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Somaliland’s authoritarian turn:
oligarchic–corporate power and
the political economy of de facto states
International Affairs 97: 6 (2021) 1749–1765; doi: 10.1093/ia/iiab174
© The Author(s) 2021. Published by Oxford University Press on behalf of The Royal Institute of International Affairs. This is
an Open Access article distributed under the terms of the Creative Commons Attribution License (
licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work
is properly cited.
The prevailing narrative of Somaliland’s democratic successes has to date stressed
the pre-eminent role of bottom-up statebuilding, the strength of social institutions
and the absence of foreign aid.1 This research identifies Somaliland as one of the
most effective entities in the Horn of Africa, even when compared to its neighbours—
de jure recognized states such as Somalia, Ethiopia and Djibouti.2 This
depiction of Somaliland as a safe haven of security and stability—as opposed to
the warlord- and terrorist-ridden Somalia—has, however, for decades downplayed
internal political dynamics and complex crises.3 A political economy perspective
provides new insights that challenge certain underlying assumptions and dominant
discourses about Somaliland’s processes of democratization and development.
While democracy has been demanded and fought for from below since it declared
independence in 1991, original findings unveil how cross-border oligarchic–corporate
networks, linked also to the Djiboutian patron state, as well as dependence on
trade and security rents, have restricted democratization, leading to the formation
of an ‘oligopolistic state’ and a ‘peaceocracy’. In putting forward this argument,
this article focuses attention on the distinct challenges de facto states face in balancing
political control and financial hardship, and the unique and uneven development
trajectories, including creative governance structures, that are not captured
by Weberian state models and path-dependent understandings of democratization.
While the study of de facto states has gained increasing prominence in International
Relations, political economy research is notably absent from these discussions.
4 This is partly because these jurisdictions are not researched in terms of

  • Funding for this article was facilitated by the Cyril Foster Peace Fund at Oxford University (2018) and the
    Economic and Social Research Council (ESRC), project ES/P008038/1, ‘CPAID: Centre for Public Authority
    and International Development’ at the London School of Economics and Political Science from 2019 to 2021.
    1 Yaniv Voller, ‘Contested sovereignty as an opportunity: understanding democratic transitions in unrecognised
    states’, Democratisation 22: 4, 2013, pp. 610–30; Sarah G. Phillips, ‘When less was more: external assistance
    and the political settlement in Somaliland’, International Affairs 92: 3, 2016, pp. 629–45.
    2 Mark Bradbury, Becoming Somaliland (Oxford: James Currey, 2008).
    3 Roland Marchal, ‘Warlordism and terrorism: how to obscure an already confusing crisis? The case of Somalia’,
    International Affairs 83: 6, 2007, pp. 1091–106.
    4 James Harvey and Gareth Stansfield, ‘Theorizing unrecognized states: sovereignty, secessionism and political
    economy’, in Nina Caspersen and Gareth Stansfield, eds, Unrecognised states in the international system (Abingdon:
    Routledge, 2011), pp. 1–26. Magdalena Dembinska and Aurélie Campana, ‘Frozen conflicts and internal
    dynamics of de facto states: perspectives and directions for research’, International Studies Review 19: 2, 2017,
    pp. 254–78.
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    expectations of effective developmental performance. Instead, homogenizing,
    singular and linear narratives of de facto statehood see these entities as deviations
    from western institutional frameworks and as hot-spots of terrorism, criminality
    and corruption.5 I set out here to fill this gap, examining at close range how crossborder
    oligarchic–corporate interests brought stability but also limited democratization.
    This perspective includes assessing the canny political manoeuvrings of
    Somaliland officials and oligarchic–corporate structures in creating a ‘paper leviathan’
    or hollow state, 6 and how western donors and the politics of foreign aid, by
    means including the securitization of aid, have empowered dominant clientelistic
    networks and hindered democratization efforts for decades. This article also details
    how the ‘oligopolistic state’ in Somaliland was rooted in a revolutionary ideology
    of privatized governance that motivated Somalia National Movement (SNM)
    in the 1980s to resist Siad Barre’s socialist and predatory military regime. After
    independence, this revolutionary system sought to overturn colonial hierarchies
    of power and protect market-led development. It brought elements of stability for
    a time, but also lessened the bargaining power of the state vis-à-vis domestic firms
    and hindered the formation of a professional bureaucracy and legitimate central
    authority, and weakened popular mobilization. This system was tolerated (even
    encouraged) internationally in line with commitments to depoliticized economic
    development models until the formation of a crony capitalist system under President
    Mohamed Mohamoud ‘Silanyo’ that threatened Somaliland’s premier role in
    the fight against global terrorism.
    Following his election in 2010, President Silanyo sought to accelerate state
    capture of the political economy—implementing a model of Djiboutian-style
    presidentialism—and he rewarded loyal business associates with new opportunities
    in Islamic finance and business. Yet, Silanyo was never able to rebalance the
    bargaining power of the state vis-à-vis domestic firms nor limit the opposition’s
    access to political finance. What was described as a ‘decentralized kleptocratic
    system’, of affiliated oligarchs and ‘deniable authoritarianism’,7 rather exposed the
    depths of collusion between business and government officials, and the nature of
    the corrupt and exclusive statebuilding enterprise also aided by foreign aid and
    security rents that empowered oligarchic–corporate structures.
    While Somaliland has always received less aid than Somalia,8 the 2013 special
    arrangement, awarded as part of the New Deal Compact with the federal government
    of Somalia, provided access to funding from the EU and other donors
    earmarked for security, trade and resilience. Important was that minimal aid
    was directed for ‘state effectiveness’ due to political sensitivities and the region’s
    5 See Laurence Broers, ‘Resourcing de facto jurisdictions: a theoretical perspective on cases in the south Caucasus’,
    Caucasus Survey 3: 3, 2015, pp. 269–90; Scott Pegg, ‘Twenty years of de facto state studies: progress,
    problems, and prospects’, Oxford research encyclopedia of politics (Oxford: Oxford University Press, 2017).
    6 Daron Acemoglu and James A. Robinson, The narrow corridor: states, societies, and the fate of liberty (New York:
    Penguin Publishers, 2019).
    7 These concepts, although not in the public discourse on Somaliland, were repeated in interviews and focus
    group discussions conducted from 2015 until 2020.
    8 Federal Government of Somalia, Ministry of Planning, Investment and Economic Development, Aid flows in
    Somalia (Mogadishu, May 2019).
