East Africa is being hailed as the last great unexplored oilfield (although the Arctic and Antarctic zones may one day trump that claim). The finds, alleged and actual, stretch from Madagascar, through Tanzania, Uganda, Kenya, into Somalia (particularly Puntland), Somaliland and through to Ethiopia. Estimates suggest that Somalia's offshore oil and gas fields could contain 110 billion barrels – more than Kuwait's fields, potentially making the area the fifth largest global producer. Optimism over the extent of deposits is not universal though: some commentators have questioned whether oil deposits are in fact significant at all (for example, Brower 2009). In addition, some technical questions remain unanswered, including the type of oil – light oil with low density and low sulphur being the industry preference, as it costs less to transport and refine – while major political, security and environmental issues also persist.
Recent hydrocarbon discoveries both on- and offshore add a further twist to an already complex situation – one that is frequently misunderstood by outsiders. Piracy, terrorism, militant political Islamism, state collapse, warlordism, assassination of journalists and human rights activists, patriarchal practices, and continuing humanitarian, refugee and internal displacement (IDP) crises are all commonly taken to characterise Somalia. As it is, the area has been described as one of the worst places in which to be a child, while many commentators note severe deficiencies in human rights, unbalanced economic development and, historically, an excess of external political and social interference (Human Rights Watch 2012). There are fears that oil, conflicts over its revenues, and the insecurity and instability that exploitation could bring, will exacerbate this situation.
These fears extend to the corruption associated with the resource curse or ‘Dutch disease’. This model suggests that increasing exploitation of natural resources pushes prices higher within the sector, raising both the cost of living and the cost of doing non-oil business. Consequently, rapid fiscal expansion associated with natural resource exploitation leads to a decline in manufacturing and other sectors. The original case for this pattern was observed in the Netherlands, where rapidly increasing natural resource revenues strengthened the currency, pushing prices for the nation's other exports to uncompetitive levels, thus reducing profitability and discouraging investment outside the extractive sector. Generally speaking, while the problem mostly refers to natural resource extraction, it can refer to any development leading to a large inflow of foreign currency, including a sharp surge in natural resource prices, foreign assistance, and highly targeted foreign direct investment. In essence a rentier political class lives off the proceeds within clientelist networks, with production declining and higher costs being transmitted to the population as a whole – the latter remaining underdeveloped with the benefits going to transnational companies and a comprador elite. Nigeria and Angola offer vivid illustration of that principle, though they might also be contrasted with more positive examples, including Norway, Ghana, and, to some extent, Venezuela.
There are, of course, far more shades to this picture than are allowed by many commentators. The Somali situation itself needs to be viewed using a more nuanced understanding of reality. While widespread assumptions typically embrace the view presented above, the situation in fact differs markedly through the region. Somaliland, and to a lesser extent, Puntland have enjoyed extended periods of relative stability. While governance throughout the region remains weak, there are viable governments in place in those territories, with Somaliland in particular making progress in building genuine state capacity. Indeed, some parts of the typical Somali stereotype are untrue even in the south. Many aspects of the business environment have survived, even thrived, in a situation in which state control is minimal. And, while infrastructure throughout the Somali Horn of Africa is woefully inadequate – as much in Somaliland as elsewhere – and educational and health services are insufficient to meet the most minimal requirements, the picture of endless chaos and humanitarian disaster is incorrect.
