untland, which is self-described as the "Puntland State of Somalia," has been considered by analysts and observers to be one of the more politically stable regions in that fractured country. During the past two months, however, Puntland has experienced a bout of unaccustomed political instability that culminated on July 26 in a street demonstration in its capital Garowe that ended in protestors throwing stones at its president, Mohamud "Adde" Muse, who had attempted to mollify the crowd, which was demanding an end to hyper-inflation. Puntland has begun to come into play in Somalia's tortured web of conflicts.

With a population of approximately 2.5 million, Puntland occupies the northeastern portion of the area compromising the post-colonial Somali republic, which in 1960 joined the former Italian Somaliland and British Somaliland into a single state. Puntland is socially dominated by the Darod clan family, with the most power residing in the Majerteen sub-clan of the Darod. Its major industries are livestock and fisheries, and exploration for oil and natural gas deposits is projected, as PINR detailed in its July 23 report. [See: "China Invests in Somalia Despite Instability"]

Puntland came into being in August 1998, when Majerteen warlord Abdullahi Yusuf Ahmed -- now president of Somalia's internationally recognized Transitional Federal Government (T.F.G.) -- engineered the autonomy of the Nugal, Karkar, Bari and part of the Mudug regions. In 2002, Puntland forces occupied Darod-dominated parts of the Sool, Sanaag and Togdheere regions, which are claimed by Somaliland -- the territory of the former British Somaliland, which declared its independence from the rest of Somalia in 1991 and has failed to gain international recognition.

During its nine years of autonomy, Puntland has developed a political system characterized by a strong presidency and a weak legislature, which is not organized into parties. Until he assumed the T.F.G.'s presidency in 2004, Yusuf was Puntland's strongman, serving as its president from 1998 until 2001, and then from 2002 through 2004, after he militarily defeated his rival Jama Ali Jama, who had resisted Yusuf's efforts to extend his original term. Muse was elected to Puntland's presidency by its parliament in 2005 and has attempted to follow the presidential model set by Yusuf.

Overhanging and forming the context of Puntland's politics is its equivocal political and legal status. Unlike Somaliland, Puntland's autonomy is officially provisional, with reintegration with the southern regions of the former Italian Somaliland to be achieved after a successful process of national reconciliation. Standing between independence and integration, Puntland's relations to the other parts of the original Somali republic are complex and uncertain. It is in an incipient state of war with Somaliland over the disputed territories, and it has a vital interest in keeping the gains that it has reaped from autonomy in any wider political settlement with the T.F.G., to which it is closely tied through Yusuf.

For the first time since it declared its autonomy, Puntland is now faced with the possibility of a day of reckoning, as a process of reconciliation gets underway in the south and the T.F.G. mounts attempts to assert its authority over economic resources and security, and Somaliland asserts its territorial claims more aggressively.

As is the case throughout the Horn of Africa, the model of Puntland's politics is the political machine, in which the leader retains support by paying off allies, trying to avoid marginalizing any groups sufficiently to drive them into effective opposition, and attempting to suppress opposition if it arises. That formula is viable when there is enough largesse to go around and when the machine is well disciplined, neither of which is true for Puntland, where Muse -- under pressure from the outside -- confronts increasing internal opposition sparked by economic and security failures. The events of the past two months reveal that Puntland's apparent stability concealed underlying tensions that have now surfaced.

An Accumulation of Divisive Issues

At the heart of Puntland's present instability is a failure of governance that spills over into a host of interrelated issues involving the economy, control of resources, security, governmental functioning and the de jure and de facto status of the sub-state.

The most pressing problem confronted by Muse's administration is hyper-inflation, which triggered the unprecedented July 26 protest demonstration in Garowe that was organized by civil society organizations and had the support of the business community. Since June, the value of the Somali shilling has fallen from 16,000 per US dollar to 21,000, causing prices of staples to rise by a third. The inflation has been blamed on the massive counterfeiting of shillings by an operation in Puntland's major port and commercial center Bossasso, with administration opponents claiming that it is supported by the government, which is strapped for funds, and Muse claiming that it is the work of local and southern Somali businessmen seeking to "undermine the economy."