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    ambiguous status within the 2012 provisional federal constitution. This had
    deleterious implications. Democratization has always been a subordinate issue
    for donors who paid lip service to bottom-up statebuilding activities but made
    few attempts to support or maintain these systems. Like elsewhere in Africa, and
    indeed globally, the securitization of aid has entrenched illiberal and authoritarian
    states by promoting the state as donors’ preferred ‘partner’ in development,9
    creating aid flows no longer accountable to citizens and providing states with the
    machinery to repress opponents and democracy.10 In Somaliland the securitization
    of aid and access to new resources propped up the state’s security apparatus and
    a military–logistics complex that reinforced the power of oligarchic–corporate
    structures rather than a national, democratic state.
    In 2017, the international community and population widely endorsed Musa
    Bihi Abdi not as a supporter of democracy but as an antidote to corruption and
    political instability. He used his military credentials to re-confirm commitments
    to security, but he failed to assert political control over the economy. Kulmiye
    Party’s tenure in power (2010–21) came to symbolize the fierce power struggle over
    how to balance financial hardship and ‘supranational’ corporate interests (that had
    fought for and singlehandedly financed the liberation movement and independence
    project) with political control and the nation-state agenda. By examining
    Somaliland’s political economy and its effects on internal politics, this study
    provides new insights for understanding governance structures and outcomes
    within de facto states. It offers strong evidence of how collusive cross-border elites,
    regional patron states and western donors have limited democratization in Somaliland
    through the creation of a ‘peaceocracy’ and ‘oligopolistic state’.11 This study
    also raises important questions about how new donors in the Gulf and in Asia,
    and opportunities for recognition through Islamic finance and business, affect de
    facto states’ relationship with the international system, including commitments to
    democratization.12 It argues that the prevailing democratic-success narrative, as it
    has been constructed and reproduced, has not served the interests of Somalilanders
    but those of elites and donors keen to maintain the status quo.
    Analysing the political economies of de facto states raises a number of methodological
    and political challenges, including poor availability of data. This study
    draws on a number of robust sources, including 110 interviews with politicians,
    former liberation fighters, business actors, senior government officials and international
    organizations, and archival work conducted in Somaliland from 2015 to
    2021.13 Original data gathered from the chamber of commerce, business accounts
    9 Jonathan Fisher and David Anderson, ‘Authoritarianism and the securitization of development in Africa’,
    International Affairs 91: 1, 2015, pp. 131–51; Will Jones, Ricardo Soares de Oliveira and Harry Verhoeven,
    Africa’s illiberal state-builders, working paper no. 89 (Refugee Studies Centre, University of Oxford, 2013).
    10 Tobias Hagmann and Filip Reyntjens, eds, Aid and authoritarianism in Africa: development without democracy
    (London: Zed, 2016).
    11 Rita Abrahamsen, ‘Africa and international relations: assembling Africa, studying the world’, African Affairs
    116: 462, 2017, pp. 125–39.
    12 Davinia Hoggarth, ‘The rise of Islamic finance: post-colonial market-building in central Asia and Russia’,
    International Affairs 92: 1, 2016, pp. 115–36; Lena Rethel, ‘Whose legitimacy? Islamic finance and the global
    financial order’, Review of International Political Economy 18: 1, 2011, pp. 75–98 at p. 94.
    13 Many interviewees (particularly senior government officials and those working for international organiza-
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    and intelligence reports, as well as interviews with business actors, enables an
    analysis of hitherto hidden corporate ownership (including around Islamic finance
    and banking institutions). Additional data is drawn from government and media
    archives (including leaders’ published and unpublished statements, speeches and
    policy agendas) and donor surveys. Participant and non-participant observation of
    public debates on leadership and economic development plans also provides invaluable
    insights on how de facto states balance the challenges of financial hardship,
    political control and democratization. Together, these data sources provide a rich
    account of Somaliland’s development since independence, and particularly of the
    transformations that unfolded after 2010.
    The next section first outlines the analytical and conceptual framework
    surrounding the concepts of ‘oligopolistic states’ and ‘peaceocracy’. The following
    section then examines how the oligopolistic state emerged out of a revolutionary
    liberation agenda committed from the outset to business autonomy, market-led
    development and self-sufficiency in the shadow of Siad Barre’s predatory regime,
    and to overturning power structures inherited from the colonial state. The
    remaining sections then examine how attempts by President Silanyo to rebrand
    Somaliland as a player in the global political economy and to capture control of
    the economy presented new security concerns, a rupture in the political settlement,
    and laid the foundations for the rise of a populist authoritarian. The ruling
    Kulmiye Party, under President Musa Bihi Abdi after 2017, tried to implement
    stringent ‘monopolistic’ control over the country’s political economy and its territorial
    boundaries—efforts that continued to reveal the weak bargaining power of
    the state vis-à-vis domestic firms.
    Somaliland’s ‘oligopolistic state’ and ‘peaceocracy’
    Somaliland constitutes what we can call an ‘oligopolistic state’, referring to the
    small number of firms and elites which, after independence—and through discreet
    cross-border business networks and unaccounted financial flows—colluded,
    either explicitly or tacitly, to limit competition and restrict the authority of
    the state in order to achieve above-normal market returns and protections.14 In
    particular, the deep entanglements of Somaliland’s finance and politics with
    neighbouring Djibouti, and the polity’s dependence on trade and security rents,
    have since underlain poor elite commitment to democratization as well as the
    enduring legacy of the SNM over politics. Where other de facto states may be
    either subsistence economies (relying on local forms of production and taxation)
    or rentier states (dependent on natural resources or a primary patron for formal
    loans),15 Somaliland has limited potential for industry, little agriculture and is
    tions) requested anonymity, given the nature of the sensitive issues discussed.
    14 On how such oligopolies emerge in conflict-affected contexts, see Antonio Giustozzi, The resilient oligopoly:
    a political-economy of northern Afghanistan 2001 and onwards (Kabul: Afghanistan Research and Evaluation Unit,
    Dec. 2012), pp. 4–5.
    15 Broers, ‘Resourcing de facto jurisdictions’, p. 273. See also Michael Ross, ’Does oil hinder democracy?’, World
    Politics 53: 3, 2001, pp. 325–61.
