The Paradox of Progress: Foreign Investments, Kinship, Statebuilding, and Conflict in Somaliland

This article explores the complex interplay between foreign investment, statebuilding, and kin-based political structuresand conflict, using Somaliland as a focal point. While foreign investments are often viewed as mechanisms to bolster governance and foster economic development, they can also exacerbate existing socio-political tensions. We argue that this has been the case in Somaliland. By tracing the historical and structural shifts in Somaliland’s governance from consensus politics to a more centralized model influenced by external economic engagement, we trace how investment-driven development intersects with marginalisation, in some cases contributing to destabilisation. This culminated in a conflict over the strategic town of Lasanod from late 2022 onward, during which the Somaliland state lost control of almost a third of its territory. We situate these dynamics within wider debates on extraversion, showing how external rents are mediated through kinship institutions that shape both co-optation and confrontation. Understanding the role of kinship in these processes is essential for more nuanced theories of statebuilding and conflict in Somaliland and similar states seeking international recognition.