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Members of the Hargeisa Basketball Girls team wrapped in the Somaliland flags walk on Road Number One during the Independence Day Eve celebrations in Hargeisa, Somaliland, on May 17, 2024.
Why does a US senator want to recognize Somaliland?
Last week, US Sen. Ted Cruz (R-TX) became the latest American conservative to voice support for Somaliland, as he publicly urged the Trump administration to recognize it as a country.
“Somaliland remains committed to forging closer ties with the US and is actively engaged in enhancing military cooperation, counterterrorism efforts, and economy and trade partnerships,” Cruz wrote in a letter to the White House. “To do so to the greatest effect and the greatest benefit to American national security interests, it requires the status of a state.”
So why is Cruz interested in a small, de facto state on the east coast of Africa?
First, a refresher on Somaliland. Even if you didn’t know already, you may have guessed from the name that Somaliland is formally part of Somalia, sitting in the northern part of the country and bordering Djibouti and Ethiopia.
It was originally a British protectorate, while the rest of Somalia was an Italian one, but the areas were lumped together when Somalia gained independence in 1960. Thirty-one years later, Somaliland separatists helped to depose the Somali military leader Siad Barre, and they seized on the opportunity to declare independence.
The country, now with a population of roughly six million people, has been operating as an autonomous region ever since. In 2001, voters approved the constitution, establishing a democratic state. Though the functioning of the democracy isn’t perfect, opposition leader Abdirahman Mohamed Abdullahi won last year’s election and there was a smooth transition of power – not everyone can say that, whether in East Africa or other parts of the world.
However, not a single country has formally recognized Somaliland as a state, drastically limiting what it can achieve financially – it is ineligible for loans from the World Bank and the International Monetary Fund, even though it is more economically and politically stable than Somalia.
So why is Cruz interested? First, Somaliland’s location gives it strategic importance. It lies along the Gulf of Aden, right next to the narrow Bab al-Mandeb Strait, through which nearly a third of the world’s shipping passes. It is also across the water from Yemen – if the US had a presence in Somaliland, it could keep a closer eye on the anti-American Houthi rebels who operate there.
“Somaliland has emerged as a critical security and diplomatic partner for the United States, helping America advance our national security interests in the Horn of Africa and beyond,” Cruz wrote in his letter.
But this is also about China, which Cruz references in his note. Somaliland’s location also puts it in close proximity to the growing Chinese military presence in Djibouti. What’s more, Somaliland’s own claims to independence mirror those of Taiwan, who have become an ally to the de jure nation – a top Taiwanese official attended Abdullahi’s inauguration in December. With China positioning itself as a defender of Somalia’s overall sovereignty of the area, Cruz – and many of his fellow Republicans – wants to be at the other end of that.
There’s just one problem. Somalia and its neighbors are littered with security issues, with extremist groups like Islamic State and al-Shabaab – both Houthi allies – sowing chaos in the region, and wars raging nearby in Sudan and Ethiopia. If the US recognizes Somaliland, it could undermine efforts to keep a lid on violence in the region.
There are two reasons for this. First, recognition could undermine the Somali state’s attempts to root out extremism – the government is already a weak one, and al-Shabaab would use such a move to recruit more foot soldiers, something the Biden administration feared.
Next, the US might find itself on the sidelines in terms of tackling extremism in the area. Washington has worked closely with Mogadishu to limit threats from militant groups, especially al-Shabaab. If it legally approves of Somaliland’s status as a country, it will anger Somalia – and potentially one or two other states – and potentially push Mogadishu to focus on issues outside of counterterrorism.
On top of all this, there is a melange of interests in the Horn of Africa from some Middle East & North Africa countries that the US won’t want to anger. In particular, Egypt is a major ally to Somalia, and Trump wouldn’t want to dismantle his relationship with Egyptian President Abdel Fattah el-Sisi, with whom he shares a close bond.
All to say: it won’t be such a “Cruz” in the park for the US to recognize Somaliland.
Puntland Security Forces parade newly trained soldiers and equipment to combat ISIS in Bosasso, Bari Region, Puntland region, Somalia, on Jan. 30, 2025.