On June 14, Muse attempted to freeze the shilling-dollar exchange rate. His effort failed, and on July 3, traders in Bossasso staged a strike and protest march, charging that the government was using the counterfeit money to pay its employees, whose wages were months in arrears. On July 25, as demonstrators gathered in Garowe, the government announced that its security forces had confiscated the printing presses used to produce the counterfeit shillings, but that did not head off the protests. Muse responded by claiming that much of the problem was caused by a rise in the prices of imported goods.

Even if Muse's administration is not complicit in the counterfeiting, its inability to control hyper-inflation shows the weakness of the government and has exposed it to emboldened grassroots opposition that is unlikely to subside as long as the situation persists.

Coupled with the possibility of Puntland's reintegration into Somalia proper, which is still remote, the financial problems of the government have led to efforts by Muse to exert control over the sub-state's economic resources, spurring further conflict. On May 27, Muse finalized a deal with the Arabian al-Jabberi enterprise, giving that firm exclusive rights for 15 years to export Puntland livestock, triggering opposition from local businessmen and dissent in parliament, which would supposedly have to ratify the deal. Disputes within Muse's administration have also surfaced over the export of natural stones to the United Arab Emirates that have similarly spilled over into parliament.

During the spring, the Puntland administration attempted to address the longstanding problem of illegal fishing in Puntland's coastal waters by arresting and detaining the crews of foreign fishing vessels. The actions led to negotiations with Yemen that culminated in an agreement over fishing rights, coastal security and human trafficking that met with immediate opposition from the T.F.G., which asserted that the Puntland administration had no authority to make inter-state agreements. On July 6, Puntland's minister of fisheries, Said Mohamed Rage, told parliament that Garowe has the authority to sign deals with "foreign partners" and that "Puntland owns its coastal resources" and will continue to do so until there is a "referendum on federalism." Rage's comment marked an assertion of sovereignty that throws into doubt Puntland's commitment to reintegration with southern Somalia within the terms of a reconciliation process.

Puntland nonetheless retains close relations with the T.F.G. and is represented at the ongoing National Reconciliation Conference in Somalia's official capital Mogadishu. Most importantly, it has dispatched thousands of troops to the south to protect the T.F.G., causing opposition in parliament and opening up security gaps. On August 1, the ninth anniversary of Puntland's autonomy, Muse announced that he had reached an agreement with the T.F.G. that Puntland's security forces would be integrated into the T.F.G.'s military, and that the T.F.G. would pay for equipping them.

The result of major deployments in the south has been an apparent loss of Garowe's grip over the territories that it annexed in 2002. On July 28, local media reported that an independent autonomous authority had been set up in the Sanaag region that would eventually place itself under the T.F.G.'s authority. On July 29, a delegation from Somaliland visited the major town of Lascanood in the Sool region to discuss development initiatives with ex-Puntland officials. The delegation vowed that Somaliland would "regularly conduct governmental affairs" in Sool now that the region has been abandoned by Puntland forces, which have either been redeployed or have deserted due to nonpayment of wages.

The accumulation of divisive issues has weakened Muse's administration and his hold on his machine, generating conflict that has played out in unprecedented parliamentary assertiveness and direct action in the streets. The interrelated yet cross-cutting pressures on Muse have forced him into a defensive posture, rendering Puntland's political future uncertain.

Muse Retreats Under Political Fire

By the end of May, opposition to Muse's policies, his authoritarian style of governing and -- as Dr. Abdeweli M. Ali precisely put it -- "performance failure" had mounted in Puntland's political class. Two months earlier, Somaliland forces had made a probe into the Sanaag region and had reportedly withdrawn only after Darod troops among the invaders defected and joined the Puntland militias. The incident showed Puntland's military vulnerability, despite its outcome. Resistance among Puntland's legislators to Muse's treatment of parliament had also been growing and was about to break out into open conflict.

At the end of May, Muse was in Bossasso trying to deal with rising crime, disaffected businessmen and piracy, and had delayed his return to Garowe, leaving Vice President Hassan Dahir Afqura to fend off questions from legislators on the salary arrears of civil servants and security forces.