The global situation is also pertinent in any analysis of oil extraction. There has been substantial diversification on both the supply and demand sides in the extractive industries. The rising economies of China and India and other so-called BRICS economies are boosting global energy demand, while diminishing reserves in many long-established fields, and accompanying rising prices are forcing a shift in focus to extraction from less stable areas in which political tensions are higher and state capacity lower than has traditionally been the case. Extractive industries in many areas have consequently seen a marked increase in both the privatisation and militarisation of energy security. In the Somali case, this trend is apparent, with private-sector firms such as the United Kingdom (UK)-based Sterling Corporate Services (SCS, previously called Saracen International), who are particularly active in Puntland, providing security for exploration and many other functions that would normally be the preserve of the state. It is noteworthy that SCS were originally brought in to run an antipiracy programme, before their contract was unilaterally cancelled by Somalia's Transitional Federal Government (TFG) speaker, Sharif Hassan Sheikh Aden, who preferred other international, private-sector security firms (Pelton 2012). Indeed, the increasing number of private security firms operating in Somalia belie statements such as that of Puntland Petroleum Director, Issa Mohamud Farah ‘Dhollowa’, who claimed Puntland ‘would not accept [foreign] security in our country’ (MJ and Omar 2012).
Small, speculative exploration companies play an important role in the changing Somali situation. Australian, South African and Canadian companies are currently involved in exploration for Somali hydrocarbons, with Turkish interest also evident. In the medium to long term, it is probable that the major companies – ConocoPhillips, Amoco, Chevron – will start to invest in the Somali fields, probably through buyouts of the smaller companies who have pioneered recent exploration in the region.
Internationally, much of the debate around ‘big oil’ has assumed a technical and environmental focus, asking whether we are now past the point known as ‘peak oil’, and faced with declining production. Arguments on this vary, driven by differing estimates as to how much oil can profitably be extracted. Some suggest that the point of ‘peak production’ was reached in 2008. Others suggest that improving extractive technologies and the discovery of new fields pushes that date back by up to 20 years. It is clear, though, that new discoveries alone will not achieve dramatic extensions to peak estimates. Oil companies and others are consequently very aware that they can no longer rely on traditional low-cost energy sources. In the long term, and in the best case, this would bring a sustained but steady rise in prices. It is quite likely, though, that energy markets will instead see considerable price volatility, albeit still following a general upward trajectory.
The debate is also joined by those who argue that a substantial reduction in oil consumption must precede peak oil in an effort to avoid ‘climate chaos’. A parallel trend has seen the burgeoning of conspiracy-based rhetoric that holds the reductionist view that ‘everything is an oil war’. In the early part of last decade it was thought that United States (US) wars for oil were at least in part intended to retain the dollar hegemony in the oil trade (transactions have long been denominated in dollars). A number of oil-producing and exporting countries announced a shift to the euro as the currency of oil exchange (for example, Saddam's Iraq and Venezuela), while others threatened to do so (for example, Iran). This denominational consensus was described by William Clark when he noted that the ‘recycling of petro-dollars is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973’ (Clark 2004).
John Bellamy Foster suggested four reasons for the strategic energy initiatives launched in the United States from 1998:
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the crossing of the ‘50% threshold’ which saw the US importing more than half of its oil requirements;
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the ‘disappearance’ of spare world oil production capacity;
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the increasing importance of the Persian Gulf; and
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calculations that oil production was past its peak (Foster 2008).
In line with environmental arguments, it is certainly true that production has peaked in UK and Norwegian oil and gas fields, but these are minor reserves by world standards (Stigset 2011). It was predictions that Saudi oil would soon reach peak production that were far more worrying from US and European strategic perspectives. An associated concern was the relative decline in the share of the extractive market controlled by the multinational oil companies as a result of the rise of ‘resource nationalist’ oil companies and governments such as those in power in Iran and Venezuela. By some estimates, the share of extraction directly controlled by the major companies dropped as low as 10% of the total. Some argued that this decline in direct commercial control of oilfields was contributing to underinvestment in extractive technologies, thus threatening long-term efficiency. Moves to reassert commercial control centred on the Gulf where two-thirds of the world's known oil reserves lie. This does not of course preclude searching for alternatives in hostile environments and through alternate forms of extraction such as shale and oil sand, liquefied natural gas or corn-based ethanol. However, large oil-consuming countries increasingly appear to be looking to Africa (initially to existing fields in West Africa) as an increasingly important supplier. A number of commentators saw a link between this strategy and the US creation of Africom in 2008 as a single Pentagon command over the continent (for example, Juhasz 2008). Oil discoveries in Kenya and Uganda, as well as those in Somalia, underline the degree to which areas once considered peripheral, indeed in donor terms, even sometimes ‘ungoverned’, are now significant in global calculations on securing access to oil.
