Strategic Importance of the Horn of Africa in Terms of Economy and Trade
Strategically, the Horn of Africa is located along one of the most critical land and sea trade routes and close to the Arabian Peninsula, which is well known for its oil reserves. The connection between the Red Sea and the Indian Ocean where the Horn of Africa is located gives the region more attractiveness as it is used as a passage by the ships bound for both the Middle and the Far East from the other continents such as Europe (Arnaud, 2017). The strategic location of the Horn of Africa provides the region with economic and trade significance which has aroused the interests of the other countries majorly from Europe and the Middle East and especially the Gulf countries such as the United Arab Emirates and Saudi Arabia (Verhoeven, 2018). However, the Horn of Africa region, comprising of countries such as Eritrea, Djibouti, Somalia, and Ethiopia, has had skirmishes and political instability cases which have weakened the economic potential that region possesses. Ethiopia is the most economically advanced among the countries in the Horn of Africa and is landlocked. The country envisions a mega hydroelectric project that involves the completion of the construction of significant hydroelectric dams, which are poised to export large amounts of electricity to the other countries within the Horn of Africa and in the East and Central Africa. Ethiopia also specializes in trade and commerce, which have contributed to the massive growth of the nation's economy (Verhoeven, 2018). The stabilization and the reduction of the tension in the Horn of Africa is part of the larger plan of the United Arab Emirates as part of the Gulf countries contributing to the peace and stability for economic gains in the region. However, there are concerns of the increase in competition among the Gulf countries for the financial benefits in the horn of Africa, which can easily be translatable to the efforts meant to pay off financially to the Gulf countries in future.
UAE Interests in the Horn of Africa Region in Terms of Economy and Trade
It is widely recognized that the Gulf countries are interested in the peace and stability of the Horn of Africa region. The leaders from the Horn of Africa region such as Djibouti and Somalia have met severally in Riyadh, the capital of Saudi Arabia, to facilitate the peace talks within the Horn of Africa, which has been stated as good for the economy (Kabandula & Shaw, 2018). The representatives specifically met to discuss the new Red Sea security alliance which was to facilitate the safe passage of the ships bound for Europe from the Middle East and vice versa. The specific crime targeted by the Red Sea security alliance is the increase in piracy, which has been reported within the Horn of Africa region leading to financial losses, and thus, adversely affecting the international trade and economy (Kabandula & Shaw, 2018). The deep natural harbors spread across countries such as Eritrea and Somalia are proven strategic hubs for the water vessels stopovers which are largely capable of boosting the trade and economy of the stated nations.
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The UAE has also gone an extra mile in the fostering of the peace and stability in the horn of Africa. The country has in the past had its property developers working on substantial projects in the Ethiopian capital, Addis Ababa that have been viewed as part of the interest that the UAE has on the countries making up the Horn of Africa (Johnson & Babu, 2018). Additionally, the UAE has established a military base in Eritrea which has been in operation since 2015 and is gradually contributing to the increase in peace and harmony in the country and consequently in the entire Horn of Africa. The UAE has also been reported to plan the establishment of another military base in the northern Somalia region which is regarded as a step closer towards the peace and stability in the horn of Africa for economic prosperity whose signs are already noticeable (Johnson & Babu, 2018). The UAE has also expressed its interest to join the other countries such as Japan, Italy, and the US in setting up military camps and bases across Djibouti, which has been seen as the efforts of the country to push for political and economic stability in the area.
Apart from the Horn of Africa sharing religious beliefs with the Gulf countries, there were economic ties between the two regions from as early as the 1990s (Cheeseman, 2016). Nevertheless, the financial relationships between the Gulf and the Horn of Africa were somewhat dormant throughout the 1990s. During the economic crisis in 2008, the wealthy Gulf countries, the UAE included, rushed to purchase farmlands across the Horn of Africa with the main reason being their desire to hedge against the expected food insecurity. The move has implied the authenticity of the UAE in its concerted efforts to restore peace and political stability for the economic gain in the region (Cheeseman, 2016). The investments made by the UAE and other Gulf countries in nations such as Ethiopia led to a shortage of hard currency. However, Ethiopia has had to obtain financial aid and several loans from the UAE to settle the situation and secure its economic significance in the economically unstable Horn of Africa.