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    heavily reliant on import–export industries and the expansion of financial and
    business services (and to a lesser extent remittances).16 Pritchett et al. emphasize
    the ‘bad politics’ that emerge when such powerbroker industries dominate, as they
    fuel corruption and business-government collusion.17 Others have highlighted the
    risks of ‘small states’ relying on financial and business services as supporting the
    formation of undemocratic, offshore tax havens.18
    By exerting excessive influence over policy-making and politics as the region’s
    major lenders, employers and taxpayers—using in-kind loans to support political
    campaigns—Djiboutian oligarchs and sectoral-specific rent relationships
    have limited forms of economic liberalization and democratization that would
    challenge structures of accumulation and power. In these oligopolistic systems,
    elites are not entirely autonomous and independent of society, as in rentier
    states,19 but they are not compelled to structure their relationship with society
    in such a way as to construct common projects around productive and inclusive
    development. While these states may exercise the functions of a state, and can
    create stable environments and mimic compliance with regulatory and governance
    structures, they also come into confrontation with the political–bureaucratic
    machinery of the nation-state and thrive in conditions of state regulatory failure,
    porous borders and the privatization of redistributive institutions. States of this
    type, such as Somaliland, lurch between the solidification of public–private ties
    and a more opaque rentierism, that create uneven development and governance
    and complicate external assessments of governance and political outcomes. For
    instance, corporate taxation is notoriously low (even lower than in Somalia) as
    successive governments have feared the risk of business flight to other regions (as
    businesses frequently threaten).20
    The oligopolistic state, in turn, also created a ‘peaceocracy’ that was necessary
    for business and external legitimacy. Holding frequent, peaceful elections adheres
    to certain minimal requirements for international legitimacy but also inherently
    restricts core tenets of democratization linked to freedoms and civil liberties.21
    The concept of peaceocracy has been used in other post-conflict contexts to
    refer to the formation of limited electoral democracies and access orders,22 where
    peaceful elections are secured through the use of ‘peace-at-all-costs’ narratives,
    16 ‘Somaliland’s private sector at a crossroads: political economy and policy choices for prosperity and job creation’
    (Washington DC: International Bank for Reconstruction and Development, The World Bank, 2016).
    17 Lant Pritchett, Kunal Sen and Eric Werker, Deals and development: the political dynamics of growth episodes (Oxford:
    Oxford University Press).
    18 See Ronen Palan, The offshore world: sovereign markets, virtual places, and nomad millionaires (Ithaca, NY: Cornell
    University Press, 2005); Ricardo Soares de Oliveira, Researching Africa and the offshore world, working paper
    (Oxford: Oxford Martin Programme on African Governance, 10 June 2021).
    19 Peter Evans, ‘Predatory, developmental, and other apparatuses: a comparative political economy perspective
    on the Third World state’, Sociological Forum, vol. 4, 1989, pp. 561–87.
    20 World Bank, Somalia economic update: edition no. 2, mobilizing domestic revenue for Somalia’s economic reconstruction
    (Washington DC, 2015), p. 35, fig. 1.13. Author interviews with more than 30 business actors, Hargeisa, Nov.
    2017 and April 2018.
    21 See Gabrielle Lynch, Nic Cheeseman and Justin Willis, ‘From peace campaigns to peaceocracy: elections,
    order and authority in Africa’, African Affairs 118: 473, 2019, pp. 603–27.
    22 For definition of ‘limited access orders’, see Douglass C. North, John Joseph Wallis, Steven B. Webb and Barry
    R. Weingast, Limited access orders in the developing world: a new approach to the problems of development, policy research
    working paper no. 4359 (Washington DC: World Bank, 2007).
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    the stifling and criminalizing of dissenting views and open political debate, and a
    heavy security presence, but are nonetheless greeted internationally as legitimate
    and secure favourable aid relations.23 Somaliland’s peaceocracy, which has been in
    existence since its transition to multiparty democracy in 2002, has recorded some
    of the highest rates of election turnout on the continent (80 per cent of registered
    voters turned out for the presidential elections of 2016).24 Yet every election
    since 2002 has also seen high rates of state interference, intimidation, rigging,
    and the stifling of opposition activity and media freedom, which often go underreported
    where public criticism of corrupt officials and authorities is also criminalized.
    25 Elites have for decades used the restrictive three-party system (effectively
    frozen since 2002),26 along with constitutional provisions and electoral laws, to
    stay in power and prevent any genuine oppositional pole from emerging. The
    recent municipal and parliamentary elections of 2021 were no exception: at least
    seven candidates were detained to pre-empt any challenge to the ruling Kulmiye
    party.27 These heavy-handed tactics just proved less effective this time around.
    As such, rather than serving the population as a whole, Somaliland’s peaceocracy
    has protected the interests of a select group of financial and political elites
    for decades. These interests have deliberately kept civil society organizations and
    formal offices and ministries weak,28 and repeatedly postponed important parliamentary
    elections,29 in turn restricting the space for alternative political projects
    to emerge.30
    For decades, high rates of electoral participation, relative peace and stability, and
    economic self-sufficiency have been mistakenly construed as markers of democratization.
    A political economy perspective, by contrast, reveals weak elite commitments
    to democratization and the technologies of power that have been used to
    undermine genuine democratic reform and weaken popular mobilization. The
    following section examines the origins of Somaliland’s oligopolistic state within
    23 Somaliland has frequently been characterized as a ‘hostage to peace’: see Human Rights Watch, Hostages to peace:
    threats to human rights and democracy in Somaliland (New York, 2009),
    hostages-peace/threats-human-rights-and-democracy-somaliland. (Unless otherwise noted at point of citation,
    all URLs cited in this article were accessible on 26 Sept. 2021.)
    24 Michael Walls, Conrad Heine, Andrea Klingel, Carrie Goggin and Ahmed Farag, The limits of consensus? Report
    on the Somaliland presidential election (London: University College London International Election Observation
    Mission, 13 Nov. 2017).
    25 ICG, Somaliland, p. 20; International Crisis Group (ICG), Somaliland: the strains of success, Africa Briefing no.
    113 (Brussels, 2015), pp. 14–15.
    26 Author in-person interview, former member of Somaliland parliament (1997–2005), Hargeisa, Sept. 2016.
    Oisin Tansey calls the three-party system one of the most problematic aspects of Somaliland’s political transition:
    ‘Does democracy need sovereignty?’, Review of International Studies 37: 4, 2011, pp. 1515–36.
    27 See Human Rights Centre, A quarterly report April 2021 (Hargeisa),
    april-2021/; author phone interview, former member of SNM, Ali Guray, Hargeisa, June 2021.
    28 Sarah G. Phillips argues the weakness of formal institutions in When there was no aid: war and peace in Somaliland
    (Ithaca, NY, and London: Cornell University Press, 2020). Interviews and non-participant observation of
    bureaucracy reveal that this is a deliberate strategy pursued to exercise social and political control.
    29 Prior to the 2021 elections, the parliament elected in 2005 for five years had served 15 years; the Guurti or
    House of Elders has not faced elections since 1997. See Centre for Policy Analysis, Somaliland: the extensionbased
    democracy (Hargeisa, 2019),
    30 Author interviews and focus group discussions, 2015 and 2018, and with local activists and party officials,
    Hargeisa, Nov. 2016.
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    the liberation movement as these structures of power and ideologies of privatized
    governance continue to shape contemporary politics and power struggles.