Within the Horn of Africa, Sally Healy has identified a number of key underlying variables which are pertinent to current extractive interests. She notes the importance of identity politics overlaid by ethnicity and clan as factors in processes of state formation and disintegration that characterise much of the region, including Ethiopia, Eritrea, and the Sudans as well as the Somali lands (Healy 2008). In addition, religious fault lines have been exacerbated by ethnic and now antiterrorist allegiances. Few countries in the region have enviable governance records and their culture of militarisation means ready recourse to military solutions at all levels. Much conflict occurs over centre–periphery relations where there is a marked tendency towards economic and political marginalisation. Healy further notes that one country's periphery is another's backyard, leading to high levels of security interdependence – ‘mutual interference’ in plain English, or what postmodernists might term a regional security complex. The strongest regional states see threat very much in traditional military terms, whereas weaker political entities rely more heavily on ‘societal security’. Much of this is a zero-sum game where destabilisation of neighbours is perceived to be a strategy furthering self-interest more effectively than mutual co-operation. Where strong regional institutions should be vital in building regional stability, they are instead paradoxically undermined by the resulting regional insecurity. Consequently, the regional body Inter-Governmental Authority on Development (IGAD), boasts a much worse record in sustaining regional stability than other regional counterparts such as the Economic Community Of West African States (ECOWAS) or the Southern African Development Community (SADC).
This pattern of systemic volatility extends beyond the immediate neighbourhood, with conflicted zones in recent years reaching from Chad through to northern Uganda. A number of approaches to peacebuilding have been applied in the region. In general, outside-brokered ones have not worked (indeed, they have often had the opposite outcome to that intended), whereas internally driven negotiations that are grounded in cultural and well-understood patterns have tended to enjoy greater success. This has particularly been the case in Somaliland (Walls and Kibble 2010b, 2011).
Healy's comment is that security within and between states ‘has no common language’. Key questions such as who determines the ‘self’ (as in ‘self-determination’) thereby remain unresolved, as do questions on the legitimacy of borders even where relevant and apparently valid agreements exist. There is a long history of administrations in the region viewing formal treaties and agreements as less important than the ebbs and flows of day-to-day political convenience/necessity. Arguably, this pattern lies behind ongoing tensions between Puntland and Somaliland, between Ethiopia and Eritrea, within Kenya, between Kenya and Somalia, replicating, of course, decades of colonial duplicity.1
It is instructive at this stage to consider the ways in which similar situations in different regions have played out in the past. We will briefly consider Mozambique and Timor-Leste.
Mozambique has had large known coal deposits for some considerable time, but fairly recent exploration has also identified large offshore natural gas deposits. In a recent public speech at Chatham House, President Guebuza of Mozambique talked of the need for transparent systems and regulations such as the 2001 Law on Petroleum that dealt with safety, environmental concerns, and public transparency in the tendering process (Guebuza 2012). Much of what he said concerned the need for consultations on the best legal framework following international best practice. He also noted the urgency of measures to train as many Mozambicans as possible in skills relevant to the extractive sector through capacity building and private-sector schemes. Coupled with this has been expansion of universities, with new courses aimed at producing more geoscientists. The bulk of the capital investment required is expected to come from the private sector. He also noted the importance of decentralisation, with local government expected to play an expanded role in public procurement and regulation of private corporations in terms of corporate social responsibility. There would, he hoped, be opportunities for young Mozambicans and those returning from the diaspora to set up outsourcing companies to service the natural gas industry and in development of by-products such as fertilisers.
