Class and Power in a Stateless Somalia
Published on: Feb 20, 2007

Class in Pastoral Areas

A class analysis of traditional pastoralism is notoriously difficult. But in the 1970’s and 1980’s, Somali pastoralism was completely transformed by the advent of large-scale commercial exports. In the early 1980’s, livestock exports through Berbera provided over 75% of Somalia’s recorded foreign currency income.

This involved the establishment of a very complex trading and financial system based at Berbera port, with a network of agents and brokers stretching throughout Somalia (and, after 1991, into Ethiopian territory). The export-orientation of the trade entailed very careful management of herds as they moved north towards Berbera. An important result of this was the creation of pastoral enclosures to provide feed for these herds. In many areas, most of the best pastureland is now privately owned. Another result is the extension of credit relationships throughout the Somali peninsula. The operation of finance in the pastoral sector is unusual in that the herder extends credit to the dealer, who repays when the animals are sold in Aden or Jeddah.

Overall, Somali pastoralism has been characterized by a unique but highly developed capitalist system, dominated by a handful of export traders based in Berbera and to a lesser extent Bosaso and Kismayo. In the 1980’s, these traders—especially those in Berbera—came into conflict with the Siad Barre government. But the government never succeeded in capturing the livestock trade: its commercial agents were never sufficiently well-capitalized nor efficient enough to displace the existing traders. This proved fortunate as it enabled the Berbera-based market and finance systems to re-establish themselves relatively quickly and uncontroversially after 1991.

However, the state did penetrate pastoralism. Siad Barre used state resources (drilling water wells, establishing grazing enclosures, sending in the army to impound herds) in support of his favored groups. The Hawiye of the central rangelands were particularly hard-hit because their neighbors belonged to the President’s Marehan clan. The losers in the dual processes of capitalist development and unequal state intrusion were forced to become urban laborers or rural bandits. In 1989, when General Aidid arrived in the central rangelands to begin the armed struggle of the USC, he found a de facto insurrection already in place. He had only to organize clan-based banditry into a militia to find himself in command of an insurgent army. Since the collapse of the state in 1991, following a period of conflict, many of the former inter-clan conflicts over pastoral land were stabilized relatively quickly. With no state power to intrude, a relative equilibrium returned. The herders re-established workable boundaries between their grazing lands and collaborative arrangements for access to water and markets. Conflicts have recurred but never to the devastating extent of the late 1980’s up to 1991. The chief areas of contention have been the contested borderlands in the central rangelands and the middle Jubba valley.

In the 1990’s, the leading export traders of Berbera played a key role in establishing and stabilising the Somaliland state, while those in Bosaso played a similar role in Puntland. Those in Kismayo met with only limited success, their failure related to the unresolved conflict over riverine farmland in the Jubba valley. It is likely that, in the absence of stabilized control over Kismayo port by a faction with reliable trading links up the Jubba valley, that the livestock economy of this area will remain integrated with Kenya.

Most Somali livestock is now owned or controlled by these trading networks. An increasing number of former pastoralists have found that their way of life is no longer economically viable. Some become paid herders, others are active in the urban informal sector, others are militiamen. Many of their dependents live in refugee camps.

Those in the middle have turned to the fast-growing agro-pastoral sector. The spread of cultivation across many formerly pastoral areas, especially in Somaliland and the central rangelands, is a far-reaching socio-economic development whose implications will be seen in the coming decades. Alongside the farming regions of Bay and Bakool, this may see the emergence of a demographically dominant agrarian class in rural Somalia, characterized by poverty and poor political representation. If unhindered and unregulated capitalist pastoralism continues to develop, then it is inevitable that major problems will arise in the agro-pastoral areas. The spark for these conflicts will probably be land, as land tenure systems in these areas are poorly-developed. They are prone to land-grabbing by the mercantile class and disputes between herders and agro-pastoralists. Meanwhile, the growth of agro-pastoralism also has environmental implications that need to be studied, as many areas are unsuitable for cultivation or year-round grazing. In these marginal areas, agro-pastoralism is a step towards deepening poverty.

The Remittance Sector

Somalia has been a major exporter of labour since the 1970’s. By the 1980’s, analyses of the survival of the Somali economy, and its perplexing prosperity in certain sectors, concluded that a huge unrecorded inflow of remittances was a key, if unrecognized, economic factor. Foreign exchange was in fact plentiful in urban Somalia, and those with access to it were able to survive lean times and even invest in housing and consumer goods. The breakdown of the formal financial service sector, already well under way in the 1980’s, was completed by 1991. Thereafter, private sector international brokers established an extremely effective and efficient money transfer system so that Somalis working in East Africa, the Gulf, Europe, America and elsewhere can wire money back home. By 2001, the leading Somali finance houses were multi-million dollar operations, diversified into telecommunications, trade and light industry. The hasty U.S. decision to freeze the operations of the largest of them, Al-Barakaat, on unproven accusations of being a conduit for al Qa’ida funds, damaged but did not destroy this thriving business.

In the absence of state regulations for financial institutions, the remittance system relies on reputation and trust. The clan system is the foundation for this, because it means that every individual can be located and guaranteed. A second mechanism for trust is Islam, specifically membership of Islamist organisations, which has the advantages of crossing clan lines and being readily understood and widely utilised in the Arab world. An Islamist affiliation unlocks access to considerable Islamist financial resources, which are typically dispensed through private philanthropic channels with modest accountability.

The finance mobilized through the remittance sector has become the basis for investment in other sectors including telecommunications, media, transport, building and sundry other activities. Because of its vibrancy and centrality to the urban economy, and also because of its links to Islamist resources, the financial services sector has also helped to support a range of social services including schools and health centres, many of them with an Islamist color.

The flow of remittances has not been controlled by any major political or clan affiliation. The minority clans have been, as usual, disadvantaged, while the Bantu have received nothing. More significant has been the way in which remittances have established thriving urban enclave economies and brought political power to the major businessmen operating in these sectors.

In the absence of a state that can both regulate and provide protection to the financial sector, the leaders of the remittance/financial services sector have needed to position themselves carefully with respect to the political alignments and realignments that characterize Somali politics and its relationship with the Arab world. This positioning was successful until the abrupt sanctioning of Al Barakaat by the U.S. Administration in the wake of September 11. Thereafter, financiers have been anxious to demonstrate their probity and transparency, setting up the Somali Financial Services Association. To date, the owners of finance houses, though extremely wealthy and influential, have not been in a position to make (or unmake) political power in Somalia and Somaliland.

While most remittance money is sent for private use, the diaspora is also an important source of financing for political factions. In many instances, clan politics is often more heightened and divisive among the Somali diaspora than at home. For example, this has been the case in London, where aspiring factional leaders find it easy to raise money on the basis of dubious claims about clan politics at home. There are cases in which diaspora money helps to fuel conflicts that might otherwise be settled. Many of Somalia’s radical Islamists have also been politicized in the diaspora, in mosques in London or the Middle East, and have imported various strands of salafism and jihadism to Somalia from these global centers of political Islam.