Africa: The EU-US Security-Economy Nexus

EU-ISS Alert, co-authored with Cristina Barrios.

Africa has come to rank high on the US and EU agendas this summer. After the EU hosted its fourth EU-Africa meeting on 2-3 April, US President Barack Obama is preparing his first ‘US-Africa Leaders Summit’ for 4-6 August. Meanwhile, French President François Hollande is visiting the Côte d’Ivoire, Niger, and Chad this very weekend. His tour comes only days after France announced its decision to replace ‘Operation Serval’, undertaken in response to the military offensive of radical Islamists in Mali in early 2013, with a wider counter-terrorism operation codenamed ‘Barkhane’. Other EU member states are also redefining their engagement with Africa: Germany, to name one, is seeking closer military cooperation with France in the Central African Republic and is in the process of elaborating a new Africa strategy.

What emerges from this renewed attention towards the continent is that both the US and the EU have subscribed to a two-pronged approach encompassing a focus on security and economic cooperation. Thereby, they converge on a specific understanding of both security and economic aspects. While security is largely framed as countering violent extremism, economic cooperation has primarily come to be seen through a trade lens. However, such confined conceptualizations of security and economic development are problematic. For one, restricting security to military operations in general – and counter-terrorism activities more specifically – risks hobbling ongoing efforts in support of democratic governance and state-building, as a recent study of the Life and Peace institute has shown for the case of Somalia. For another, although trade carries the potential of fostering economic development, this is not a foregone conclusion.

This Alert examines how both the US and the EU have subscribed to a renewed attention on a narrowly defined security-economy nexus. It argues that past international engagements in the Horn of Africa, the Sahel, and elsewhere have, however, shown that a broader understanding of security is needed, if the challenges emanating from both extremism and underdevelopment are to be tackled effectively and sustainably. Similarly, it proposes that trade is not the ‘silver bullet’ to eradicate poverty, but that it needs to be accompanied by social investments and redistribution policies. At its most basic, the alert postulates that both African crises and opportunities can only be seized to the benefit of all involved, if a narrow focus on security and trade is expanded to include the strengthening of governance mechanisms and build-up of effective states.

To access the alert, please click here.


Somalia: Heading from Fragility to Fragmentation?

first published by AfricanArguments, 26 Jun 2014

Somalia has achieved important progress since the onset of the year of 2014. Most prominent among the positive developments is the push-back of al-Shabaab, realised by a joint military offensive of the Somali Armed Forces (SAF) and African Union Mission in Somalia (AMISOM). While security remains precarious, the territorial gains have provided the Federal Government of Somalia (FGS) with an oppor­tunity to extend its administrative reach – a crucial precondition for its long-term state­-building project and endeavour to hold country-wide elections by 2016.

However, it remains questionable whether the govern­ment of Prime Minister Abdiweli Sheikh Ahmed will succeed in reaping sufficient benefits in order to be able to propel the country’s state-building process. Although advances against the terrorist organisation are crucial, the fight against al-Shabaab constitutes only part of the equation. Another basic element lies in the process of erecting functional structures of governance in the context of Somalia’s federal agenda. Yet, recent quarrels at the sub-national level raise the fear that Somalia may be heading from fragility to fragmentation.

The EU-ISS policy brief ‘Somalia’s federal agenda: From fragility to fragmentation?’ takes a closer look at this proposition. The paper critically assesses the recent trajectory the country has embarked upon, putting a particular focus on Somalia’s federalism process and its implications for the state’s endeavour to establish lasting peace and stability. The paper shows that the political ‘transition’ that Somalia officially terminated with the formation of the FGS in September 2012 is in full swing, and that this process carries centrifugal tendencies that risk renewed conflict.

A key challenge Somalia faces lies in the ad-hoc nature of the process that underpins the formation of federal member states. While the evolution of regional tensions had to be expected, the resulting tug-of-war among Somali actors has hampered political progress. It also led to increased factionalism, propelling local tensions and clan-related cleavages. Somalia’s history provides ample evidence of the dangers this trajectory entails. Apart from compromising the state-building progress achieved to date, increased fragmentation could also lead to a reinvigoration of al-Shabaab, which has always been effective in exploiting local grievances and national disunity.

In order to prevent Somalia from sliding from fragility to fragmentation, the policy brief proposes that Somalia’s international partners may contemplate strengthening the central administration vis-à-vis the federal member states and supporting a just process by which federal polities are established. In part, this could be done by helping the FGS to institutionalise the process that underpins the formation of federal member states, and bolstering the Boundaries and Federation Commission that the Provisional Constitution tasked the FGS to create. This could be achieved by making it clear that international development funding to regional administrations will hinge on their prior approval by the FGS.