Agreeably, whether most the economic gain from the horn of Africa goes to the member countries themselves or the UAE, it is necessary for the region to regain its political stability to favor the region's economic prosperity (Cannon & Rossiter, 2017). Djibouti has had joint ownership and operation with the Dubai based DP World firm, which has been reflected in a seizure that the Djiboutian government has been accused of effecting. The primary reason surrounding the seizure of the port from DP World by the government is the supposedly weakening bilateral ties between the UAE and Djibouti. The container terminal was opened in the country in 2009 and was credited as the only one in the Horn of Africa region to handle up to 15000 tons container ships (Cannon & Rossiter, 2017). The Doraleh Container Terminal quickly began handling the Ethiopian bound cargo. Thanks to the UAE, landlocked Ethiopia was able to have their imports and exports handled through Eritrea, which is geographically a shorter and more convenient location than the ports in either Sudan or Somalia (Cannon & Rossiter, 2017). DP World is said to have struck a new deal with Somaliland for the port of Berbera which Ethiopia expressed interest in acquiring a stake in order to avoid the instability in Djibouti and the inconveniences at Doraleh port.
Policy Recommendations That UAE Foreign Ministry Should Adopt
Firstly, the UAE Foreign Ministry should provide a support system for DP World and other related private and public firms within the country to set foot in the Horn of Africa and provide the development of ports. One of the ways of reducing the cases of piracy reported by the ships traversing the Horn of Africa is to include the member countries of the region in the deal and enable them to gain financially from the international trade (Knight & Elmi, 2019). The efforts of DP World in developing and commercializing the Doraleh port have been noticeable although Djibouti's political instability has negatively affected the development of the project and the financial gain of Ethiopia from its imports and exports handled at Doraleh. Therefore, a support system would be necessary as DP World represents the economic and trade interests that the UAE possesses in the Horn of Africa region.
Secondly, the ministry of foreign affairs should work with the ministry of economy and finance to authorize more loans for the nations in the Horn of Africa meant for financial growth. Financial aid is a necessary part of improving the economy and trade of the region as evidenced by Ethiopia. The countries in the Horn of Africa may require extra funding to actualize their projects different from those of developing the ports to tune into the world sea trade. Apart from Ethiopia, the other countries in the Horn of Africa such as Somalia have promising economic growth rates. With the economic empowerment of the region, there will be increments in trade, and thus the Horn of Africa will be economically prosperous shortly.
Thirdly, the UAE foreign ministry should develop policies that favor political stability in the Horn of Africa before the economic prosperity is achieved. The war in Yemen has been a negative contributing factor in the political stability and hence the financial well-being of the horn of Africa (Dorsey, 2017). With the foreign ministry having policies that target the reduction of the political instability in Yemen and the horn of Africa, the UAE will ensure that the region has a favorable environment for the economic prosperity in its future. The political stability policy for the Horn of Africa should enhance the establishment of more military bases in other countries such as the larger Somalia other than the Somaliland region to enhance political stability and prepare the region for economic advancement.
Fourthly, the UAE foreign ministry should consider narrowing down majorly to the other countries across the Horn of Africa before the political certainty of Somalia as a country in the horn of Africa is assured. Currently, the UAE has significant plans for the economic prosperity of the Somaliland region of Somalia. Notwithstanding, Somaliland has not achieved international recognition as a country which means that the larger Somalia is intended to be part of the UAE investments in its northern part. Therefore, the UAE foreign ministry has to ensure that there is surety in the political climate of Somalia before the country is involved in the economic advancement plan meant for the Horn of Africa.
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