    The revolutionary origins of Somaliland’s oligopolistic state
    Under colonial rule, and in contrast with the more interventionist policies of
    Italian colonizers in Somalia, Somaliland’s business community appreciated
    considerable autonomy from the ‘state’, developing a stronger orientation towards
    the Gulf countries.31 However, during Somaliland’s long union with Somalia
    (1960–91), and particularly under Siad Barre’s scientific socialism after 1969,
    Somaliland traders faced heavy restrictions as the government violently seized
    northern assets. The experience of political and economic marginalization,32 as
    a consequence of southern domination, generated two movements within the
    Somaliland region: religious nationalism, including the rise of organizations such
    as ‘Waxda’ (Unity of Muslim Youth); and capitalist mobilization against socialism,
    which was bad for business.33 Not well understood in the study of Somaliland
    is how capitalists during this time viewed their longer-term interests as aligned
    with a nationalist struggle against broader waves of socialism in the region (under
    leaders including Haile Selassie in Ethiopia and Al Nasir Muhammed in Yemen),
    and how this resulted in mutual commitments to Islamic ideals of self-sufficiency,
    market-led development and entrepreneurship as the foundations of the national
    project.34 These capitalists, represented initially by the Saudi group, dominated
    the more liberal ideas of the London group and the local grassroots Uffo group in
    the founding of the SNM, 35 and these hierarchical structures of power continued
    to influence political developments post-independence. Capitalists along with the
    military fighters decisively pushed for independence when it was evident that
    southern groups would continue to dominate the politics and economy of any
    newly liberated Somali state, and equally quickly moved against attempts by the
    SNM executive committee to establish a central army and government.36
    By independence, the SNM was deeply divided among different factions with
    fundamental disagreements over the nature of state power, the role of Islam, and
    how to balance the distribution of resources between clans—this would in turn
    spark a civil war. The single most important driver of the civil war was the fact
    that, at independence, the SNM was under the command of Abdirahman Ahmed
    Ali Tuur, who was to lead the two-year transitional government until a civilian
    government could take over. Yet Tuur represented the Garhajis clan, who were
    widely seen as beneficiaries of British indirect rule, landowners and more populous
    than other groups, having also commanded more fronts than other clans in the
    31 Roland Marchal, Final report on the post-civil war Somali business class (Paris: Sciences Po, 1996), p. 15.
    32 Hussein A. Bulhan, Politics of Cain: one hundred years of crises in Somali politics and society (Bethesda, MD: Tayosan,
    33 Author in-person interviews with members of the Saudi group, Hargeisa, Nov. 2018 and Nov. 2019.
    34 Author interviews with members of the Saudi group, Hargeisa, Nov. 2018 and Nov. 2019.
    35 On the dominant authority of the Saudi group within the SNM, see Marleen Renders, Consider Somaliland:
    state-building with traditional leaders and institutions (Leiden: Brill, 2012).
    36 Author interviews with ex-SNM officials and intellectuals, Hargeisa, May and June 2020.
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    liberation fight. There was widespread concern among factions within the SNM
    that the Garhajis would dominate the post-independent state.37 At the 1991 Burco
    conference, Ahmed Silanyo and Saleban Gaal (two key actors within this faction
    of the SNM) even worked actively against recognition, ‘calling for the international
    community not to recognise Somaliland and [not to give it] any aid …
    saying that Somaliland was in conflict amongst its people’.38 What emerged was a
    ‘second liberation’ of Somaliland—an internal civil war (1992–4)—through which
    a new coalition of capitalist and non-dominant clan interests would seek to redistribute
    assets from the former colonial beneficiaries but also cement a new political
    order with strong commitments to market-led development as a preferred alternative
    to hegemonic state power.39 These synergies between corporate and national
    interests, backed also by an anti-colonial and anti-socialist ideology, would not
    easily bring to power a national, democratic government.
    Corporate sponsorship of the statebuilding project after independence in 1991
    has featured prominently in the study of Somaliland. Scholars have, for instance,
    documented how a group of ten or so Djibouti-based traders from the Isaaq clan,
    known as the ‘exclusive club’,40 gave the young Somaliland credit and financed the
    peace,41 leading to what Alex de Waal called ‘a profit-sharing arrangement amongst
    livestock traders’.42 Yet no scholarship has looked at the deep entanglements of the
    Djiboutian patron state, affiliated oligarchs and Somaliland officials (as far back
    as the SNM), and how these cross-border networks of ‘business–state–clan relations’
    together overturned the inherited colonial state,43 became stakeholders in the
    civil war of 1992–4 and created an oligopolistic state opposed to democratization.
    Immediately after independence, these cross-border networks seized control of
    strategic outposts, trade corridors, ports and imports, sidelining groups previously
    aligned with the statebuilding enterprise (in particular the Garhajis, who had previously
    dominated livestock, import/exports and the aviation sector).44 Djiboutian
    oligarchs and affiliated banks used credit to the Somaliland polity to secure free
    economic rein (without taxation). Somaliland also committed itself to security and
    intelligence-sharing with Djibouti. In this collusive and coercive relationship, it
    would be frequently reported that ‘Djibouti de facto owned Somaliland’ and could
    cut off the polity from internet and financial services at any point.45
    From this perspective, the development of President Mohamed Haji Ibrahim
    Egal’s ‘shrewd, authoritarian politics’ and one-party state (from 1993 to 2002) was
    37 Author interviews with ex-SNM officials and intellectuals, Hargeisa, May and June 2020.
    38 Author interview with former member of the Uffo group and local activist, Hargeisa, 25 Oct. 2017.
    39 Author interview with former member of the Uffo group and local activist, Hargeisa, 25 Oct. 2017.
    40 Marchal, Final report, p. 28.
    41 Dominik Balthasar, ‘Somaliland’s best kept secret: shrewd politics and war projects as means of state-making’,
    Journal of Eastern African Studies 7: 2, 2013, pp. 218–38.
    42 Alex de Waal, ‘The wrong lessons: the vanishing legacy of Operation Restore Hope’, Boston Review, Jan. 2004,; Phillips, When there was no aid.
    43 This conceptualization was used in an author interview with an ex-parliament member, June 2020.
    44 Claire Elder and Annette Hoffman, ‘Somalia’s business elites: political power and economic stakes across
    the Somali territories and in four key economic sectors’, Clingendael CRU report for World Bank and IFC
    (internal) (The Hague, 17 Feb. 2017). See also Balthasar, ‘Somaliland’s best kept secret’, p. 220, on the sidelining
    of the Garhajis from statebuilding.