Moreover, the international community needs to ensure that its support towards Somalia’s national process of federalisation does not fuel internal conflict. One possibility lies in adopting a flexible process that provides the FGS with sufficient room for political manoeuvre, and hands ownership over the state-making process to the Somali people. Consequently, all donors should strongly adhere to the Somali Compact, as it continues to be the most suitable framework to assist the FGS in rebuilding basic and durable state functions. Even though the Somali Compact is not the silver bullet that will turn the long-time ‘failed state’ of Somalia into a stellar democracy, its principle tenets constitute an important step in reconstructing Somalia – not least by coordinating its international supporters.

More challenging, but of even greater importance, is the unification of the Somali people. For its part, the EU, in addition to its already significant contribution to the country’s security sector, might also consider the possibility of providing support for the establishment and the promotion of national political parties. Genuine political parties with convincing party programmes and an active followership that extends beyond a handful of Mogadishu-based politicians could prove to be valuable vehicles in attempts to transcend the sub-national purview of political entities, overcome age-old clan-based disputes, and provide viable platforms for national dialogue. Ultimately, a democratic trajectory for Somalia will be hard to achieve in the absence of both a unified national constituency and genuine political parties.

Not entirely unexpectedly, the advancement of Somalia’s federal agenda has proved to be a contentious process. The resulting fragmentation it has experienced, particularly in recent months, risks perpetuating and even exacerbating its fragility. In order to move forward constructively and overcome political instability, the country needs to start building institutions and identities that span regional and clan divides. Only then will Somalia stand a chance of achieving the ‘Vision 2016’ that the FGS devised last September.

Somalia’s hydrocarbon potential: Oiling or spoiling its future?

first published by AfricanArguments, 09 Jun 2014

Constituting the petroleum sector’s latest ‘frontier region’, Somalia constitutes not only one of the most promising, but also most challenging potential oil exporting countries. Whereas international enterprises face risks with regards to political fragility, legal ambiguity, and physical insecurity, Somalia looks down the barrel of the negative political, economic, and social effects of the ‘resource curse’. Moreover, the country also has to confront a variety of additional challenges that are certain to arise from oil exploration and production in the context of its nascent state-making endeavour. One key risk is that the development of its petroleum resources is likely to catalyse an already tense situation, enhancing the danger for violent conflict in the war-ravaged country. In order to oil rather than spoil ongoing processes of state-making and development in Somalia, all stakeholders involved need to exercise utmost caution in further developing Somalia’s hydrocarbon potential.

The recent resource bonanza in East Africa has not stopped at the borders of one of the most fragile states in the world. Instead, Somalia finds itself canvassed by a range of international oil and gas companies, which are attracted by the large profit margins that accrue from developing the fragile country’s hydrocarbon potential. Ever since the first well in Somali soil was drilled by Sinclair in 1945, a total of about seventy wells have been sunk in Somalia. After major oil companies had declared force majeure and abandoned the country in the years surrounding the end of the Cold War, newcomers have embarked on exploring the country’s hydrocarbon potential in recent years. Although information about Somalia’s fossil fuel endowments remain scant, they are estimated to be as high as 110 billion barrels, putting the state at the Horn of Africa at eye-level with Kuwait.

Consequently, stakes are high and the development of its natural resources holds significant potential for Somalia. To be sure, the geological formations that show striking parallels to those of oil-rich Yemen across the Red Sea, provide an opportunity to lift the destitute Somali nation above a per capita GDP of about USD 112 (current US Dollars; see UN Data). Yet, such a positive trajectory is by no means assured, as the development of Somalia’s hydrocarbon resources faces a host of serious challenges that could not only jeopardize the country’s oil production, but its very state-making. One challenge lies in the ‘resource curse’, others in the political competition among Somali stakeholders as well as legal ambiguities. Hence, the central question is whether and how the country’s natural endowments can be developed in a way that bolsters rather than thwarts its progress towards peace and development.