On May 27, Afqura met with Puntland's parliamentary speaker, Ahmed Ali Hashi, and told him that Muse would not come to parliament to answer questions because only a "complete parliament" could legally compel his presence. As the meeting between Afqura and Hashi was going on, Muse was finalizing the livestock export deal with al-Jabberi, leading to further opposition from legislators under the pressure of local businessmen.

Muse returned to Garowe on June 5 and, on June 13, failed to show up at parliament to answer questions about security, the economy and his alleged overriding of laws. On the same day, he fired the governor of the Nugal region, Abdullahi Isse, who had reportedly leagued with the parliamentary dissenters. On June 14, Muse made his ill-fated attempt to freeze the value of the Somali shilling and, on June 16, he assumed direct control over Puntland's security forces, a move that baffled observers, since Puntland's constitution stipulates that the president is the commander-in-chief of the armed forces. Muse also remained steadfast in his rejection of a question session in parliament.

That Muse's initiatives and responses were defensive is evidenced by his delay of an expected cabinet reshuffle meant to consolidate his control over his administration. Local media attributed the delay to the resistance of powerful ministers and pressure from Yusuf who feared that a shake-up would increase instability.

On June 17, Muse gave his keynote address to parliament, focusing on health, education and economic development. Hashi replied to Muse's speech with an alternative agenda, including irregularities in the budget, consideration of agreements with foreign companies and the transition from a non-party to a multi-party political system. The stage was set for confrontation.

The slide toward instability became steeper on June 19, when the mayor of Bossasso, Khadar Haji Mire, was hit by a vote of no confidence of 19-0-2 from the city's district council, which accused him of abuses of power and of selling off public land. Refusing to accept the decision, Mire showed up at the mayor's office with two battlewagons and 30 militiamen. Muse reacted quickly, declaring the council's action illegal because neither the mayor nor an official from the Ministry of Local Government was present at the vote.

On June 21, Muse attempted to deflect growing dissent by accusing the political opposition to the T.F.G., which is based in Eritrea, of trying to undermine his administration, blaming "the Asmara group" for the Somaliland raid into Sanaag and for the district council's action against Mire, claiming that the council members had been bribed by the opposition.

Thrown into a defensive posture and bowing to pressure, Muse, accompanied by several of his cabinet ministers, acquiesced in a question session in parliament on June 24. Amid questioning on the export of natural stones and the counterfeiting of Somali shillings, the proceedings broke down into acrimony and Hashi brought them to a close before legislators had a chance to put forward all of their concerns. Local media noted that the wave of dissent was unprecedented in the history of Puntland's normally acquiescent parliament.

On June 27, another round of questioning cut deeper into Muse's performance. Legislators demanded explanations for why government workers went unpaid when the budget had been increased by 12 percent, complaining that they had been given no accounting of how funds had been spent. Muse reportedly left the session in anger.

The looming confrontation erupted on July 4, when -- on a vote of 25-16-6 -- parliament sent back the administration's 2006 budget review to Muse without approving it, citing "discrepancies" in which some agencies -- the presidency and the Ministry of Finance -- had been given more funds than parliament had allocated to them, and others -- the security forces, the Ministry of Health and the Ministry of Interior -- had been given less than had been allocated.

Reacting to his first political crisis, Muse met with his ministers on July 6 to discuss the administration's relations with parliament and its positions toward the reconciliation process, the folding of Puntland's security forces into the T.F.G. and the T.F.G.'s opposition to agreements with foreign companies and states. He promised to set up a constitutional court that had been provided in Puntland's 1998 constitution, a move that observers marked as a means to allow him to override parliament.

Tensions remained high through the second week of July, breaking into the open on July 16, when Hashi revealed that he had been given a copy of a letter from the chief justice of Puntland's High Court, Ahmed Said Abdi, requesting Puntland's attorney general to bring charges against the speaker. On July 17, Abdi resigned, only to retract his resignation on July 19, reportedly after being pressured by the administration to do so.

On July 20, a cabinet committee met with a parliamentary committee appointed by Hashi to discuss legislators' accusations that Muse, Afqura and Abdi were attempting to "silence" the speaker. The ministers apologized to Hashi and promised that Muse would issue an official apology shortly. Garowe Online reported that the attorney general had refused to press charges because he had no case against the speaker.

