[Continued from the previous issue]

The Political Economy of Forced Social Autonomy in the North

At the start of this turmoil in 1977, foreign donors and creditors pressured Barre’s government to implement an economic reform programme, which included as its central prescription the deregulation of exchange rates. They negotiated with their hosts what was called the franco valuta system, in which local businessmen could convert foreign remittances from Somalia’s estimated 250,000 overseas migrant workers earning $1.5 billion annually at open market rates to pay for imported goods. The official aim of the policy was to relieve a shortage of basic goods while tapping illicit imports of hard currency estimated to top $350 million into legal channels that could benefit the country’s depleted treasury. By 1985 remittances to Somalia alone totaled an estimated $338 million, about fifteen times the entire wage bill for the country’s formal sector. Northerners contributed disproportionately to these remittances, reflecting the tendency of politically marginalized people to search for work in the Persian Gulf and further afield. They did this rather than engage in what for them were more difficult efforts to get incorporated into the country’s increasingly pervasive patronage politics, compared to opportunities available to more politically favoured Somalis. Isaaq also formed the core of a West European-based diaspora among those who worked in Britain’s merchant navy after the end of the Second World War. Further Isaaq migration to Britain followed in the 1960s and 1970s when political aspirants and would-be entrepreneurs lost out in patronage politics after independence, then more so after Barre’s 1969 coup.

Instead of deregulating economic exchange, Barre’s informal manipulation of franco valuta accomplished the reverse. He retained control over import licensing, which he distributed on the basis of political calculations. Those already deeply entrenched in clandestine commerce and diversions of aid with this permission were especially well placed to benefit, since they could channel this capital into what were effectively legalized smuggling operations. He used uncertainty to enhance his personal control over exchanges, ‘canceling’ franco valuta in 1982 (though application of this ‘cancellation’ was at Barre’s personal discretion), only to officially revive it in 1984. Retention of other regulations also gave Barre’s regime tools to allow favoured entrepreneurs to undervalue imports, increasing the value of their franco valuta profits vis-à-vis competitors. These manipulations reinforced the political nature of Somalia’s clandestine market as an instrument in Barre’s exercise of power.

Meanwhile, politically marginalized groups continued to rely upon local solidarities to protect their transactions against inconsistent enforcement of laws and competition from the president’s business allies. For example, Ali Mahdi, noted above as a big landowner in the south, then later a militia financier translated his presidential favour in the 1980s into a franco valuta assisted business empire. Ali Mahdi owed his position to Barre’s protection and not to his Hawiye kin. This gave him geographic and social flexibility, defined by Barre’s political network rather than on any claims he might make on his kinsmen by virtue of custom. This left Ali Mahdi vulnerable to Barre’s machinations, and he was jailed in the early 1980s on suspicion of supporting a coup plot. But he was rehabilitated in 1984 in time to profit from franco valuta. Ali Mahdi then quickly became a major figure in Mogadishu business circles, largely through managing the Barre regime’s ties to Italian businesses, including those that offered access to sophisticated arms. Ali Mahdi made an ideal associate for Barre, since his reliance on the president ensured that he would not have any real independent base of support. The social context of Ali Mahdi’s power was reflected in his 1991 bid after Barre’s flight to get him recognized as ‘interim president’ on the basis of Italian diplomatic support and his ability to arm fighters, not for his status as a representative of a particular group of people or community. These ties and their connection to arms acquisition reinforced the disruptive character of this new elite attached to a centralized and violent patronage network, then courted by foreigners once widespread fighting broke out in the 1990s.

Usman Ato, later to become a financier of Mohammed Aydeed, also consolidated his business position in the 1980s without having to face much of the burden of customary demands or constraints of clan networks from his home community. Like Ali Mahdi, Usman Ato helped organize arms acquisitions for Barre’s government. Usman Ato shared ‘official’ clandestine commercial ties to Aydeed, who had been exiled and then returned to Barre’s fold as a defense minister and key organizer of arms acquisitions in the 1980s. Like Ali Mahdi, Barre punished, only to later rehabilitate both of these men into exploit new clandestine commercial networks, cementing their dependence upon him. These men and their associates still became patrons to kinsmen, but fateful for future conflict, they did not owe their control over resources and business opportunities to approval from clan authorities or conformity to local social conventions.

