The Impact of Local Small and Medium Enterprises and Foreign Multinational Corporations on Peacebuilding and State-formation: Case study of Somaliland

Louca le Guillou

Student thesis: Master thesis


This thesis tends to bridge the gap in the literature between the existing knowledge concerning the arguable success of Somaliland regarding peacebuilding and stateformation; and how much of it can be attributed to the private sector contribution. In the context of diplomatic non-recognition and post-war recovery, the thesis examines various local companies and their role in peacebuilding and stateformation. Also, the role of the only foreign direct investment (FDI) from a multinational corporation (MNC) gave empirical evidence to assess the specificities and impacts of investments in such contexts. The principal findings are that most of the state-formation participation of the local companies was made through loans rather than paying the required amount of taxes for the consolidation of strong public financial institutions. The state of Somaliland always set diplomatic recognition and safety as priorities and decided to spend the majority of its budget on defense expenses. Therefore, this research found that if SMEs want to effectively participate in peacebuilding, these local companies should firstly consider participating in state-formation through tax collection. Secondly, the protectionist economic measures induced by the lobbying practices from the powerful local business elites have participated in the lack of foreign investments, hence hindered the economic growth of the state. These protectionist ideologies protected Somaliland from multinational corporations’ economic interests and the potential risk of disturbing the fragile power balances of the hybrid political order (HPO) of the state. Therefore, the unrecognized state beneficiated from a trade-off promoting security to the expense of sluggish economic growth. Thirdly, in the peacebuilding academic literature, it is often asserted than international agencies are pushing for the right peacebuilding practices, often liberal and that the local agencies are often linked with a form of violence and “backwardness”. (Richmond, 2013). However, the case of the investment of the Emirati DP World investment

EducationsMSc in Business, Language and Culture - Business and Development Studies, (Graduate Programme) Final Thesis
Publication date2020
Number of pages90
SupervisorsMaha Rafi Atal