He was aware of a number of balancing acts that would be required. Taxes on gas extraction enterprises and their employees would need to be sufficiently high to fund state capacity to promote development and diversification, but not so high as to prevent outside investment. Natural gas exports would provide foreign exchange, but energy sources would also need to be available domestically at cheap enough prices to provide for national and household needs and thereby to promote indigenous growth, diversification and, most importantly, industrialisation. He acknowledged that these benefits would not accrue immediately, and neither would gas reserves alone solve all the problems of poverty and the inheritance of the civil war. Nor should they divert attention from the more traditional sectors. He talked of extending social protection measures, such as those targeted at Mozambique's elderly, but he rather skated over the problems experienced by those resettled to make way for mega-projects – including, for instance, the development of a new deep-water port on the Zambezi River.
Asked specifically by one of the authors on what lessons he would pass on to countries such as Somalia and Somaliland, he magnanimously invited other East African nations to join with Mozambique in learning through comparative experience about best practice. However, pressed on more specific problems, he strongly rejected the ‘resource curse’ hypothesis, preferring the glib observation that no one would voluntarily choose poverty over riches.
In comparison to Mozambique, Timor-Leste has had longer experience with an economy reliant on the extraction of hydrocarbons. In fact, Timor-Leste is rated the second most oil-dependent country after South Sudan. They have been lauded by many for overcoming the resource curse, and a recent government statement talked of the US$10 billion invested in their New York-based Independent Petroleum Fund. The same statement spoke of ‘fast-tracking the establishment of best practice institutions, systems and mechanisms to manage the petroleum sector’. The Dili government has increased revenues from oil and gas through wise diversification of investment strategies, while comprehensive tax audits on resource companies along with the work of an independent regulator have assisted in promoting effective resource management (Agio 2012). The statement goes on to cite success in reducing poverty by 9%, building infrastructure and including local communities in state building. There have also been formal safety net programmes.
However, local non-governmental organisation La'o Hamutuk believes this is only part of the story and that in truth the resource curse is already affecting Timor-Leste. From 2004 they warned that Timor-Leste needed to guard against following the experience of countries rich in natural resources but poor in other aspects of economic and social development, pointing out that nearly all petroleum-revenue dependent countries experienced artificially high prices, substitution of imports for locally produced items, and neglect of non-oil sectors. Their assessment seven years on, in an input to the Parliamentary Commission monitoring the national budget for 2012, was that the resource curse was now manifesting itself in increased inflation, hitting the poor, ‘extreme import dependency, neglect of non-oil sectors and revenue sources, ineffective public expenditure, credible rumours of corruption and failure to plan for the long-term’ (La'o Hamutuk 2011). They point out that such factors can be overcome with long-term planning instead of ‘short-term political or personal priorities’. However issues of capacity, not just of individuals, but of absorption of revenues, failure to create domestic productivity, combined with inflationary pressures that increase the amount of money in circulation and thereby raise prices. Inflation everywhere hits the poor hardest, disproportionately reducing their purchasing power. It also reduces opportunity for investors since labour costs rise.
With finite Timorese resources, La'o Hamutuk estimates that sustainable sectors like agriculture, tourism and small business are the key to diversifying and developing, rather than the Dili emphasis on capital-intensive physical infrastructure and electricity provision, which benefit the urban elite while doing little to reduce dependence on petroleum and imports. They note that the non-oil trade deficit is around a billion dollars (ibid.). They complain that petroleum income goes entirely to the state and does not provide in itself jobs or money for people. ‘A realistic development policy would focus on food sovereignty, import substitution, eco-tourism, agriculture, value-added to farming and fishing and light industry for local production’ (ibid.). La'o Hamutuk makes the more general point that ‘in many developing countries, such mega-projects have boosted economic growth statistics while severely damaging the environment, destroying peasants’ and fisherfolk's livelihoods, leading to social and cultural deprivation and increasing suffering among poor, displaced and marginalised people'. Timor government plans to make the country an upper-middle-income country are undermined by the deterioration in social spending, meaning achieving many of the Millennium Development Goal targets is unlikely on current trends.2
Although Timor-Leste has been praised for its independently managed petroleum fund, spending against oil revenues each year since 2008 has amounted to 7.2%; well above the 3% guideline provided by the sustainable income calculation. La'o Hamutuk was also concerned that parliamentary scrutiny is undermined by unmonitored development projects, with many approved on the basis of an informal agreement or else they bypass parliament altogether. Much of the credit raised by the state involves lengthy, and sometimes vague, repayment terms, creating the likelihood that future generations will have to repay loans after oil revenues have run out and when the population is significantly larger. Overall, La'o Hamutuk estimates that oil wealth alone cannot meet Timor-Leste's needs. Declining state revenues mean that, on current trends, Dili is likely to be unable to finance its budget in only nine years' time.