    45 Author interviews with businessmen and local activists, Nov. 2018 and Nov. 2019.
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    less a reflection of the strength of a single charismatic leader or unitary state, as has
    frequently been reported, but more an indication of the growing power of new
    oligarchic–corporate structures tied to the ‘rainbow coalition’ or jeegan.46 More
    than his successors, and understanding the implications for economic and political
    sovereignty, Egal would resist Djibouti’s oversized influence. This expansion of
    power was further halted for a time following the sudden death of Egal; this
    unexpectedly brought Dahir Riyale, who was closely aligned with the Garhajis,
    to power, and the rainbow coalition moved into the opposition pole. However,
    the election of President Silanyo in 2010 solidified the control of the rainbow
    coalition and its cross-border networks; he then set about defying the post-Burco
    political settlement, committing to only very marginal power-sharing and distribution
    of economic assets.
    Silanyo’s decentralized kleptocracy
    Once elected in 2010, President Silanyo championed national transformation
    through the rapid expansion of military bases, critical infrastructure, and Islamic
    financing and banking, with the aim of positioning Somaliland as a key player in
    the global political economy of logistics and trade.47 Silanyo rebranded himself
    as a reformed SNM hero, wooing donors as ‘a diaspora leader more pragmatic
    than his predecessors’.48 In courting new private financiers in the Gulf and Asia
    he also hardened the moral boundaries around a self-sufficient, stable Somaliland
    in contrast to the aid-dependent and chaotic south. He made highly symbolic
    appeals to his progress towards achieving inclusive development, as represented
    by projects including the 400-kilometre Burao–Erigavo road. In an escalated bid
    for recognition by way of economic development, he expanded opportunities in
    Islamic finance and banking. In 2012 he signed the Islamic Banking Bill, allowing
    privately owned banks—including the Mogadishu-based Premier Bank and Amal
    Bank—to open and expand business in Somaliland, and also attracted the Islamic
    Development Bank. WorldRemit, led by the Somaliland–UK diaspora figure
    Ismail Ahmed, also opened up operations in Hargeisa in 2010, and would become
    a leading global player in fintech.49 Similarly, Silanyo’s patronage would aid the
    rapid expansion of Dahabshiil, which would become one of the largest remittance
    transfer companies in the world—operating in 126 countries and expanding
    domestically, with interests in telecommunications and utilities, as well as housing
    and construction—through rapid privatization efforts supported by the government.
    Other large businesses groups—including GSK Group, Deero Group,
    46 The Isaaq consist of eight sub-clans; five of them have formed an alliance under the banner of the Habar
    Jeclo (Tol Je’lo, Muuse, Sanbuur Ibraan) and Habar Awal (Sacad Muse and Isse Muse) in order to balance the
    Garhajis dominance (Idigale and Habar Yonis). Jeegan is a pejorative term used in political discourse to refer to
    the rainbow coalition.
    47 Andres Schipani, ‘Somaliland gears up for “healthy” battle of ports’, Financial Times, Sept. 2021, https://www.
    48 Author interviews with UK and EU representatives in Hargeisa, Oct. and Nov. 2016.
    49 Nabila Ahmed and Crystal Tse, ‘WorldRemit adds Spotify CFO Vogel to board as it mulls 2021 IPO’, Bloomberg,
    23 Nov. 2020.
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    OMINCO Group and MSG Group (all Isaaq-owned)—would expand power
    while paying minimal taxes that could be converted into public services or local
    In his sights, he had the model of President Ismail Omar Guelleh’s Djibouti.
    Guelleh, known as Africa’s ‘most friendly little dictator’, had been able to establish a
    ‘commercial state–city’ while deflecting any international criticism or sanctions.51
    To this end, Silanyo expanded the influence of key Djiboutian oligarchs—for
    instance, Mohamed Aw Saed’s SomCable secured an exclusive 30-year agreement
    granting it control of fibre optic cables throughout Somaliland in return for financial
    support to Silanyo’s campaign.52 SomCable would be accused of repeatedly
    shutting down websites, intimidating competitors, paying off parliamentarians
    and falsely claiming to have made philanthropic contributions.53 More than any
    of his predecessors, Silanyo had set out to directly challenge the economic domain
    of the Garhajis by courting foreign capital, and by disseminating public contracts
    and licenses for natural resources to loyal jeegan business associates.54 His moves
    to privatize the state were revealed most clearly by how he absorbed Dahabshiil’s
    core management into his government. The ministries of foreign affairs, the presidency,
    telecommunications and energy were all headed by former managers in
    Dahabshiil’s international corporate empire.55 The expansion of the kleptocratic
    system included the involvement of Silanyo’s close family. For instance, Silanyo’s
    son-in-law Bashe Awil Omar (then Ambassador to the UAE) brokered large infrastructure
    projects and the privatization of public assets (including electricity grids,
    cement production, the port and livestock quarantine).56 Widespread corruption
    allegations would engulf Silanyo’s administration and the provision of licences
    and contracts around the DP World deal and oil exploration.57
    Silanyo had also virulently used narratives of self-sufficiency and economic
    development to disparage democratization.58 While his rebranding around
    50 Elder and Hoffman, ‘Somalia’s business elites’, p. 43.
    51 President Guelleh would go on to win his sixth term in office in May 2021 with 99 per cent of the vote: see
    Aly Verjee, ‘A friendly little dictatorship in the Horn of Africa: why the world doesn’t care about Djibouti’s
    autocracy’, Foreign Policy, 8 April 2011,
    the-horn-of-africa-2/; Daher Ahmed Farah, ‘In Djibouti, a dictator clings to power and extends suffering’,
    Vanguard Africa, 19 April 2021,
    52 Elder and Hoffman, ‘Somalia’s business elites’, p. 41.
    53 Aly Verjee, Adan Abokor, Haroon Yusuf, Amina Warsame, Muhammad Farah and Mohamed Hersi, The
    economics of elections in Somaliland: the financing of political parties and candidates (Nairobi: Rift Valley Institute,
    54 Elder and Hoffman, ‘Somalia’s business elites’, p. 35.
    55 Author in-person interviews with businessmen and government officials, Hargeisa, June and Nov. 2017 and
    Nov. 2019.