On July 22, Muse issued a formal apology, in return for which parliament would reinstate his ally, former speaker Osman Dalmar, who had been ousted for misconduct. That move sparked opposition from elders in the Sanaag region who accused Muse of interfering in the region's choice of its representatives. On July 23, Muse fired his security minister, Ahmad Abdi Habade, from the Sool region, who had reportedly urged the attorney general not to bring charges against Hashi. Muse also fired Puntland's auditor general, Ahmed Mohamed Hassan, from the Sanaag region, in order to gain control over his increasingly fractious administration.

On July 25 and 26, dissent burst into the streets, with demonstrations in Garowe against Puntland's hyper-inflation that ended with stones being thrown at the president. On July 28, an autonomous authority was set up in the Sanaag region, which has become a base for politicians who had been marginalized by Muse's shake-ups and policies. On July 29, a Somaliland delegation visited the Puntland-claimed parts of the Sool region for the first time since the 2002 annexation.

Meanwhile, Yusuf and Muse held discussions in Garowe on "political and security issues," with Muse promising that Puntland was ready to help the T.F.G. On August 1, Muse announced an agreement to fold Puntland's security forces into the T.F.G., giving Yusuf what he wanted and, perhaps, gaining external support to prop up his administration. In his speech on the ninth anniversary of Puntland's autonomy, Muse said that there is a "need to deal with people who oppose the administration of Puntland."

Conclusion

Although it is far too early to project the results of Puntland's unprecedented slide toward instability, it is clear that the sub-state's presidentialist system has been weakened and that Muse is on the defensive -- with each move that he makes to consolidate his power, he narrows his machine and alienates more political and social forces that become actual and potential power centers. If that process continues, Puntland will be subject to the same devolutionary cycle that PINR has repeatedly described in its accounts of Somalia's southern regions.

The causes of Puntland's current instability reside primarily in fundamental structural factors and secondarily in Muse's "performance failure." Those factors can be presented in a series of questions.

What is Puntland's juridical and political status in "Somalia"? Does Yusuf have the power to get his way and control Puntland through the T.F.G. and use it as a resource to achieve his broader political aims? How will a weakened Puntland administration cope with the problem of negotiating the tightrope act of defending Puntland's particular interests in the context of broader national reconciliation? Will internal opposition to Muse lead to the fragmentation of Puntland and the appearance of the decentralized politics characteristic of Somalia's southern regions, or will the oppositions coalesce and shift the balance of power between the branches of government relatively peacefully? How emboldened will Somaliland become in the pursuit of its territorial claims? To what degree will the political opposition to the T.F.G., which includes Jama Ali Jama among its prominent figures and is slated to hold its own national conference in September, attempt to intervene in Puntland's politics? Will nonpayment of civil servants, deployment of security forces in the south and hyper-inflation continue; and will interests disaffected by Muse's policies and investment and trade agreements harden their opposition, setting the stage for a popular movement aimed at removing the president, which can be achieved by a two-thirds majority of parliament? Will the T.F.G. and its Ethiopian ally attempt to rescue Muse if his authority collapses?

All of the preceding questions are open and they do not exhaust the relevant possibilities. They show, instead, the complexity of Puntland's political situation at the present moment. As events unfold, it appears that the underlying structural tensions shaping Puntland's politics were subdued by Yusuf and his machine, and that they have now come to the surface because Muse lacks Yusuf's political skills, military resources and power base -- he simply does not have the clout that is necessary to keep a machine functioning and, therefore, he has not been able to make a presidentialist formula work.

Occupying one-third of the territory of the original Somali republic and with one-quarter of its population, Puntland's stability is crucial to the success of broader reconciliation efforts and to stability in the Horn of Africa. If Puntland enters a devolutionary cycle, any national accord will be more difficult to achieve; if major armed conflict breaks out between Puntland and Somaliland, there will be a threat of instability spreading through the Horn of Africa.

None of the possibilities offered here has a precise probability attached to it. What is clear is that Puntland's relative stability can no longer be taken for granted by international political actors and foreign investors. Puntland has come into play.

Report Drafted By:
Dr. Michael A. Weinstein