These men were the people best able to equip fighters, either young clansmen who came to cities to find jobs, or simply the adventurous, ambitious or desperate. As junior members (or aspiring members) of centralized networks, these young men known as mooryaan, or urban tough guys, sought relief from insecurity through finding some place in the businesses associated with Barre’s patronage networks. Their best chances for relief from poverty came through affiliating with strongmen who could arm them as political muscle or as enforcers in the regime-favoured channels of the clandestine economy. Like their patrons, ‘these bands were constituted more according to personal affinities during the last years of Siyaad Barre, and defined by the same types of activities, or by habitation in the same parts of the capital’. This is hardly clan warfare in the sense of primordial tendencies toward conflict. Instead, it is a good illustration of a security dilemma conducive to forcing would-be victims to seek out a protector, often along kinship lines, to mitigate threats or to share in loot. Barre’s political strategy shows that he recognized that this was especially true if fighters and patrons were in ‘foreign’ territory where the defensive moves of local communities would seem especially threatening to outsiders who, like them, found themselves free from the social bonds of customary means of mitigating conflict. Likewise, ‘foreigners’ who are outside one’s social networks are easier to loot. In this sense, conflict in the 1990s was an intensification of Barre’s informal techniques of rule through patronage and regime imposed insecurity.

Once Barre fled Mogadishu in 1991, business kingpins continued to attract young men to fight on their behalf. In regions where these strongmen could recruit and where their business enterprises generated income, clan elders ‘found themselves attempting to negotiate with young militiamen and bandits from distant clans rather than with "peer" elders’, a situation which one scholar blamed for the failure of customary conflict resolution strategies in the south. This pointed to ways that mobility and allegiance to a new elite based upon appropriation of informal markets and state assets undermined the social control that customary authorities and social obligations once ensured.

Some northern businessmen viewed Barre’s franco valuta cancellation in 1982 and again in 1985 as part of an effort to single them out for punishment and to reassert political control over patronage and clandestine businesses. Some businessmen in the northeast from the Majerteen community complained that few in this region could take advantage of franco valuta in the first place because businessmen were subject to predations of private militias that exacted collective punishment in the 1980s after the appearance of Abdulahi Yusuf’s SSDF challenge to Barre.

Northern economic fortunes suffered further harm from Barre’s regime, but in ways that increased its future autonomy from developments closer to Mogadishu. In 1981, for example, the government imposed a fifty percent tariff on the north’s growing livestock trade to Saudi Arabia, forcing local exporters to rely more heavily upon kinship networks to guarantee transactions across international borders outside the state’s regulatory reach. This trade is estimated to have been worth several tens of millions of dollars annually through the early 1980s. A northern delegation that went to Mogadishu to petition Barre to remove these charges returned home when they were threatened with arrest. Meanwhile, this tariff benefited the economically inefficient Trans-Suba Livestock Project, funded with Italian and World Bank finance that supported this new source of patronage positions and payouts to regime favourites.

This political and economic marginalization led northern businessmen to seek local protection from predatory exactions from officials. Clan solidarities offered them the best prospects for shielding commerce from harm. Clan based credit systems, or abbans, already existed to manage business networks that remained outside Barre’s political grip. They had offered some protection from nationalization policies beginning in 1972, when Barre’s regime took over much of the formal economy’s financial sector. Mogadishu based elites who took over these businesses had ready access to subsidized credit via state agencies. Meanwhile, abbans enabled local businessmen to tap into locally organized informal remittance systems in which overseas senders and local recipients relied upon customary clan authorities to guarantee contracts, protect members, and adjudicate disputes outside state bureaucracies and the informal patronage institutions that hade become increasingly inaccessible to them. Several scholars estimate that 90 percent of foreign exchange from commerce in 1981 (as distinct from foreign aid to refugees and to Mogadishu) was generated through this trade in livestock, much of which was organized through abbans in coordination with remittance flows.

Self-identification of outsider status appeared as local businessmen compared themselves to Greek, Lebanese and Indian commercial diasporas that have relied upon tight-knit families and community self-help organizations to survive hostile political environments. Northern commerce also made use of the geographic proximity to Djibouti, which became independent of France since 1977. Djibouti’s government offered its territory as a low tax entrepôt for transshipment of smuggled goods in and out of adjacent Somali territory to benefit from the need of northern entrepreneurs to find a more secure environment from which to organize their transactions. This enabled the Djibouti business community and the country’s treasury to benefit from their neighbours and clan kinsmen to profit from the smuggling trade in livestock and other goods. Prior to technological developments in telecommunications, Djibouti also harboured trusted Somali financial intermediaries beyond the reach of Barre’s government or patronage network, and who would handle cash for migrants and businessmen and provide credit for those frozen out of Somalia’s formal sector and politically allocated franco valuta financial markets.

