Representatives of IGAD's member states celebrate the anniversary of its foundation

Sally Healy is Associate Fellow, Africa Programme at Chatham House – she is the author of the recent report Hostage to conflict: prospects for building regional economic cooperation in the Horn of Africa

The IGAD (Intergovernmental Authority on Development) region continues to raise the bar on standards of regional activism and intervention. Political manoeuvring around Somalia has intensified. Uganda, Burundi and Kenya all have troops on the ground and Djiboutian forces will join them shortly. At its recent summit, IGAD called upon Ethiopia to support operations in the country.

In Sudan too there are Ethiopian forces on the ground, operating in a peacekeeping role in Abyei on the disputed border. Tremendous unresolved problems exist between the governments of Sudan and South Sudan, which are not making much headway in negotiations to resolve them.  Meanwhile, relations between Ethiopia and Eritrea remain frozen.

Situation normal.

Regional insecurity has become such an entrenched feature of politics in the Horn of Africa that it’s sometimes hard to imagine what peaceful cooperation in the region would look like. But we should not lose sight of regional economic relations. There is an interesting juxtaposition of two things – the dynamic of conflict and disintegration in the political life of the region and the growing logic of interdependence and integration in many sectors of its economy.

Conflicts in the Horn invariably have a regional character and tend to involve neighbours in a highly interventionist role. Conflict inside any one country or between any two will always have important ramifications for all the rest. As in Somalia, neighbours get drawn in to support their own protégés.

Conflicts in the Horn also have a tendency to result in the break up of states. It started with the separation of Eritrea from Ethiopia in 1993, followed by the independence of South Sudan this year. Somaliland is another potential case and has been running its affairs separately from the rest of Somalia for 20 years.

The point about these separations is that while they might appear to solve the problem of how to live together politically, they don’t provide solutions to the underlying problems of how to live together economically. The disintegration of existing states has accentuated the geo-political dependencies among the countries of the region, not least by producing land-locked countries.

The IGAD sub-region now possesses three of the world’s 48 land-locked countries (S.Sudan, Ethiopia and Uganda), two of them created in the last twenty years as a result of irreconcilable political differences. The economic challenges they face as landlocked countries creates interdependence around access to ports.

Ethiopia’s imports and exports have expanded rapidly in the last ten years and so has the port of Djibouti on which it depends. Good political relations are an economic necessity for both countries, but in the long run Ethiopia’s expanding economy needs port options. One of the economic questions that hang over the region is whether, when and how Ethiopia might return to using the Eritrean port of Assab on which it relied for well over 80% of its trade before 1998.

Politics tend to overshadow the rational use of seaports and the region’s interlocking economic potential: Ethiopia has no desire to trade through Assab, preferring to stifle Eritrea economically. Berbera’s potential for regional development is restricted by non-recognition of Somaliland. Even Djibouti is not immune, with hopes to develop the port as a major transhipment centre compromised by the scale of piracy along the coast.

Another example of economic interdependence – the sharing of energy resources – is equally constrained.  The division of Sudan, the region’s sole oil producer, has placed an estimated 75% of the country’s oil reserves in South Sudan. Yet much of the infrastructure needed for extraction, including the pipeline and oil refining capacity, has remained in Sudan and arrangements for resource sharing and joint exploitation of oil are not agreed. So far, South Sudan and Sudan are being held together by their common need for the oil revenues on which each depends. But politically they remain at loggerheads and – like Ethiopia and Eritrea – either side might decide to turn their economic interdependence into a weapon.

A third network of regional interdependence centres on regional livestock production and trade. The Ogaden region of Ethiopia is at the heart of a vibrant livestock economy that spreads across Somalia and into Kenya, providing a vivid example of a regional economy in full swing. This economy functions largely outside formal economic institutions and has coped exceptionally well with the political turbulence of the region. But steps that could strengthen the trade, including disease control and certification, are difficult to achieve because of poor political relations, security problems and trade blockades.

In theory, regional economic integration provides an answer to all this.  Africa’s regional economic communities – including IGAD – are part of an institutional landscape, backed by international agencies and outside donors, especially the European Union, which see them as important mechanisms for achieving economic development and improving peace and security.

In practice, the template for the African Economic Community does not fit very well with the economic and political realities of the Horn. The standard regional economic integration model – based on trade in the first instance – requires models of statehood, standards of regulation and levels of cooperation that don’t actually exist across the region. At the same time the model seems unable to capitalise on the wealth of informal trade and cross border interconnection that does actually exist.

Where the Horn of Africa demonstrates true regionalism is in the strength of its informal cross-border trade. This is built on the close social bonds linking people across borders and underpinning the trading networks that play such a vital part in economic life. The success of the informal trade networks shows the economic value of cross-border linkages and the neglected potential of the border communities themselves.

The security concerns that engulf this region encourage the closure of borders and seek to clamp down on freedom of movement and open commerce. The logic of economic integration would point in the opposite direction, and would benefit from all the connections that exist.

Regionalism may seem a political impossibility but could prove to be an economic necessity.