A recent policy brief entitled “Oil in Somalia – Adding Fuel to the Fire?” published by the Heritage Institute for Policy Studies in Mogadishu aims to address this question. Although the conundrum whether Somalia’s hydrocarbon endowments will ultimately be a boon or bane for its trajectory hinges on a multitude of variables and evades simple projection, the paper cautions against a ‘business as usual’ approach. Shedding some light on Somalia’s political, legal, economic, as well as social conditions, and assessing their preparedness to cope with the shocks and challenges that will accompany the development of hydrocarbon endowments, the policy brief points towards some of the central obstacles Somalia faces with regards to the development of its natural resource wealth. At its heart, the report argues that Somalia is ill-prepared to embrace the challenges posed by the extraction of oil, and that major progress in the political, technical, and administrative spheres needs to be made, if hydrocarbon production is to oil rather than spoil the country’s future.

Somalia: Challenged by Oil Production

One key challenge the production of oil and gas holds for Somalia lies in the economic realm. As is the case for many other developing countries, Somalia faces the risk of the ‘resource curse’. Yet, in the Somali context the challenges accruing from this phenomenon are exacerbated due to the extraordinary infancy of the country’s formal institutions and legal framework. Moreover, Somalia’s administration remains feeble and lacks a well-trained cadre of technocrats to appropriately deal with oil production and revenue management. And in the absence of a sizeable non-hydrocarbon economy, the country is unlikely to beneficially counter the adverse effects of the ‘Dutch disease’, which results in wage increases across the economy that hits tradable sectors such as agriculture and manufacturing particularly hard. Thus, from the perspective of economic development, the production of oil and gas seems to constitute a real danger for Somalia.

Another central defiance – and one that is more particular to the case of Somalia – lies in the socio-political sphere. Prospects for hydrocarbon discoveries have spurred a ‘resource race’ in which different political actors have started to carve up oil blocks in order to enhance their politico-economic bargaining power vis-à-vis political competitors. Consequently, this race for oil is likely to catalyse both existing and burgeoning rifts and political tensions at the sub-national level – particularly in an environment in which demands for federal state structures have gained momentum, and one which remains marred by significant legal ambiguities. The border clashes between security forces from Puntland and Somaliland in eastern Sanaag Region in April 2014 could prove to be but a first taster of the significant tensions and violent contestation that come in tandem with the exploration and production of Somalia’s hydrocarbon wealth.

But there are further obstacles to the beneficent development of Somalia’s natural resources that the report identifies. For one, hydrocarbon prospects are likely to attract the attention of other states, whose interest might not be well aligned with Somalia’s state-making endeavour. Kenya’s interest in Somalia’s oil resources appears to have been a key driver behind Nairobi’s 2011 decision to militarily intervene in Somalia, and the US government demanded its Somali counterpart to recognize the rights of US oil companies that had declared force majeure when the regime of dictator Mohammed Siyad Barre crumbled in 1991, prior to extending recognition in 2013. For another, the development of Somalia’s hydrocarbon endowments may also spark local tensions and undermine the Somali government’s endeavour to facilitate reconciliation at the local level. Finally, the study highlights the significant legal challenges and lack of clear constitutional framework, which might result in entrenched conflict among leaders of different political entities within Somalia.

Addressing the Defiance

In light of such challenges, the report concludes that it appears that oil exploration and production is likely to exacerbate an already difficult process of forging a functioning elite bargain and setting up transparent and reliable institutions in order to advance the country’s state-making endeavour. Consequently, the paper urges all actors involved in the process of hydrocarbon development to exercise a great deal of caution, in order to avoid adding fuel to the fire. More concretely, some of the recommendations voiced are:

First, the Federal Government of Somalia needs to address existing legal ambiguities and political points of contention. For one, Somali legislators should revise the country’s legislation that regulates the exploitation of natural resources. For another, the FGS must find a politically viable and binding solution to the question of who has the right to enter into – and the responsibility to honour – contracts with oil companies. Moreover, Somalia must investigate how to best acquire and sustain technical expertise and administrative capacity in order to effectively negotiate and manage oil agreements with international companies.

Second, Somali authorities, assisted by its international partners and oil production companies, should devise a strategy to actively manage public expectations emerging in relation to natural resource exploitation. Possibly, an interstate commission on natural resources could take on this task. By acting as a knowledge platform and drawing on experiences from other oil-producing countries with federal state structures, such a commission could also mediate among different levels of government and advise them on how to best move forward.

Third, international oil production companies need to take great caution not to upset the little progress towards state-making and development that Somalia has achieved throughout the recent past. Apart from strictly abiding to Somalia’s national laws, international companies should await the conclusion of political and legislative proceedings at the part of Somali authorities, before production initiatives forward. Concurrently, the international donor should consider investing much more strongly into the establishment of a productive economy in Somalia, and explore possibilities of using aid funds in such ways as to smoothen out volatile government budgets that are certain to fluctuate if Somalia becomes increasingly dependent on oil revenues.