Commercial exclusion from Barre’s patronage networks also shaped the organization of armed opposition in the north from the early 1980s. The 1981 founding of the Isaaq dominated Somali National Movement (SNM), for example, owed much to the financial resources of the Isaaq diaspora community in Britain, among whom a receptive audience was found. The role of clan elders in guaranteeing abban transactions of these migrants also ensured that clan elders on the whole exercised greater control over the finances and political processes of this group, compared to others involved in Somalia’s conflicts. This was the result of circumstances, not northern virtue. Furthermore, the SNM had to form in exile to escape Barre’s wrath. Based in Ethiopia during its 1981-88 exile, it remained under tight control of Ethiopia’s President Mengistu. Unlike southern-based militias after 1989, SNM’s Ethiopian patron did not allow it to receive foreign aid from any single major donors, lest this give the group the autonomy to defy Mengistu in coordination with Isaaq herders to settle grievances about access to Ethiopian pasture or revive Barre’s irredentist dream. Mengistu also interfered in SMN’s internal affairs, and had early leaders arrested to hinder the SNM’s utility as a vehicle for personal ambitions of political entrepreneurs.

Thus by the time Mengistu forced the SNM to return to Somalia in 1988, the group could not easily finance itself through predation because it never could develop its own source of funding, ether from a generous patron or through looting local communities. Ultimately it had to raise funds through deals with commercial intermediaries within the abban system constructed outside of Barre’s control. Dahab Shiil, later one of Somaliland’s largest financial and telecom companies, got its start as an SNM financier. Isaaq financiers based in the Ethiopian town of Dire Dawa intervened in the organization’s affairs as they used SNM’s radios to transfer money to fighters. This alliance enabled the SNM to tap into migrants’ remittances to finance armed struggle, but not in ways that made business enterprises an adjunct to their own organization. This arrangement made less likely the southern outcome where militia leaders also were the principal business operators in their region. For their part the private commercial partners in these transactions used this alliance to consolidate their market leadership in telecoms and financial services in the 1990s, the two services that the remittance system integrates.

This relationship continued to influence the organization of the SNM when its Ethiopian patrons force it to return to Hargeisa in 1988. While Barre assigned strongmen that he supported in his patronage network the task of attacking Isaaq communities, they were free to support themselves with loot. SNM fighters, on the other hand, could not loot local communities that provided critical income from remittances and which were the bases of the commercial organizations essential to the militia’s continued survival. Likewise, this lack of local leverage for armed groups undermined prospects for political entrepreneurs in the organization who entertained notions of joining the fray further south to fight their way to power. Their initial dependence on businessmen who were outside Barre’s old networks meant that these men were not as free to loot their home communities as their southern colleagues were doing to pursue ambitions in the wider world of Mogadishu and the periodic foreign-sponsored peace conferences that gave seats to those whose predations made them difficult to ignore.

This did not mean that the north was entirely free of predation. Brig. Gen. Omar Jess, the Ogadeeni commander of the refugee militia after the 1978 war, then commander of a militia in the south, used his position in Barre’s patronage network to loot. As his patron’s fortunes declined, Jess pursued his own ambitions, but this did not require that he shift his strategy for getting resources since he already had built his own commercial networks by virtue of his privileged ties to the president. By the time Barre perceived that Jess was becoming a powerful figure in his won right in the 1988 attack on Hargeisa and the SNM, Jess controlled enough resources to defy Barre’s order to leave his military post. An analyst observed that Jess’ strength ‘comes from having some 8,000 troops, nearly all Ogadeeni, under his direct command’. Clan identity played a major role in this conflict. More important, however, was Jess’ ability to sustain his organization through predation, since he did not derive his main income as a consequence of his on-going relationship with powerful members of a particular community. This was a ‘strength’ gained by virtue of his position in a crumbling centralized patronage network and its violent appropriation of clandestine economies and state assets, not through some customary standing as head of a clan.

To be continued...

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