    56 Emma Lochery, ‘Generating power: electricity provision and state formation in Somaliland’, DPhil, University
    of Oxford, 2015. See also Mohamoud Hashi, former minister and chief Kulmiye strategist, confessing
    Kulmiye’s blatant use of state power in a press conference:
    57 In May 2016, DP World signed a 30-year US$442 million agreement with the government of Somaliland to
    develop and operate a regional trade and logistics hub at the Port of Berbera. Contracts were also allocated for
    the Berbera Oil Terminal. See Bashir Ali, ‘How an unrecognised state’s port deal could shift dynamics across
    the Horn’, African Arguments, 1 May 2018,
    58 Author in-person interviews with ex-SNM officials and intellectuals, Hargeisa, May and June 2020.
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    economic development certainly attracted donors who elsewhere in Africa have
    supported ambitious developmental state models over democratization,59 the red
    line was any perceived threat to security. Western donors refrained from making
    any negative statements about the quality of governance in Somaliland until after
    2015, when there was an uptick in security events and Silanyo simply stopped
    ‘showing up to aid meetings’.60 Unbeknownst to Silanyo at the time, the expansion
    of economic opportunities through Islamic banking and finance had also
    empowered opposition and political liberalization against his administration.61 As
    he began to lose control over his kleptocratic system, Silanyo jailed journalists and
    deployed paramilitary forces against political opponents and groups,62 while also
    ‘resuscitating’ the militant SNM legacy through the reconstruction of monuments
    and the excavation of mass graves attributed to Barre-era war atrocities. He also
    sought to re-establish political control by using internationally sponsored ‘talks
    with Somalia’ to reinforce the dominant ‘national’ framing narrative of external
    threats and internal unity.63
    Consistent with Silanyo’s lukewarm engagement with western donors, corporate
    actors also started to promulgate a narrative of ‘philanthrocapitalism’ as an alternative
    development model to aid.64 Through philanthrocapitalism, the private sector
    would assume some responsibility for filling the gaps in state provision of public
    services through corporate charity and donations, in exchange for low taxation.
    This form of governance has been widely criticized by Linsey McGoey and others
    for entrenching powerful financial elites and eliminating the social welfare state.
    During Silanyo’s tenure, this model constituted minor financial commitments in
    exchange for large tax breaks, where ‘community-led projects’ and support for
    conflict mediation largely aided business expansion plans in the region rather than
    leading to national transformation or poverty reduction.65 There are also reports
    of companies falsifying reports of philanthropic activities altogether, leading to
    erroneous notions of business contributions to development.66 This model has
    continued to gain prominence, expressed most recently by Ismail Ahmed, the
    founder of World Remit, who—having been a ‘whistleblower’ in a large corruption
    case against the UN—denounced the model of aid dependency and outlined
    59 Thomas Carothers and Diane de Gramont, Development aid confronts politics: the almost revolution (Washington
    DC: Carnegie Endowment for International Peace, 2013), p. 3.
    60 Author in-person interviews with UK and EU representatives in Hargeisa, Oct. and Nov. 2016.
    61 Author in-person interviews with business actors, Hargeisa and London, Jan. 2017 and Nov. 2018.
    62 ICG, Somaliland, pp. 20–22.
    63 See Silanyo’s speech at a ceremony to lay the foundation stone for a monument to honour SNM struggle at
    Balligubadle (in Somali):, accessed on 8 June 2021.
    64 Linsey McGoey, Darren Thiel and Robin West, ‘Philanthrocapitalism and crimes of the powerful’, In Politix
    121: 1, 2018, pp. 29–54.
    65 For instance, while Sompower, a Dahabshiil majority-owned entity, supplies lights and electricity to police
    stations free of charge, the cost of this provision does not equal the profits they received from tax cuts and
    rapid expansion: J. Meester, A. Uzelac and C. Elder, Transnational capital in Somalia: blue desert strategy, CRU
    report (The Hague: Clingendael Institute, 2019); author in-person interview with Somaliland government
    officials, Hargeisa, Feb. 2019.
    66 ‘False advertising—Somcable chairman lies about his philanthropic activities in Somaliland’, Somaliland
    Chronicle, 8 Nov. 2019,
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    a ten-year plan for Somaliland through the Sahamiye Foundation, pledging $500
    million (£365 million) for health and education.67
    This is important, as the rise of philanthrocapitalism was born in the absence of
    aid and through the revolutionary ideologies of privatized governance. It symbolized
    a creative governance structure not born out of state weakness but also not
    consistent with national, democratic government. It also became a convenient
    narrative through which oligarchic–corporate structures could disguise the ‘true
    agenda’ of elites in power—demanding the protection of business autonomy while
    restricting legitimized central authority and democratization. President Musa
    Bihi’s overt hostility towards domestic capitalists voiced an emerging popular
    opinion about oligarchs as corrupt agents who exploited the population at large.
    This would, however, also raise questions about the foundations of the national
    project. The election of Musa Bihi represented more generally the paradoxical
    ways in which the expanding power of global financial elites confront the violent
    resuscitation of the nation-state.68
    Bihi’s ‘populist’ authoritarianism
    Musa Bihi emerged within Kulmiye as the antidote to Silanyo’s poor leadership
    and economic mismanagement. He was ultimately able to win the presidential
    elections thanks to support from western intelligence and security personnel for
    his anti-terrorist stance, and ‘his accessibility, efficiency, and commitments to
    stability’,69 as well as to popular support for his military capital (having been a
    former liberation fighter) and appeals to order and stability, and for his undeniable
    loyalty to the cause of Somaliland statehood. Musa Bihi cultivated the image
    of a populist authoritarian leader (a man ‘of the people’ because of the role he had
    played as a liberation fighter, and because he was not from the diaspora). His access
    to state and corporate coffers certainly also helped. The main opposition party,
    Waddani, which represented the Garhajis, also faced many challenges including
    poor leadership and lack of originality. Kulmiye had previously pioneered a
    revolutionary narrative of progress and transformation, captivating the diaspora,
    and Waddani struggled to compete with this and also to shake off an image of
    being ‘from the establishment’ and even pro-union.70 Waddani denounced the
    incumbent Kulmiye as the ‘engineers of corruption’ and called for the ‘removal
    of SNM entrenched power’ and the exposure of the ‘deep state’.71 Waddani’s
    chief strategist, Ismail Bubba (also one of the founding fathers of the SNM),
    denounced what he called Somaliland’s ‘democratic militancy’, recharacterizing
    67 Sarah Johnson, ‘Aid agencies can be harmful, says Somaliland tycoon’, Guardian, 9 April 2021, https://www.
    68 Philip G. Cerny and Alex Prichard, ‘The new anarchy: globalisation and fragmentation in world politics’,
    Journal of International Political Theory 13: 3, 2017, pp. 378–94.