US airstrikes target Islamic State stronghold in Somalia
In a post on X, Somali President Hassan Sheikh Mohamud thanked Trump for “the unwavering support of the United States in our shared fight against terrorism … Your bold and decisive leadership, Mr. President, in counterterrorism efforts is highly valued and welcomed in Somalia.”
Puntland Security Forces have been carrying out operations against IS since December. While less active than the al-Qaida-linked al-Shabab, Somali officials have reported increased IS activity in recent months, with hundreds of fighters operating in the Cal Miskaad Mountains. IS in Somalia is led by Abdul Qadir Mumin, a Puntland native with ties to the global IS network. Analysts suggest his survival in past US strikes had bolstered his status within the group.Turkish President Tayyip Erdogan poses with Somali President Hassan Sheikh Mohamud and Ethiopian Prime Minister Abiy Ahmed following a press conference in Ankara, Turkey, December 11, 2024.
Turkey mediates key agreement to defuse Ethiopia-Somalia conflict
Ethiopian President Abiy Ahmed and Somali President Hassan Sheikh Mohamud announced a critical agreement to end a yearlong dispute over Ethiopia’s access to the Arabian Sea. The leaders announced the deal in Ankara after marathon talks mediated by Turkish President Recep Tayyip Erdoğan, who is increasingly emerging as a key player in the Horn of Africa.
What’s the conflict all about? Ethiopia has been the most populous landlocked country in the world since Eritrea broke away in 1993, and the lack of a major seaport has held back development. In January, Ethiopia signed a deal to lease a port from a breakaway region in Somalia, Somaliland, in exchange for recognizing its independence. In response, Somalia threatened to expel Ethiopian troops that are in the country to fight al-Shabab terrorists, and some feared the conflict could escalate into an echo of the devastating 1977-78 Ogaden War.
Why is Turkey involved? Ankara has deep ties to both sides in the conflict and an abiding interest in keeping the peace between them. Turkey’s largest overseas military base is in Somalia, where Turkish troops have trained thousands of their Somali peers. Turkey also backed the Ethiopian government during the 2020-22 Tigray war by providing feared Bayraktar drones.
“The agreement will help make Turkey into an even more relevant power in the region, with Ankara pitching itself as a security partner for African countries,” says Eurasia Group expert Emre Peker.
Turkish businesses have invested over $2 billion in Ethiopia as well, a figure surpassed only by China.
“Aside from expanding its diplomatic and political clout in Africa, the deal will also help Turkey build more commercial inroads in the region,” says Peker. “Ethiopian access to Somali ports could facilitate more trade, and Turkish businesses will benefit from potential preferential treatment on marquee infrastructure projects.”
What now? Representatives will meet again in February for “technical talks” that are meant to hammer out the details of port access.Jubbaland forces carry their ammunitions during a security patrol against Islamist al Shabaab militants in Bulagaduud town, north of Kismayu, Somalia.
Election dispute ignites military confrontation in Somalia’s Jubbaland
What happened? When Jubbaland ignored the federal government’s opposition to the election, Mogadishu issued an arrest warrant for Madobe, and Jubbaland responded by issuing a reciprocal warrant for President Hassan Sheikh Mohamud.
Somalia's defense minister accused the Jubbaland forces of initiating the clashes on Wednesday, but the federal government responded with drone strikes, and both sides are reporting casualties.
Why it matters: The fighting is taking place in a strategically important region. Jubbaland, one of Somalia’s five semi-autonomous regions, is situated adjacent to Kenya and Ethiopia. It is Somalia’s breadbasket, its shoreline delineates a contested maritime zone with Kenya, with potential oil and gas deposits, and Kismayu is a key port.Iranian President Masoud Pezeshkian stands at attention while armed military personnel from the Islamic Revolutionary Guard Corps parade during a military parade commemorating the anniversary of the Iran-Iraq War in Tehran, on Sept. 21, 2024.
