Clingendael Netherlands Institute of International Relations
Abstract:
This policy brief analyses the extent to which diaspora investment can support economic development and livelihoods, with a particular focus on fragile settings. Using the case study of Somalia, the brief explores some of the main advantages and risks associated with this tool. On the one hand, diaspora investment can channel finance into productive activities in the diaspora’s country of origin, supporting the creation of revenue streams, while also generating returns for diaspora investors. On the other hand, particularly in fragile settings, these investments can also undermine social cohesion and even increase the likelihood of violent conflict, especially if they are channelled along identity lines. On the basis of this analysis, the brief offers the following recommendations to donor governments interested in promoting diaspora investment in Somalia and beyond: (i) to ensure effectiveness, donors should gather comprehensive, in-depth data on the needs and preferences of both potential investors in the diaspora and investees in the country of origin; (ii) to avoid exacerbating tensions and conflict, donors should be as inclusive and transparent as possible in their engagement with stakeholders, most notably in the selection of beneficiaries; (iii) any efforts to promote diaspora investment in fragile settings should be grounded in a thorough understanding of the specific context in which they are implemented, in order to understand both the economic and political implications of such investment.
Topic:
Economics, Politics, Diaspora, Investment, and Fragility
Guled Ahmed joins the program to discuss the political climate in Somalia, its recent elections, security conditions, and the role of external actors including the African Union, Gulf states, Turkey, and the U.S.
Topic:
Security, Politics, Elections, and African Union
Political Geography:
Africa, Turkey, Somalia, United States of America, Gulf Nations, and Horn of Africa
Jos Meester, Johannes Claes, Claire Elder, and Guido Lanfranchi
Publication Date:
05-2021
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
This report explores SME growth and resilience in the fragile Somali context during the COVID-19 pandemic, including its relation to wider political-economic developments. The pandemic has demonstrated how Somali businesses have continued to be resilient and at times even thrive during crisis, but it has also exposed the sizeable vulnerability associated with the Somali territories’ trade, import dependence and financing system. The global COVID-19 pandemic has disrupted the supply and trans-shipment of goods. This has created shortages and price fluctuations for Somalia’s import-based economy and hampered the country’s payment system. It has also reduced remittances, buying power, access to finance and tax revenues. Shifts in funding streams have realigned political financing patterns and created price instability as political actors seek new ventures through which to move funds.
Although the economic shock brought about by COVID-19 has not structurally changed the Somali political economy, it has exacerbated existing patterns of inequality. The contribution of the private sector to the COVID-19 response has likely supported a range of livelihoods throughout the Somali territories, yet the preferential access to governance and strong competitive position that allowed this also highlights a worrying level of inequality and market concentration, and raises questions regarding government legitimacy. It seems likely that the COVID-induced economic crisis has therefore reinforced rather than destabilised those dynamics that prevent small businesses from competing on an equal footing and fragile situations from developing and stabilising.
Topic:
Economics, Markets, Politics, COVID-19, and Fragile Markets
Secessionist conflicts are not a novel occurrence in the African continent. Since the dawn of independence in the 1960s, a number of countries
have been home to rebellions involving marginalized communities or ethno-linguistic groups demanding territorial separation from existing states
with the goal to create new independent states. The list is long and includes
territorial units in countries such as Angola (Cabinda), Comoros (Anjouan
and Mohedi), The Democratic Republic of Congo (Katanga, South Kassai)
Ethiopia (Eritrea, Ogaden, and Oromia, Afar), Mali (Tuaregs), Niger (Tuaregs),
Nigeria (Biafra, Niger Delta), Senegal (Casamance), Somalia (Somaliland) and
Sudan (South Sudan) only to mention a few amongst others. [...] ants of successful secessions with particular reference to the African
continent. Its central argument is that the successful outcome of the secessionist struggle in Eritrea is the result of a tight combination of domestic and
external factors. These include Eritrea’s historical and legal claims for territorial self-determination, the Dergue’s policies of alienation, the effectiveness
of the Eritrean Peoples Liberation Front’s strategies (EPLF), the collapse of
the Soviet Union and the end of the Cold War, and the supportive role of the
United States of America.
Topic:
Politics, Domestic Politics, Conflict, and Secession
Political Geography:
Africa, Sudan, Ethiopia, Senegal, Nigeria, Somalia, Angola, Eritrea, Mali, Niger, Comoros, and Democratic Republic of Congo
Uganda, Kenya, South Africa, Djibouti, Liberia, Mozambique, Tanzania, Nigeria, Rwanda, Somalia, Burundi, Eritrea, Ghana, Guinea, South Sudan, Guinea-Bissau, Cameroon, Comoros, Gabon, Seychelles, Sao Tome and Principe, and Republic of Congo