It is clear that there are lessons to be learned from Mozambique and from Timor-Leste, and equally, Somali culture introduces its own set of contextual particularities. Somalis themselves are noted for the fierceness of their pride in their common culture, language and religion, but paradoxically equally renowned for the divisions within their clan-based social structure. As has already been noted, a long history of outside intervention is just as notable for having misinterpreted those social particularities, helping to deepen divisions while failing to recognise the available bases for supporting a stable and more unified political arrangement.
We have written elsewhere of the practical dangers inherent in viewing Somali society as a series of superficially concocted polarities (Walls and Kibble 2010a). Somali culture and history is in fact extremely complex and outside interventions have repeatedly shown their ability to fatally undermine the success of efforts to promote state- and nation-building (Walls and Kibble 2010b). It is reasonable to suggest that Somali societies are still coming to grips with the collision between a decentralised, male, pastoral democracy and the centralising requirements of the nation state (Bradbury 2008). There is therefore an urgent need to understand the problematic nature of the Somali state and its relation with its citizens, the latter of which is seen by many as requiring the protection of societal security against state predation. The conception of a Somali state that is developmental in nature is consequently seen by many Somalis as oxymoronic.
However, this does not give rise to the state of anarchy that is so often the shorthand term employed by writers on Somali society. Mary Harper shows in a recent book that, while the Somali state underwent collapse, other forms of organisation have to some extent counterbalanced this, supporting both technological and economic development (Harper 2012). The societal forms that have enabled this involve strong, local cultural patterns suitable for a ‘rough neighbourhood’ where international conflicts shape and are shaped by regional and local divisions – clan, religion, state and gender.
This has profound implications if the discovery of significant hydrocarbon deposits is to benefit Somali society in broad terms. Some form of centralised state will be necessary if Somalis are to negotiate successfully with increasingly powerful oil companies. That state or states will also need to act with great determination and integrity if they are to insist that the benefits of extraction be distributed somewhat equitably amongst Somalis.
The importance of a state-led ability to negotiate on behalf of citizens is underlined by recent assertions that oil drives much of Western diplomacy. The Guardian suggested that just such a motivation lay behind the London Conference on Somalia in February and a surprise visit by British Foreign Secretary, William Hague, to Mogadishu (Townsend and Abdinasir 2012). There was talk then of joint UK–Somali collaboration in the oilfields as well as against al-Shabaab. After meeting Hillary Clinton and David Cameron at the London Conference, TFG Prime Minister Abdiweli Mohamed Ali noted specifically that a share of natural resources were on offer in return for help with reconstruction (Townsend and McVeigh 2012). Opinions vary as to how much oil formed a major focus of discussion. The Puntland minister of international cooperation was asked directly if oil was discussed in London and he stated unequivocally that the Guardian had got it wrong: the subject was not broached as part of official talks. The UK minister for international development, Andrew Mitchell, offered a similar denial. However, others claim that oil has been on the agenda in UK–TFG intergovernmental meetings (Fiqi 2012a, 2012b).