Hard Numbers: Iran’s elite fighters go off the grid, Cognac takes on China, Egyptian weapons flood Somalia, Argentines empty their mattresses, “Noise shouter” wins Kiwi election
800: Some 800 protesters, many on tractors, hit the streets in the southwestern French town of Cognac this week, in a “spirited” display of anger at the possibility of Chinese tariffs on European brandy. Losing the huge Chinese market could cripple the struggling Cognac industry. Beijing and Brussels are locked in a series of trade disputes over European food products and Chinese electric vehicles. The EU on Monday filed a World Trade Organization challenge against China’s recent investigation of European dairy goods.
2: A second Egyptian shipment of heavy weapons has arrived in Somalia, in a move that could stoke simmering tensions between both countries and neighboring Ethiopia. Egypt and Ethiopia are at odds over a major Ethiopian dam across a Nile tributary, while Somalia is angry at Ethiopia’s support for separatists in the region of Somaliland. Against that backdrop, Egypt and Somalia signed a security agreement earlier this year.
8 billion: Since Argentina’s radical libertarian President Javier Milei took office last December, chainsawing his way through government spending and imposing severe austerity measures, the country’s foreign currency deposits have surged by $8 billion. The data suggest growing confidence in his ability to stabilize an economy that has bounced from crisis to crisis for decades, though the upcoming expiry of an amnesty for hidden currency is also part of the story. See our exclusive interview with Milei here.
50,000: With more than 50,000 votes counted, the results are in: The hoiho, also known as the “yellow-eyed penguin,” has won New Zealand’s bird of the year election, seeing off a dark bird challenge from the karure – an all-black species of “goth” robin. The winner, whose name means “noise shouter” in the Maori language, is thought to be the world’s rarest penguin. It is also one of its most endangered, suffering a population decline of nearly 80% over the past 15 years.
Demonstrators toss a trash bin during an anti-immigration protest, in Rotherham, Britain, August 4, 2024.
Hard Numbers: Far-right unrest in UK, Nikkei plunges, Tragedies & infrastructure woes in China, Hawaii fire settlement reached, al-Qaida affiliates stir trouble in Somalia & Niger, Olympic firsts
90: Police arrested 90 people as anti-immigration, far-right protesters took to the streets of UK cities this weekend, sowing chaos in Hull, Liverpool, Bristol, Manchester, Stoke-on-Trent, Blackpool, and Belfast. Racial tensions spiked after the murders of three young girls at a Taylor Swift-themed party in Southport last week. The suspected killer was falsely rumored to have been a Muslim immigrant (he was, in fact, born in Wales to Rwandan Christian parents). This weekend’s violence and clashes with police led to scores of arrests, and PM Keir Starmer has vowed to tackle the “far-right hatred” sowing unrest on British streets.
12: Japan’s stock market had its worst day in 37 years on Monday, dropping 12% on news of a possible US recession. This followed the Nikkei’s 5.8% drop from Friday and is leading a global stock-market selloff today amid fears that the Federal Reserve may not have responded quickly enough to a slowing US economy by cutting interest rates.
2: Two people were killed in a tunnel collapse in southwestern China on Saturday. The tragedy occurred just two weeks after at least 38 people died after a bridge in northwestern China partially collapsed, plunging vehicles into a river. Two dozen people remain missing from that incident, and both accidents have raised concerns about the country’s infrastructure.
4B: Hawaii Gov. Josh Green’s office has announced that a deal in principle — for just over $4 billion — has been reached to settle roughly 450 legal cases linked to the August 2023 wildfires in the Aloha State. Seven defendants were named in the suit — including the State of Hawaii, County of Maui, Hawaiian Electric, Kamehameha Schools, West Maui Land Co, Hawaiian Telcom, and Spectrum/Charter Communications — over the blazes that destroyed the historic town of Lahaina and killed more than 100 people.
32: Somali authorities say al-Qaida affiliate al-Shabab killed 32 people and injured scores more Friday at a beach hotel in Mogadishu. Another seven people were reportedly killed by a roadside bomb in an attack just outside the capital on Saturday. Somali President Hassan Sheikh Mohamud declared a “total war” on the militants last year, but al-Shabab still controls parts of the country, and Friday’s violence notably followed Somalia’s third phase of a drawdown of peacekeeping troops under the African Union Transition Mission.
