Somalia: Somaliland Set to Usher in Major Port Investment

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The state unilaterally declared independence when civil war erupted in Somalia in 1991 and is officially seen as an autonomous region rather than a country.

But it has held a series of democratic elections, has its own currency, and is a haven of relative refuge from the terrorism and piracy that afflict Mogadishu's government.

As well as targeting infrastructure investors, the government has ushered in frontier oil companies like Genel Energy, which are exploring Somaliland's potentially huge reserves. But like Somalia, the nation is hampered by the fact that it has no access to international financial services.

"There is almost an inevitability occurring [around the independence bid], as Somaliland creates this financial self-sufficiency," Mr McCue argues.

"When big international companies come in, who have immense power in the states where they are from, they are going to demand that their home state pushes for [Somaliland's] independence, because they are going to want to operate in a normal financial services market."

Hargeisa's foreign minister says that "dealing with the rest of the world in terms of investments and development and security" is proof that the region is fulfilling the criteria required of a country. "We believe that we will get recognition soon, because we have done well," he claims.

But sources close to talks between Somalia and Somaliland tell This is Africa that a new government in Mogadishu shows little indication of changing its stance by recognising the breakaway region's right to independence.

Somalia has contested oil licenses awarded by Somaliland's Hargeisa-based government, saying they infringe on old concessions awarded by the federal government before 1991. A draft petroleum bill says the central government alone has the "privilege to distribute natural resources".

Somaliland could wait a while longer before it gets the recognition it has been hankering after for two decades.

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