West turns to Somaliland while rest of Somalia crumbles (Feature)

By Michael Logan Oct 19, 2010, 3:06 GMT

Hargeisa, Somalia - In the centre of Hargeisa, the capital of the self-proclaimed state of Somaliland, a Soviet-era MiG jet sits atop a brightly painted plinth.

Its squat, deadly body is a reminder of the destruction dictator Mohamed Siad Barre ordered visited upon the city as Somaliland fought for independence from Somalia in the 1980s.

But beyond the memento of the bloody past, the scaffold-bristling skeleton of a multi-storey building rises into clear blue skies that once rained bombs.

The building - the new headquarters of Dahabshiil, a booming money-transfer company handling hundreds of millions of dollars in remittances from the diaspora - symbolizes a brighter future and shows why the international community is taking increasing notice of Somaliland's efforts.

Somaliland declared independence in 1991 when Barre was ousted. Since then, it has rebuilt Hargeisa and recast itself as a bastion of stability and democracy.

It is a stark contrast to the rest of Somalia, where Islamist insurgents lay siege to the latest ineffective government in the south and pirates based in the breakaway region of Puntland terrorize international shipping in the Gulf of Aden.

Just a few months ago, Somaliland held a presidential poll international observers deemed credible - a feat regional states such as Rwanda and Ethiopia couldn't pull off.

Ahmed Mohamed Silanyo, the new president, slashed his cabinet and filled key posts with Western-educated technocrats. In response, dozens of representatives from the United Nations, European Union and the World Bank trundled through Hargeisa in a dusty convoy last week to discuss development with the new administration.

The UN estimates Somaliland receives close to 100 million dollars each year in aid - almost a third of what goes into Somalia and twice the budget of the Somaliland government.

Marc Bowden, the UN's Resident and Humanitarian Coordinator for Somalia, believes this could double next year.

'As people see the capacity and opportunity, I'm sure funding will increase,' he said.

The United States, which recently announced it will work more closely with Somaliland and Puntland, put 7 million dollars into Somaliland in 2009 through its aid wing USAID. By the end of this year that figure will have almost quadrupled.

Washington, concerned about the Islamist terrorism threat, has focused its support for Somalia on the Transitional Federal Government in the war-wracked capital Mogadishu.

The conflict, which has killed over 21,000 people and displaced over a million people since early 2007, has only intensified. The al- Qaeda-linked group al-Shabaab and its allies now control much of south and central Somalia.

Somaliland insists that, if supported, it can serve as a buttress against radical Islamism and fight piracy. Minister of Mining, Energy and Water Resources Hussein Abdi Dualeh, a Somali-American, believes the new US approach shows the message is getting across.

'The US has for some time been wasting money on ... Mogadishu,' he said. 'I think they realized ... aid we get here will not be torn up by shrapnel.'

Washington may be impressed by Somaliland's efforts, but al- Shabaab is not.

It killed around two dozen people in suicide bomb attacks in Hargeisa in October 2008. Today, concrete barriers shield hotels and government offices from car bombs and dozens of police toting automatic weapons protected the visiting delegation.

Although donors are upping their funding, there is a limit to what they can do while Somaliland remains unrecognized.

Much of the World Bank's funding mechanisms are out of reach due to Somalia's massive debt, bilateral relations are not possible and getting insurance and guarantees for exports is an uphill battle.

'The main problem is the recognition,' said Guelleh Osman Guelleh, who runs a business exporting Frankincense and Myrrh to France. 'It`s a big disadvantage being placed in the same bracket as the rest of Somalia.'

Somalilanders believe they should be recognized given the former British protectorate was briefly independent in 1960, before joining with Italian Somaliland to form Somalia - a decision they still regret.

'That other African states would then declare independence is used as an excuse, but Somaliland has been a nation state before,' said Foreign Minister Mohamed Abdullahi Omar.

Somaliland`s economy is dominated by livestock - the port of Berbera exports the largest number of livestock through a single port in the world - and diversification is seen as crucial.

Aid officials say developing the Berbera transport corridor to Ethiopia would boost the economy, while the private sector - thriving =in telecommunications and money transfer - has significant promise. = According to Dualeh, huge deposits of oil, gas and minerals are waiting to be exploited once issues of concessions handed out to foreign companies under the Barre regime are resolved.

Despite this promise, there is a long way to go.

In Hargeisa, mansions built by returning diaspora sit cheek-by-jowl with makeshift huts housing displaced people. Rubbish litters the side of roads that are little more than compacted sand. Somaliland faces huge unemployment, poverty, cyclical drought and a widespread debilitating addiction to the narcotic Khat leaf.

Yet many believe that given the right backing, the self-proclaimed state of 3.5 million people could disprove the notion that Somalia - which routinely tops the list of the world`s failed states - is beyond help.

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