So Much Harder for Unrecognized States such as Somaliland to Combat Poverty

Political and economic isolation are the overarching characteristics of the world’s many unrecognized and de facto states. Caught in a catch-22 of non-recognition, these countries are often left at risk of poverty with little help from the international community.

Recognition is a valuable commodity to de facto states like Abkhazia and Somaliland; akin to legitimacy, it can make the difference between prosperity and failure. Without recognition, resulting non-existent states face impossible obstacles to development. Persistent corruption and inconsistent public services, accompanied by restricted foreign trade and limited travel rights turn unrecognized states to the patronage of powerful neighbors as they wait for recognition, sometimes for decades.

In recognized states, foreign aid from allies and international organizations would undoubtedly step in to help. But a lack of legitimacy and stability and disapproving neighbors blocking their membership to multilateral groups like the U.N. and International Monetary Fund (IMF) remain obstacles to any financial intervention.

Poverty in Unrecognized States: Somaliland and Abkhazia

Somaliland – First a British territory and later a brief addition to neighboring Somalia, Somaliland was estimated to be the world’s fourth poorest country in 2012. Only 28 percent of rural households currently have access to improved water sources, according to UNICEF.

Experts explain that “despite significant wealth in natural resources” including a massive agricultural industry, Somaliland lacks investment, is “vulnerable to humanitarian disasters,” including frequent drought and susceptible to poverty from high youth unemployment. The country currently gains up to 70 percent of its GDP in remittances from the Somali diaspora, but this financial source is threatened as emigrants remain overseas for further generations.

Abkhazia – The unrecognized state of Abkhazia has been caught in a tangled relationship with the Russian Empire, USSR and Georgia for centuries. After a devastating war with its parent state of Georgia in the 1990s, Abkhazia declared independence and has suffered from economic blockades and embargoes, frequent Georgian invasions and human rights abuses.

Politically, Abkhazia has been much more successful than other unrecognized states, but living conditions have led to riots. In 2003, the UNDP found that in the 15 years since the war, Abkhazia’s GDP had fallen by up to 90 percent, and unemployment had reached a staggering 95 percent in many regions.

Isolation is the country’s biggest problem, with reliance on neighboring Russia for major financial support. In fact, 40 percent of the state budget comes from Russian loans, although this is reportedly a temporary, emergency measure.

Out of the International Aid Stream

Countries which have declared independence from larger neighbors are seen by the international community as disputed territories and a dangerous precedent, not fit to interact with legitimate states. Funds and resources from multilateral organizations, like the World Bank or humanitarian branches of the U.N., are therefore often out of the question in these cases.

Experts cite the case of Eritrea, which was refused aid from the IMF and World Bank before it was recognized, and the lack of U.N. aid to Somaliland despite crippling poverty. There is simply no framework in place to provide financial aid to countries which are not members of multilateral organizations and which technically, do not exist.

It is often difficult for aid and officials from NGOs and foreign organizations to access these areas as well. Conflict and travel restrictions cause trouble. Restrictions set by Russia made Abkhazia difficult to access during the Sochi Winter Games.

Getting money into an unrecognized state can often be complicated and expensive as well.

Breaking Through Limbo

There are also increasing efforts to help develop unrecognized states like Somaliland and Abkhazia from ‘the outside in’. In 2018, Somaliland received $10 Million (CAD) in grants from the Canadian government for agricultural development and initiatives to fight child malnutrition. An improved water system serving 800,000 from UNICEF and the EU also marked a positive improvement in the country’s international relationships.

Abkhazia has seen a surge in the presence of NGOs in recent years, with over 100 registered in 2005. Programs from international organizations like Medicins sans Frontières, UNHCR, UNICEF and UNDP have helped educate Abkhazians about the importance of civil service and provided post-conflict rehabilitation (though without recognizing Abkhazian independence).

Within the government, plans are also underway to introduce cryptocurrency, circumventing financial restrictions and sanctions thus opening up opportunities for foreign investment.

However, representation presents what is perhaps the greatest potential for eradicating poverty in unrecognized states, as specialized groups like the Unrepresented Nations and Peoples Organization (UNPO) are helping them advocate for themselves. A kind of miniature U.N., the UNPO provides these states with the opportunity to engage with each other in diplomacy, an important factor in gaining international acceptance, U.N. membership and all of the advantages they bring.

By Marissa Field