2: In a video released on Friday, two men claiming to be Russian nationals say they were taken captive by al-Qaida-linked militants in northeastern Niger. One man called himself Yury and said he was a geologist working for a Russian firm in the region when armed men detained him. This could be the first time jihadis have kidnapped Russians in the Sahel, but outlets have yet to confirm the identities of the men.
3: We’ve seen a lot of great footage from the Summer Games in Paris this past week — everything from Simone Biles and Katie Ledecky racking up their piles of gold to Snoop Dogg’s Greatest Hits (and a swim lesson with Michael Phelps). But three countries have celebrated some impressive Olympic firsts this past week. Julien Alfred won the first-ever Olympic medal for St. Lucia on Saturday, racing to gold in the women’s 100-meter dash. That same day, Thea LaFond did the same for Dominica, nabbing the Caribbean island nation its first medal — and the gold — in the women’s triple jump. And Kaylia Nemour won Algeria its first gold in gymnastics, beating the competition on the uneven bars on Sunday.
How to tackle global challenges: The IMF & World Bank blueprint
The International Monetary Fund and World Bank’s Spring Meetings in Washington have told a tale of two economies: In the developed world, inflation is falling, and recession looks unlikely. But many of the world’s poorest countries are struggling under tremendous debt burdens inflated by rising interest rates that threaten to undo decades of development progress. That means these key lenders of last resort have their work cut out for them.
The good news? There’s a proven model, as GZERO Senior Writer Matthew Kendrick discussed with Tony Maciulis at a Global Stage event while reporting on the meetings. Somalia, once the byword for a failed state, managed to implement massive reforms to its financial system to meet the guidelines of the IMF’s Highly Indebted Poor Countries Initiative.
“Because they met those guidelines — while still in a very fragile environment where they were fighting Islamic extremists in the country, dealing with semi-autonomous zones in the north — they managed to discharge 90% of their debt,” said Kendrick. “It's proof that even in very fragile countries, if, as the Somali finance minister said yesterday, you build these projects into nationally unifying efforts to build a better future, they can have tremendous success.”
Kendrick also cited comments from experts calling for the IMF and World Bank to change how they view humanitarian work more generally and not back away from countries amid war. “Conflicts are becoming a day-to-day part of our lives all over the world,” he says. “That means that the IMF and World Bank, in order to make progress on development, have to figure out ways to work with the institutions in these countries as they are also in conflict.”
For more of our 2024 IMF/World Bank Spring Meetings coverage, visit Glogal Stage.
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- What We're Watching: Nigerians vote, Biden's World Bank pick ›
- World Bank economist: The poorest are getting poorer globally ›
- With electric bills soaring, should the EU cap natural gas prices? ›
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The Bland Bombshell and the Big Banks
Is there anyone more bland, more powerful, and less recognizable than Federal Reserve Chair Jerome Powell? He makes money moves more than Cardi B, and yet most people wouldn’t recognize him if he were sitting on their lap in the subway.
Why do relatively obscure banker meetings matter? Fair question, and it’s precisely why our GZERO team in Washington, DC, is covering the IMF-World Bank spring meetings this week.
For Masters of Monetary Policy like Powell, being bland is a strategy, not a characteristic. They speak in a purposely arcane language that requires near Bletchley Park decoding powers because everything they say makes news that impacts markets. This, in turn, affects things like your mortgage, your investments, and your grocery bill. It also impacts global poverty, which ought to make a lot more news. So understandably, they have to be careful and neutral to avoid panics or bouts of enthusiasm and ensure their signals leave lots of room for interpretation. But don’t mistake bland for lack of consequence. In global banking, bland is the brand, but influence is the purpose.
What have you missed so far?
Powell had a major bland moment at the Wilson Center’s Washington Forum on the Canadian Economy, which coincides with the spring meetings, where he hinted he would delay dropping interest rates because US inflation is proving more stubborn than predicted. “The recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence,” he said, as the finance world listened to him emphasize every SYL-la-ble.
Then, in case anyone missed it, he took out the verbal highlight pen. “We can maintain the current level of restriction for as long as needed.” Whoa. Treasury yields moved higher that very moment, and he wasn’t even done speaking. Translation for those not steeped in Bland Banker Speak: Interest rates are gonna stay higher for longer – at least until the inflation rate hits the target goal of 2%. Govern yourselves accordingly.
