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Oil to cash in Somaliland: a debate whose time has come

Published online by Cambridge University Press:  26 November 2018

Scott Pegg
Scott Pegg*
Affiliation:
Department of Political Science, Indiana University Purdue University Indianapolis (IUPUI), 425 University Boulevard, Indianapolis, IN 46202USA
*
Email: smpegg@iupui.edu
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Abstract

Somaliland might start producing oil in 2019. Yet, it has done little to prepare for the arrival of oil revenues which could exceed its current annual budget. Although Somaliland has been largely peaceful for two decades and recently inaugurated its fifth president after holding a democratic election, it remains entirely unrecognised. Oil revenues could positively transform Somaliland's fragile political economy, but they also place it at significant risk for a political resource curse that could threaten its democracy, peace and political institutions. Oil to cash or the direct distribution of oil revenues to citizens has been posited as a solution to the political resource curse. Somaliland has many of the elements necessary to make oil to cash work in place. Several factors combine to make Somaliland both potentially receptive to oil to cash and uniquely positioned to benefit from it. Interviews with political elites demonstrate receptiveness to the idea. Sample revenue calculations from other African oil producers highlight just how such a system could work to benefit Somaliland.

Type
Research Article
Information
The Journal of Modern African Studies , Volume 56 , Issue 4 , December 2018 , pp. 619 - 643
Copyright
Copyright © Cambridge University Press 2018 

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Footnotes

I would like to thank the editors and, especially, two anonymous reviewers for their many helpful comments on an earlier version of this article. Thanks also to the IU School of Liberal Arts at IUPUI for sabbatical funding and to everyone who discussed these ideas with me in Somaliland, only some of whom are cited here.

References

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