For Somalia, the road towards the development of its hydrocarbon potential is winding and full of challenges. The country’s fragile political situation, weak institutions, legal immaturity, and host of further obstacles raise doubts as to whether it is well-prepared to embrace the obstacles that come with hydrocarbon development. In order not to add fuel to the fire, but to make greatest use of the country’s hydrocarbon potential, a great deal of caution is required from all parties involved. Only if oil exploitation is seen as a means to the end of establishing a viable state, rather than an end in itself, can Somalia’s hydrocarbon endowments possibly oil rather than spoil its future trajectory.


‘Failed States’ and ‘Failed Policies’: Two Global Public Policy Challenges at Eye Height

first published by global policy, 25 Jan 2013

‘State fragility’, with its repercussions on national development and international security, re­mains one of today’s most pressing global public policy challenges, partly because this phe­no­menon is considered “the source of many of the world’s most serious pro­blems” (Fukuyama 2004:1). The topic’s centrality is reflected by the OECD’s Development Assistance Committee agenda, was pivot to the 2011 World Development Report, and has been evi­denced by long-drawn international engagements in Bosnia and Kosovo, Iraq and Afgha­nis­tan. Yet, while foreign military contingents have incrementally left these war zones, ‘state fragility’ is cer­tain to stay, both, in these polities and the world at large. One central reason is that, “[f]rom a his­to­rical perspective, much of the developing world today is characterised by states in the pro­cess of formation” (CSRC 2005:2), a process that is inherently prone to cri­ses, conflict and fragility.

Whereas ‘fragile states’ pose a central challenge to the ‘international community’, the latter’s failing policies constitute a vital defiance to the respective states and their popula­tions. This is not only because current approaches to state-building are heavily militarized, but also because they utterly fail to bring about the envisioned stability and prosperity. International military engagement in Iraq has left its society with a significantly diminished GDP per capita (UNDP 2012), and Afghanistan is not only far from having reached acceptable levels of security and resilience despite an ‘investment’ of approximately USD 2.5 trillion by the US federal govern­­ment alone (Costs of War 2012), but also continues to have the highest infant mortality rate in the world (Global Health Facts). Similarly bleak is the international community’s state-building record in polities such as DR Congo, Sudan and Somalia, as these countries not only remain a far cry from achie­ving the MDGs, but continue to feature amongst the top ten ‘failed states’.

Getting ‘Failed States’ Wrong

Consequently, the state-building policies pursued by the ‘international community’ can con­fi­dently be judged as being ineffective at best. While a myriad of factors can be cited to ac­count for why Western policies towards ‘failed states’ have themselves largely failed, I argue here that the central underlying problem is not a practical but conceptual one. ‘Fragile states’ have usually been conceived of as pathologic deviations from the contemporary moulding of Western states with their free market economies and liberal democracies. Hence, it have invariably been neo-liberal interpretations of the state that have guided the inter­national community’s handbooks on how to supposedly ‘fix’ fragile states (Ghani/Lock­hart 2008; Kaplan 2008), even though “[t]he inadequacies of neo-liberalism have spawned a wide­spread questioning of this dominant worldview” (Sandbrook 2010). While the Washing­ton Consen­sus, which had seen the state as an obstacle to development, has offi­cially been abandoned, the underlying paradigm has largely remained intact (Stiglitz 2004).

Although the Post-Washington Consensus witnessed an apparent volte-face to main­stream thinking of the 1980s and 1990s in that policymakers ultimately realized the need for ‘Bring­ing the State Back In’ (Evans et al. 1985), the state is still not taken seriously as a vital partner in development and state-building processes. This is evidenced by the latest con­cep­tual varia­tion of the neo-liberal ideology that emerged in the scholarly literature as the post-2001 decade drew to a close. Concepts of ‘twilight institutions’ (Lund 2006), the ‘negotiated state’ (Menk­haus 2007) and ‘hybrid political orders’ (Böge et al. 2008) have come to praise earlier negative interpre­ta­tions of non-state orders (e.g. Jackson 1990; Zartman 1995; Rotberg 2003) as au­toch­thonous ways of state-building. Whereas it is true that ‘fragile states’ are marked by a competing plu­ra­lity of different actors, the concepts’ underlying proposition that a hybridity of ‘political orders’ is desirable for the advancement of developing states is highly problematic.