    69 Author in-person interview with FCDO official, Hargeisa, Nov. 2017.
    70 Author in-person interviews and participant observation of 2016 election process, Hargeisa, Nov. 2016.
    71 Author in-person interviews with opposition leaders from Waddani and civil society, Hargeisa, 16 and 17 Oct.
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    the quality of Somaliland’s widely acclaimed democracy since independence. As
    he explained:
    For decades being democratic has meant being tied to SNM-type leadership that is based
    on clan imbalance and is militaristic and stagnant. We need to move beyond that, close
    that chapter: Hargeisa is still armed (gun culture is still with us)—we need to establish
    a political leadership that is non-militaristic and progressive. SNM is continuing the old
    war. We cannot have peace with ourselves and progress with that liberation mentality.72
    Waddani’s new national agenda and alternative political project tied to Somaliland
    lawada leeyahay—a charter based on inclusion, social justice, and equitable
    distribution of resources and power—would gain further momentum after the
    2017 elections.73 Yet no one was under the illusion that he would be a democratic
    leader. He was selected in the interests of security and nationalism—both of
    which had come into disarray under Silanyo. Musa Bihi’s ‘imperial presidency’, as
    some have called it, would quickly reconfirm commitments to Somaliland’s role
    as a security protectorate and was even less tolerant of public criticism.
    In a clear display of his vision of state power, at the October 2020 party congress,
    Bihi—flanked by army leaders—refused to relinquish his role as chairman of the
    Kulmiye Party (a position he has held since 2010).74 This also extended to the
    international community, escalating the tone and rhetoric around Somaliland’s
    territorial sovereignty and independence. His numerous press releases and public
    appeals demanded recognition no longer on the basis of injustices, self-determination
    and human rights, nor on progress towards democratization, but now on
    Somaliland’s geostrategic value (its indispensability as an ally in the Red Sea and
    counterterrorism).75 In October 2020, Musa Bihi suspended Somaliland’s relations
    with the United Nations ‘until further notice’ demanding the UN deal with
    Somaliland on its own terms.76 In an unprecedented move he also announced
    that no external funds were to be used to conduct the upcoming municipal and
    parliamentary elections in 2022: the whole amount, he said, was coming from the
    national budget.77
    Like his predecessors, he actively sought external resources, including by
    sending a high-level trade delegation to Malaysia to discuss trade and development
    cooperation, and engaging the Islamic Bank of Thailand and the Islamic Development
    Bank (IsDB). Unlike his predecessor, he was hostile to domestic capitalists.
    72 Author in-person interview with Ismail Bubba, former SNM official and strategist for Waddani, Oct. 2016.
    73 Author phone interviews with the originator of the motto Somaliland lawada leeyahay, Abdikarim Mooge,
    Hargeisa, June 2020; and with Abdirashid Jeeni, one of the authors and signatories of the Baaq-shacab or
    ‘People’s Declaration’,, Dec. 2020.
    74 Author interviews and participant observation, Hargeisa and Mogadishu, Dec. 2020.
    75 Tom Wilson, ‘Somaliland steps up push for international recognition’, Financial Times, 1 November 2018,
    76 The UN was last expunged from Somaliland last in 1993; this occurs under the calculation that the UN will
    continue with its projects. Robert Kluijver, ‘Somaliland suspends relations with the United Nations amidst
    rising tensions’, Democracy in Africa, 20 November 2020.
    77 ‘President Bihi reveals government was bankrolling twin election bill’, MENAFN, 8 Feb. 2021, https://
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    Musa Bihi quickly sought to nationalize public assets under a campaign of state-led
    development, launching a war against the private sector which he saw ‘as having
    worked across borders for decades’, interpreting their unwillingness to pay taxes
    as proof of disloyalty to the Somaliland project.78 He cancelled previous contracts
    awarded under Silanyo, including a 20-year contract concerning ownership of
    the Berbera Oil Terminal (favouring Trafigura) that had allowed six domestic
    companies to import oil jointly.79 Bihi also cancelled Somaliland’s contracts
    with low-cost carriers between Dubai and Hargeisa (Fly Dubai and Air Arabia)
    which were owned and managed by opposition groups.80 One way in which he
    sought to maintain control was by demanding majority shares for himself and his
    associates in companies doing business in the country, including in Dahabshiil’s
    fibre optic initiative.81 Yet many of these initiatives, particularly those perceived
    as overt concessions to the Djiboutian state, were unsuccessful. As the rainbow
    coalition began to fracture, Musa Bihi began to rely even more on external legitimacy,
    most importantly from Djibouti. For instance, Bihi tried (but failed) to
    expand the Djibouti-based conventional bank La Banque pour le Commerce et
    l’Industrie—Mer Rouge (also known as BCIMR, a company in which he holds
    a stake) to challenge the authority of Islamic finance.82 He also ultimately failed
    to extradite from Somaliland to Djibouti one of the most powerful businessmen,
    Ahmed Geele of GSK holdings, whom Djibouti accused of escaping with loans
    and money from BCIMR.83
    The rallying of popular support to protect business autonomy from state intervention
    raises a number of interesting issues about Somaliland’s democratization
    processes and future development trajectories. First, these developments clearly
    demonstrate the fallibility of Musa Bihi’s image of strength and monopolistic
    control over the state, security and territorial boundaries, and the challenges of
    any leader ever mounting an authoritarian project in Somaliland. But they also
    equally strongly emphasize the state’s poor bargaining power vis-à-vis domestic
    firms. Musa Bihi had alienated business interests within his coalition. Second, these
    events also highlight the extent to which questions about the role of the private
    sector and market-led development are deeply embedded in questions about the
    viability of the national project, the authentic legacy of the liberation movement
    and relations with the international system.
    78 Author in-person interviews with officials in Ministry of Finance and Chamber of Commerce, Hargeisa, Nov.
    79 See also ‘Trafigura to invest in improving Berbera Oil Terminal to become a regional supply hub with the
    support of the Government of Somaliland’, press release, 7 Sept. 2020
    80 ‘See Somaliland: politicians accuse President Bihi of sacrificing sound leadership for personal, familial interest’,
    MENAFN, 15 Oct. 2020,
    81 Author phone interviews with The Justice and Welfare Party (Somali: Ururka Caddaalada iyo Daryeelka,
    UCID) party official, May 2021; with Dahabshiil officer, June 2021.
    82 Author phone interview with local activists and ministerial officials, May 2021.
    83 Author phone interviews with businessmen and ministerial officials, June 2020.
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    What next for Somaliland?
    The watershed win for the opposition in the June 2021 parliamentary and municipal
    elections was widely revered as a win for democracy—an image reinforced by
    the fact that Somalia is still unable to hold popular elections—and even more so by
    the fact that Bihi had tried, but failed, to orchestrate election results in his favour.84
    The opposition win in the 2021 election marked a protest vote against incumbency
    and a repudiation of Musa Bihi’s vision of state-led development, and marked a
    renewal of long-stagnant institutions, namely parliament and local councils. Yet,
    the opposition win was also emboldened by the fracturing of the former coalition
    and the realignment of core business interests with the opposition. Bihi (and
    his imperial presidency) had evoked Siad Barre-style militant socialism that had
    been bad for business.85 Waddani’s new national agenda and alternative political
    project tied to Somaliland lawada leeyahay does offer promise.86 But enduring issues
    remain a closed political space (dominated by old SNM-era elites) and key dimensions
    of the oligopolistic state—including the dominance of powerbroker sectors,
    the securitization of aid and the political economy of quasi-recognition. Both
    continue to hinder democratization.