An indicator of the lack of local negotiating weight lies in the fact that the Republic of Somalia's National Oil Law of 2007 was allegedly written by Canadian lawyers and the state of Kuwait (Abdillahi 2012). By all accounts, that law vastly underestimates the reserves and allots some of the smallest royalties on shared profits in the petroleum world. How far that fits with the need for a legal framework domestically and with recognised international agreements including environmental and long-term developmental considerations is moot.
We interviewed a Puntland activist on the lack of transparency in the negotiations between the Puntland government and the oil companies and of worries over the privatisation of security – not just in oil enclaves – but throughout the country. His comment was that it is difficult to understand the long-term implication of a growing extraction industry unless there is transparency over contracts. At this stage, he fears precisely that state capacity to negotiate favourable terms is lacking, while long-term stability is also questionable. He also holds the view that the privatisation of security has reduced transparency, resulting in SCS/Saracen establishing themselves as ‘the strongest army in Puntland now’ (Interview A 2012). There are reports, too, of British Special Air Service (SAS) members guarding oil rigs (James 2012).
The securitisation of conflict and the use of private mercenaries has a potentially destabilising effect, risking alienation of local communities. Private security firms are also extending their participation into non-oil areas in which they are functioning in a capacity that would elsewhere be considered the preserve of national defence forces, including the provision of security for state occasions, and involvement in antipiracy activities. The alienation arising from this approach is apparent in the perception that ‘for the first time in my life, I have seen people from Puntland who are frightened of the government … saying that we don't want to talk … and [they say that] it's all due to this new Saracen security operation’ (ibid.). He went on to acknowledge that there is little hard evidence to test the veracity of these opinions, but whether true or not, they are indicative of a growing degree of distrust engendered directly by the privatisation and internationalisation of state security provision.
This is of course reflective of the lack of both public and state faith in Puntland's own police and army. Nor does it seem that there is the capacity or willingness within Puntland to advocate for transparency on these issues or to undertake comparative work on other similarly placed countries. As an activist put it, ‘I have not seen any other Somali, either politician or civil society talking about this. I have seen some parliamentarians raising some voices in Mogadishu about specific security issues but not in relation to oil.’ It remains the case that most Puntlanders still welcome the oil companies given investment, jobs, and the appreciation of the Somali shilling against the dollar. But there is awareness that there is, as yet, no legal framework which establishes how revenues are collected and divided between Garowe and Mogadishu. Additionally there is great suspicion of corruption within the TFG in Mogadishu, with many fearing the possibility that TFG members will be tempted to raid revenues before the TFG mandate expires in August 2012.
Keith Hill, president and CEO of Africa Oil, said the following in January 2011 in relation to his company's production sharing agreement with the Puntland government to explore the Dharoor and Nugaal valley areas: ‘we look forward to the upcoming wells in the rift basins of Puntland which we believe could hold similar potential to the geologically related basins in Yemen which contain more than 6 billion barrels of discovered reserves’ (Africa Oil 2011). A similar comparison has been made by other industry insiders (Petroleum Africa 2012). Some reckon that total reserves in that area alone could amount to 10 billion barrels.
The Somaliland government has separate prospecting agreements with a number of oil companies, including Australian company Jacka Resources, UK-based Ophir Energy, the Norwegian Asante Oil and UK-based Prime Resources (Morgan 2011, Petroleum Africa 2012). Prime Resources and Jacka have signed their own agreement to work together in partnership with locally based Petrosoma (Baldauf 2012). The Somaliland authorities have also been trying to establish a UK-linked corporation to act as an entry point for investors concerned about the implications of the lack of international recognition. There are few consistent estimates of reserves in Somaliland, with most simply repeating the comparisons noted previously between Somali and Yemeni fields.
Worryingly, a good half of the Nugaal basin, referred to by Africa Oil's Keith Hill, lies in territory that falls inside the colonial borders of the British Somaliland Protectorate and is now claimed by both Puntland and Somaliland. This situation points to what, in the opinion of some, is the most significant threat to regional security in the future. It is easy to imagine that conflicting resource agreements will lead to significant conflict in the future, and on that level one might wonder if Puntland, as the politically weaker of the two Somali territories, might not fare the worst.