Inadequacies of Current Conceptualizations

First, the promotion of pluralism as constituting both the means and ends of state-building can only be sustained by a form of historical amnesia. While the advertisement of pluralism sits well with the deeply engrained ‘diversity myth’ that the West entertains regarding its own history, Schwartz (1995) shows that ‘Americanization’ had been “a process of coercive conformity” and that the United States “was characterized by ethnic dominance, not ethnic pluralism.” Hence, while Americans preach an adherence to liberal pluralism throughout the world, their own state and national unity was not founded on pluralism, diversity and tole­rance, but homogeneity, conformity and dominance. That it is processes of unification and standardization that have constituted the lynchpins of state-building throughout history has similarly been argued by intellectuals ranging from social contract theorists of the 17th centu­ry to contemporary scholars such as Anderson (1983), Connor (1994), and Levene (2000).

Second, also when viewed from a theoretical perspective, the unapologetic advancement of pluralism in contexts of fragility appears to be much more of a ‘tragic’ than ‘magic bullet’. Regarded through the analytical prism of institutionalism, neo-pluralist concepts, which em­pha­size problems of allocation rather than ones of rule and control (Nordlinger 1981; Lind­blom 1977), can be debunked as asserting a situation of ‘institutional multiplicity’. Al­though a diversity of ‘rules of the game’ (North 1990) can be desirable or even necessary to keep states functional in the long-term – partly because it offers “the possibility of switching stra­te­gically from one institutional universe to another” (CSRC 2005:8; North 2005:42) – the parallel existence of institutions is problematic in early stages of state development, as it defies the larger purpose of institutions themselves, namely to “reduce uncertainty by provi­ding a [clear] structure to everyday life” (North 1990:3).

Third, the neo-pluralist concepts remain wholly inconclusive regarding the question under what conditions or what kinds of ‘hybrid political orders’ are constitutive of rather than inimical to state-building – where runs the line between ‘good’ and ‘bad’, ‘too little’ and ‘too much’ hybridity? Unable to answer these questions, the concepts are little helpful to under­stand, for example, the divergent trajectories of Somalia and Somaliland, both of which are marked by a hybridity of ‘political orders’. Moreover, just like previous approaches, this allegedly new thinking similarly reduces state-building endeavours to questions of institu­tional capacity. Yet, as “[g]overnance is about the relationship between the state and socie­ty” (Brinkerhoff 2007:18), and as “it is in the realm of ideas and sentiments that the fate of states is primarily determined” (Holsti 1996:84), I argue in a manner analogous to the dictum of Evans et al. (1985) on the state, for the need of ‘bringing the nation back in’ (Helling 2009).

What Next?

Despite the failure of the international community’s past policies towards ‘failed states’ there are no indications that global policy towards state fragility is about to change. Even after the failed state-building interventions in Afghanistan and Iraq, a para­digmatic shift in conceptual thinking about ‘fragile states’ and possible international responses does not appear to take shape. NATO’s military operation in Libya and France’s most recent single-handedly intervention in Mali are proof of the West’s apparent immunity to learn from past mistakes. Just as has been the case in Afghanistan and Iraq, the military engagement in Mali is more likely to contribute to a further political fragmentation and institu­tional ‘fragilization’ than to bring about peace, prosperity and stability – parti­cularly as France’s current policies are not suggestive of going beyond a few military objectives.

Yet, in the absence of a more comprehensive and politically defined long-term strategy of how to assist polities such as Mali in achieving a transition from fragility to resilience, the international community is more likely than not to continue defaulting to its plan A, marked by a largely military and technical approach in the framework of the neo-liberal paradigm – a plan that already failed (in) Afghanistan and Iraq. If the international community is, however, truly concerned with facilitating stability and development in ‘fragile states’, it needs to thoroughly rethink its conceptualization of states-in-the-making and seriously scrutinize its approach of liberal pluralism. Only if the dominant (Western) actors appreciate that what is required to sustain states should not be confused with what is required to initiate them, can the international community adequately deal with the challenges arising in and from fragile states, and help prevent a country like Mali from becoming another Somalia.

Dominik Balthasar is a fellow of the GG2022 program and a post-doctoral fellow at the Royal Institute of International Affairs (Chatham House) in the framework of the Transatlantic Post-Doc Fellowship for International Relations and Security (TAPIR). This column is part of a series from the GG2022 fellows. For more information on the GG2022 please see here.


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