    New partnerships with Taiwan, now Somaliland’s most outspoken critic in
    terms of governance and corruption, could encourage much-needed fiscal and
    political reforms and provide opportunities for building development cooperation
    treaties and mutual defence and banking agreements.87 Yet in the immediate term
    aggressive politicking by Somalia of non-Isaaq communities at the peripheries
    of Somaliland’s statebuilding enterprise, along with Great Power rivalries over
    military bases, hydropolitics and economic free trade zones in the Red Sea and the
    Gulf of Aden, have generated a multitude of issues for Somaliland’s democratization
    process.88 The passing of the free trade zone law in January 2021 by Musa
    Bihi solidified Somaliland’s commitment to becoming a ‘market-dominant small
    jurisdiction’ based on ‘chokepoint’ sovereignty,89 in a bid for independence with
    non-western allies.90 This route does not follow the ‘developmental state’ models
    84 See Human Rights Centre, A quarterly report, April 2021, p. 3.
    85 Author phone interviews with Dahabshiil Bank officers, June 2021. Opposition victories included a mayoral
    seat won by the originator of Somaliland lawada leeyahay, Abdikarim Mooge. See ‘Somaliland elections: opposition
    parties win majority of seats’, Al Jazeera, 6 June 2021,
    86 Author phone interviews with the originator of the motto Somaliland lawada leeyahay, Abdikarim Mooge,
    Hargeisa, June 2020; with Abdirashid Jeeni, one of the authors and signatories of the Baaq-shacab or ‘People’s
    Declaration’, Dec. 2020,,
    87 Taiwan is also a leading player in the region in Islamic finance. See ‘Taiwan and Somaliland risk China’s
    ire with bilateral ties’, Financial Times, 1 July 2020,
    88 Zach Vertin, ‘Red Sea rivalries: the Gulf states are playing a dangerous game in the Horn of Africa’, Foreign
    Affairs, 15 Jan. 2019,
    89 Jatin Dua, ‘Chokepoints and corridors: ordering maritime space in the Western Indian Ocean’, Rift Valley
    Institute Report (Nairobi: Rift Valley Institute and X-Border Local Research Network), 2021.
    90 ‘Somaliland passes law paving way for launch of free trade zone’, Horn Diplomat, 8 Jan. 2021, https://www. Christopher
    M. Bruner, Re-imagining offshore finance: market-dominant small jurisdictions in a globalizing financial world
    (New York: Oxford University Press, 2017).
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    of Ethiopia and Rwanda,91 nor the route of the east Asian tigers of the 1970s and
    1980s, which relied on a smooth transition to more open and inclusive—and hence
    legitimate and stable—political systems. Seminal research has looked at how ‘small
    states’ in Africa and beyond have become some of the best and worst-performing
    democracies. In terms of the latter, many have become attractive tax havens for
    unscrupulous businesses and corporations where the lack of international recognition
    has not eliminated these options for de facto states. While challenges exist
    as Somaliland remains outside the formal financial economy, it offers the added
    advantage of stability, openness and proximity to Gulf allies, compared to other
    de facto tax havens in the region (including Djibouti and Somalia).
    With this perspective, it is not yet clear whether Islamic finance and banking
    will serve as Somaliland’s ticket out of peripheralization, even if it has in the shortterm
    aided political liberalization. What is clear is that Somaliland’s renewal of
    democratization will rely on local momentum as donor concerns remain directed
    elsewhere. This will require larger structural transformation to reduce the power
    of oligarchic–corporate structures—economic diversification (investing in labourintensive
    industries), the regulation of business and campaign finance, and state
    commitments to the provision of public services.
    This study of Somaliland’s political economy since independence challenges core
    arguments about the country’s democratic successes. Using theories of ‘oligopolistic
    state’ and ‘peaceocracy’, it presents key arguments about how structures of
    oligarchic–corporate power have limited democratization. The holding of routine
    elections without extending broader rights and public services has not generated a
    thriving democracy in the absence of progressive leadership. Rather, an oligopolistic
    state has formed around an exclusive statebuilding agenda that serves the
    interests of a select group of financial and political elites who represent the Isaaq
    clan. A critical political economy lens emphasizes the key challenges faced by
    Somaliland, along with other de facto states, in balancing financial hardship and
    political control and in designing development models. These financial troubles
    may place these states at the mercy of patron states and oligarchic–corporate structures
    in ways that affect political development and have been under-researched to
    date. As such, this article establishes an important comparative research agenda
    for examining de facto states’ political economies as they affect elite strategy and
    uneven and uncertain development trajectories, and makes a number of contributions
    to the study of Somaliland. First, it provides an account of how business–
    state relationships may develop in contexts of financial hardship and de facto
    statehood. It demonstrates how oligarchic–corporate systems and ideologies of
    privatized governance may emerge as forms of post-colonial market-building.
    Second, this article shows how quasi-recognition (special relationships and the
    91 Stephen Brown and Jonathan Fisher, ‘Aid donors, democracy and the developmental state in Ethiopia’, Democratization
    27: 2, 2020, pp. 185–203.
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    securitization of aid without necessary contributions to institution-building) can
    empower oligopolistic state systems and erode national, democratic government.
    This occurs by empowering the security apparatus and oligarchic–corporate structures
    that benefit from these rents. Third, it details how conflicts play out between
    traditional forces and global financial elites around the hollowing out of the state
    by privatization and around the viability of the nation-state.
    Somalilanders’ ambitions for democratization have for decades greatly suffered
    under the oligopolistic state and peaceocracy—a reality that has not been
    adequately captured by prevailing discourses and narratives on Somaliland to date.
    This oversight is due at least in part to a culture of silence that has pervaded the
    study of Somaliland—produced both by donors keen to justify and protect their
    security and strategic interests, and by the Somaliland state itself rallying behind a
    duty of collective national interests to protecting prospects for recognition. This
    article has sought to start the process of unveiling some of the dynamics that have
    safeguarded private sector actors and public authorities and created a culture of
    impunity, undermining democratization. It has also highlighted the importance
    of developing more flexible tools and frameworks in which to understand the
    uneven and uncertain development paths of de facto states. The challenge for
    Somaliland’s viability now is how to reconcile foundational elements that include
    business autonomy and market development with democratic principles.
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