Gulf states crisis spillover intensifies for Somalia

Significance Emirati trainers had already been withdrawn from the base amid an escalating row between Abu Dhabi and Mogadishu, which has intensified since the announcement on March 1 that Ethiopia would take a 19% stake in the UAE state-run DP World development of Berbera port in Somaliland. The port deal has brought the Emirati role in Somalia’s political economy into the spotlight, with important spillover for politics within the Federal Government of Somalia (FGS), as well as the federal member states (FMS). Impacts Although this is a setback in its approach to Somalia, the UAE will not dramatically alter its overall posture towards the Horn of Africa. Turkey may benefit most in terms of access and influence, as well as logistics and reconstruction contracts for Turkish companies. Other external actors may take note of the precarious nature of deals in Somalia, especially given corrupt tendering practices.

Subject Prospects for the Gulf of Aden and Red Sea in 2018-22. Significance Rooted in centuries of common history and cultural exchanges, links between the Gulf states and the Horn of Africa have intensified in the decade since the global financial crisis of 2008-09, creating new dynamics across the Gulf of Aden. In the years ahead, deepening trade and investment in agriculture, livestock and infrastructure -- in particular -- are likely to underpin an ever-more-complex web of political and military relationships, with fracturing lines of alliance and enmity shaped by security issues.


Significance The United Arab Emirates (UAE) economy is increasingly diversified, not least with the imposition of VAT since January 1 -- albeit at a low initial level of 5%. Fiscal transparency has not necessarily kept pace, especially in ad hoc financial support both among the emirates and externally to Gulf neighbours. Impacts Any reduction in financial support from Abu Dhabi through GCC funds might endanger Bahrain’s currency peg. Increased clarity on UAE commitments could help to stabilise weaker economies in Bahrain and Oman. The federal government is likely to convert its current deficit to a surplus of around 2% in 2018. Fiscal reforms and innovations will not challenge Abu Dhabi’s financial dominance among the seven emirates. Plans to privatise state-owned firms will create further pressure to boost transparency.


Significance The wealthier Gulf states have become increasingly active in nearby countries over the past decade. They have intervened significantly across the Middle East and Horn of Africa, using a mixture of economic, diplomatic and military power, sometimes seeking to fill gaps left by Washington’s partial withdrawal from the region. Impacts Companies risk getting caught out if their operations span the Gulf and include a country that falls out of favour in regional politics. Bilateral relations bolstered by government interventions may encourage new investments. Regional interventions by Gulf states risk harming relationships with major global powers.


Significance The move risks further exacerbating poor relations with Somalia. The UAE has a long-term commercial interest in the Somaliland port of Berbera, previously planned to include military facilities. However, the nature of Emirati engagement in the Horn of Africa is changing, as also reflected in the partial dismantling of the military base at Assab in Eritrea. Impacts The success of the UAE’s vaccination programme opens space for the export of vaccines to regional states to enhance its soft power. Emirati assets in the region may prove vulnerable to attacks by groups opposed to the UAE’s campaign against political Islam. In the post-Trump era, coercion of other regional countries to join the ‘Abraham Accords’ with Israel will be deprioritised.


Subject Outlook for Somalia's political transition. Significance Leaders of the federal government and member states will meet on January 10 in Kismayo to finalise the framework for the August-September 2016 political transition. This will involve state-level electoral colleges selecting parliamentarians based on clan and constituency-based representation, rather than direct elections. Impacts Any transition in 2016 would fulfil a key donor requirement and mark a break with the politics of the 2004-12 period. Insecurity will challenge the transition, as the political turmoil in Burundi threatens further strain on AMISOM coherence and troop levels. Donor backing for AMISOM is set to shift, with the EU reducing its support by 20% from January.


Significance The ‘Abraham Accords’ have secured the United Arab Emirates (UAE) bipartisan political support in Washington, but also feed into the growing regional ‘cold war’ between the UAE and Turkey in theatres stretching from the Horn of Africa into the Eastern Mediterranean. Impacts The Emirati example might spur Saudi efforts to take measures to placate a possible incoming Biden administration, regarding Yemen or Qatar. Economic dependence will constrain business-focused Dubai from pressing Abu Dhabi for a less confrontational approach on Tehran and Doha. The UAE would face regional political pushback if Israel resumes its ‘frozen’ plan to annex areas of the West Bank.


Significance Some Gulf states have targeted the development of an indigenous arms industry as part of their economic diversification efforts. Impacts Abu Dhabi has the best prospects for growth and development in the defence sector. UAE arms exports will increase, but products may remain at the lower end of the technological spectrum for some time. Riyadh’s joint venture push will create local manufacturing jobs, mainly in assembly and maintenance. Qatar will pursue a separate track, viewing arms purchases as a diplomatic tool.


Subject Outlook for Mauritania's ties with the UAE and Saudi Arabia. Significance President Mohamed Ould Ghazouani has recently sought to reaffirm the strong partnerships with Saudi Arabia and the United Arab Emirates (UAE) that were cultivated by his predecessor, Mohamed Ould Abdel Aziz, even as he pursues a markedly more liberal approach to domestic political affairs. Prominent exiles were allowed to return home earlier this month. This raises an apparent contradiction, given the two Gulf states’ endorsement of Ould Abdel Aziz and his repressive internal policies. Impacts Riyadh and Abu Dhabi will remain key sources of financial support for Nouakchott. A 2-billion-dollar aid package from the UAE will likely be disbursed over many months or perhaps several years. As the new chair of the G5 Sahel, Ould Ghazouani will seek to sustain hitherto inconsistent Emirati and Saudi support for the bloc.


Significance The decision follows weeks of unrest in the Ethiopian Somali National Regional State (ESNRS), capped by the August 6 resignation of regional President Abdi Mahmoud Omar ‘Iley’, two days after federal forces took control of the regional capital, Jijiga. Abdi Iley has been at the centre of the ESNRS political economy for a decade, and his removal poses major risks for Prime Minister Abiy Ahmed’s federal government. Impacts The Liyu police will likely be retained as an integral element of Ethiopia’s regional security strategy. Hydrocarbons production, currently at an early stage, will proceed slowly due to security concerns. Somaliland could suffer spillover, especially from disruption to trade, as well as from refugee influxes.


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