That news got a tiny corner of social media all ginned up, giving us the world’s first – and perhaps last – Federal Reserve Meme: Check out this AI-generated Jerome Powell hyped on rate cuts. Maybe Blands really do have more fun.
Meanwhile, Bank of Canada Gov. Tiff Macklem, who was on the same panel with Powell, hinted he might go in the other direction – and having had many conversations with him over the years, I can say that Macklem isn’t bland at all. Just last week, he held the key interest rate at 5% because inflation had centimetered up a titch, but he still suggested a rate drop was “within the realm of possibilities” as early as June.
What would that mean? For one, if Canada drops rates faster than the US Fed, the Canadian dollar would likely weaken considerably, so depending on which way you travel, things could get either a lot cheaper or more expensive.
In short, everything central bankers say makes a difference to millions of citizens, and still, most folks only pay scant attention to talk about inflation and interest rates close to home – not internalizing how much impact these decisions have on major issues like global poverty. For example, GZERO’s own Matthew Kendrick has been reporting from the spring meetings this week, covering the impact of inflation on the most vulnerable economies like Somalia and what is being done to help. You can read his surprising look at the Somali success story on debt relief here.
But if world bankers are all so smart, why are one in three countries worse off than in 2019? Why are so many falling back into poverty post-COVID? To find out, our Head of Content Tony Maciulis sat down with Ayhan Kose, the World Bank Group’s deputy chief economist, who told him, “When the food price goes up, the price of oil goes up. That has significant implications for these economies.” He also noted that some countries have experienced “the weakest growth rate on average since the 1990s.” What are the solutions? Watch Tony’s interview here.
News about IMF and World Bank financiers doesn’t often make the front page because it’s so complex, often depressing, and … well, kinda bland. There are other riveting events, like Donald Trump’s first criminal trial, the war in Ukraine, and Iran launching missiles at Israel to grab our attention, as they should.
But spare a moment for the folks who live in Blandlandia – those people at the IMF and World Bank spring meetings. They are participating in panels like “The Path for Taxing the Super-Rich – Towards a Progressive Global Taxation Agenda,” “Biden Pauses LNG; COP 28 Fossil Fuel Phase-Out Decision – Is World Bank Lagging on Fossil Fuels?” and even “The Polycrisis – How Unchecked Public Debt Fuels Corruption and Bad Governance.”
Beneath the bland, the story of our world unfolds. Since 1944, when both financial institutions were established, the World Bank itself has funded over 12,000 programs focused on economic development and reducing poverty. Has it worked? The record is mixed.
There have been big wins – like the reconstruction of Bosnia after the war, or working on debt relief programs, like Matt described in Somalia. But the World Bank also set a goal of eliminating extreme poverty by 2023, and its leaders admit they are not even close.
Meanwhile, the IMF, whose mission is to “firefight” big, macro-economic emergencies, like a currency collapse, comes in for much harsher criticism. Its Structural Adjustment Programs – loans to low-income countries in distress – have been subjected to extensive research, often proving that they have kept people in countries like Zimbabwe or across Latin America in poverty while enriching investors. Are these Western-designed programs just a neo-liberal form of colonialism, as some suggest, or pragmatic ways to get countries onto the path of economic development? The debates are so divisive that China has moved into the space in countries that no longer trust the IMF, using its Belt and Road Initiative to invest in infrastructure and push its own influence. So, politics are driving this as well.
The IMF and World Bank may not always make things better, and there is even paranoia right now that Donald Trump, if he wins in November, might withdraw the US from the World Bank, which would devastate developing economies. Still, these two organizations are relevant and demand our attention.
At GZERO, we are committed to covering these topics and making them accessible and interesting. So please tell us what you think. If you have suggestions for things we ought to cover, or questions about events like the IMF-World Bank spring meetings, send us a note here, and we will post answers to some of your key questions next Thursday.
Thanks for your remarkable attention to all these matters, and now, let’s get at the rest of the news.
– Evan Solomon, Publisher