Somaliland’s government inked a 30-year concession agreement with Dubai-based port operator DP World in 2016. The port and the Berbera corridor are being modernized as part of this project. The transformation of the Berbera corridor into an economic hub for Somaliland is being hailed as a game changer for the country’s livestock-based, remittance-dependent economy. The prevailing narrative of the Berbera corridor has been identified as Ethiopia-centric and transshipment-concentrated. As a result, alternative marketplaces have received less attention. Due to the fact that this narrative shapes the economic prospects of the Berbera corridor, inclusive economic development (meaning the inclusion of the eastern part of Somaliland into the corridor development and investment projects) in Somaliland is viewed as unachievable by both investors and key policymakers in Somaliland. The Berbera corridor’s development aims, which are centered on Ethiopia, overlook the possibilities of the Eastern corridor—the route that connects Somaliland to Somalia. The purpose of this study was to determine the feasibility of expanding the Berbera corridor to a) Eastern Somaliland in order to foster inclusive economic development and b) Somalia in order to promote trade and transit between the two countries. By establishing intra-Somali commercial links through the use of the Berbera port, Somaliland and Somalia can a) foster economic interdependence, b) integrate borderland economies, and c) mitigate potential conflicts. As a result, this report proposes that the Berbera corridor be expanded to the eastern parts of Somaliland, thereby facilitating more inclusive economic development along the corridor length-reducing the level of economic disparity between eastern and western regions of Somaliland. The Eastern corridor would not only include Somaliland’s eastern regions into the corridor’s development narrative, but would also foster a potential Somaliland-Somalia economic integration, which would a) lessen violence between Somaliland and Somalia and b) increase Somaliland-Somalia trade. Increased capital, goods, and people mobility between Somaliland and Somalia would contribute to economic interdependence, which could eventually result in both countries achieving a final political settlement – a two-state solution – that ends decades of conflict and contestation along the border.