Another security-related concern lies with al-Shabaab. There seem to be two distinct possibilities: extraction installations may become attractive targets for attacks from Shabaab, or it is possible that the security provided to those installations instead creates islands of stability. Volatility could also increase if pirates find ways of preying on oil installations, but similarly it could decline as youth see other opportunities to break from piracy and Islamist militancy made more dangerous by heightened, privatised and internationalised security operations.
There is some precedent for increasing stability from Armo in Puntland, where drilling in the Shabeek Wells was covered by a successful inter-clan agreement providing a safe environment for exploration. Al-Shabaab as a force are widely acknowledged to be as weak as they have been for many years, so perhaps that, too, supports a more optimistic line on security. Piracy has also declined in the past year or so, as countermeasures have become more effective (Arnsdorf 2012).
However, the possibility that either or both might find ways of reorienting their operations to take advantage of the opportunities offered by burgeoning extractive industries cannot be ruled out. Al-Shabaab's relocation to the Puntland/Somaliland Galgaala mountains certainly places them closer to extractive activities. The potential for this to add further complexity to a complicated situation is already evidenced by disagreements over whether the periodic fighting that has broken out in that area since 2010 is in fact between al-Shabaab and Puntland authorities or local militia, and whether the root cause is unwelcome Shabaabi militants or oil. Perhaps it is not too much of a stretch to suggest that the fighting and even the presence of al-Shabaab members might be seen as an effort by local clans, and particularly the Warsangeli, to secure potential oilfields for future exploitation (Brower 2009, Beerdhige 2012).
Conclusion
Events in Somalia show there is a long way to go even after the supposed success of the London conference. There is general agreement that a broad-based government needs to replace the TFG when their mandate expires in August. However, the shape of the government will not be clear until after August. Any increase in oil-related investment will occur against the background of drought and environmental fragility, suicide and other bombings, and the continued presence of Ethiopian forces plus the African Union peacekeeping mission in Somalia (AMISOM) which has been expanded to include ‘re-hatted’ Kenyan troops.
It seems unlikely that even with knowledge of the difficulties in working in ‘borderland’ countries, major oil companies will be much interested in dealing with a complex history, a regional culture of militarism, or the problematic and contested nature of the Somali state. Nor is it likely that they will be much aware of the ways in which global agendas on terrorism and security have tended to accentuate Somali division and state failure in the past, rather than supporting reconciliation or stability. At present, Somali administrations and the nascent civil societies in Puntland, Somaliland and Somalia are ill-equipped to push for transparency, equitable production-sharing agreements, support for local community schemes, robust environmental impact assessment, indigenisation, or capacity-building and training agreements.
It remains an open question as to the form of state that would best equip Somalis to negotiate and implement favourable production and extraction agreements with international corporations or Western governments. The fact that Norway is offered time and again as the key model for that task is in itself instructive. Is it necessary for a society to already be wealthy, educated and politically aware if it is to avoid the twin perils of the resource curse and the imposition of an increasingly kleptocratic public–private partnership of the most predatory type? If that is the case, then it does little to engender a sense of optimism in the Somali case.
Notes on contributors
Michael Walls's research, consultancy and teaching interests lie in the related areas of development management and governance. He is Director of Research at the Development Planning Unit, University College London, and his doctoral research was in political governance in Somaliland. He is Chair of the Anglo-Somali Society, Somaliland Focus (UK) and Kayd Somali Arts and Culture Ltd. Steve Kibble works on issues on issues concerning Southern Africa and the Horn for Progressio (formerly the Catholic Institute for International Relations), an international development agency working for justice and the eradication of poverty. He has observed several Somaliland elections as a member of Progressio as well as of Somaliland Focus (UK), of which he was a co-founder. He holds a doctorate on African politics from the University of Leeds. Walls and Kibble were joint coordinators of international presidential election observation in Somaliland in June 2010, reprising a similar role in 2005.