private business. My paper investigates what happens when private businesses claim to provide for the public, why they do so, and what consequences this has for processes of state-building and market-making. I focus on the electricity sector in Somaliland from 1991-2014. I elucidate how private power providers claimed to act in the public interest and the way they mobilized this claim to protect their interests in the face of government entry into the market as well as foreign development interventions aimed at strengthening state regulatory capacity. Business actors not only contributed to fulfilling ‘stately tasks’ but shaped ideas about which tasks should be carried out by the state. I argue for more analysis of how businesspeople express their public contributions and responsibilities and the implications this has for ongoing trajectories of state formation.

Paper 2

Rasmussen Jacob / Roskilde University

Sweet deals and risky business: transporting sugar in Somali-Kenyan borderlands

In the fall of 2013, Bashiir stranded between Wajir and Mandera, close to the Kenyan Somalia border with a 22 tons load full of smuggled Brazilian Sugar. Going South the road was closed due to heavy rains, to the North Bashiir Al Shabaab had set up roadblocks. Having waited in vain for a couple of days Bashiir realised the potential of being the only person able to deliver sugar in an area where no goods could either enter or leave. He ended up selling the sugar for three times the normal price. Bashiir’s anecdote captures the economic potential in smuggling sugar in the region, while also hinting at the risk of operating in an area that is prone to militant attacks and where the physical infrastructure often collapses under the dramatic forces of the weather. Furthermore, it speaks to the porousness of the Kenyan-Somali border. The paper seeks to unfold the process of how the illegal sugar trade in the border-regions of Kenya not only supplies people marginalised from the formal trade networks, but more importantly it shows how the trade involves a range of governing authorities ranging from militias, to civil servants and police officers who either facilitates or obstructs the trade. The various levels of governance and regulation and evasion of the same constantly expose how this business puts the Kenyan state under pressure, and thus provide analytical insights to the challenges and potential of the link between business and state consolidation/formation.

Paper 3

Kirstine Varming / Roskilde University

The center as a political frontier: governing the fuel trade of Garoowe, Puntland

This paper examines how Garoowe, the small administrative capital of Puntland, becomes a political frontier (Raeymaekers 2009: 57) as state actors strive to regulate economic transactions and take control of town planning. Garoowe finds itself at the center of a political struggle as new governance initiatives and regulation efforts are initialized, leading to a wide range of reactions among the affected business owners. Focusing on two state initiatives that seek to regulate Garoowe’s small scale fuel trade, this paper shows how state actors and small to medium size business owners navigate (Vigh 2009) the unpredictable economic governscape (Stepputat 2013) of Garoowe. The notion of governscape entails the idea that templates and technologies of government are spread throughout the world, where they are translated and adapted to local circumstances. A large part of this adaptation occurs in the interaction with existing forms of governance and authority. The concept of navigation captures, not only how the business owners move through this governscape in constant motion, but also how state actors, and the policies they attempt to implement, engage and evade existing relations and regulations.

Paper 4

Stremlau Nicole / University of Oxford

Mobile money and dispute resolution in Somaliland

Despite continued violence and instability, there is a fascinating experiment underway in mobile banking in the Somali territories. Even in the absence of a strong legal and regulatory framework, ICT and mobile phone companies are investing and innovating in unprecedented ways. While many parts of the ICT sector have experienced growth, some of the most innovative platforms to emerge have facilitated the development of mobile money that allows users to send and receive money through their cell phones. This paper explores the role of Telesom’s Zaad mobile money in Somaliland. The adoption of this technology raises questions that have social and legal implications, particularly when it comes to handling disputes. Arguably one of the reasons that mobile money has thrived is because of the lack of government intervention and regulations. In the absence of a strong central government with effective banking or communications regulators, how are disputes involving mobile money resolved, by which entities, and according to which laws or regulations? This paper explores the different roles of actors in addressing conflicts that may arise such as fraud and theft; mistaken transfers; or disputes over agreed payments. We also ask questions about trust. In the absence of formal regulatory and banking systems, and given the liquidity of mobile money (ie the forced closure companies such as AlBarakat), why do Zaad users trust mobile banking, and even leave significant sums in e-wallets.

Paper 5

Mahmoud Hussein Abdullahi / Technical University of Mombasa

Trading on the margin: policies, politics and pastoral livestock marketing in Northeastern Kenya

This paper examines the development of Kenya’s policies regarding the pastoral livestock production and marketing sector highlighting key policy documents and decisions from the colonial administration to the current regime. Kenya’s policies towards pastoral production and pastoralism have been harsh since the country’s independence leading to the marginalization of the Somali people and their productive capacities. Policy development was sluggish over the past 50 years and its genesis is strongly believed to be responsible for the creation of pastoral predicament and policy quagmire facing the Somali-inhabited northeastern region. This paper 1) examines the genesis of the policy problem with regard to pastoral livestock marketing in northeastern Kenya; 2) demonstrates the significance of the livestock marketing sector to the national economy and pastoral livelihood; 3) outlines Somali livestock trader sentiments regarding flawed policies; 4) analyses how institutions created for the development of the pastoral areas did fail miserably and what others achieved; and 5) makes recommendations on ways to align government policies in line with local conditions, pastoral trade innovations and livestock trader needs and ways for policy improvement and pastoral inclusion in the mainstream agricultural economy.

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