Business Briefs

Somalia: Piracy, Failed State Status, and the Impact on Global Trade

In any discussion of “failed states”, Somalia can be relied upon to be near to the head the list. For many observers of the international system it is the epitome of an ungovernable territory, made worse by the UN’s declaration that it constitutes a famine zone in July 2011. Somalia is still deeply divided by twenty years of unresolved civil war and armed conflict that began in 1991 with the overthrow of President Siad Barre’s government, and the unilateral declaration of independence for Somaliland. Somalia is divided into armed political and religious factions, and it now constitutes one of the bulkheads in the war against Islamic extremism. The continued fighting in Somalia has had a large impact on the local population – with the imposition of competing rules of law, and the challenges of resource competition – and on regional stability. For the EU and US, Somalia would not be a cause for active concern were it not for the growth of the piracy industry, which is having a substantial impact on shipping traffic moving through the Gulf of Aden and the Indian Ocean near Somalia.

The European Union, along with other international partners, has made improving the security in and around Somalia an important task for its foreign policy. The EU’s concern about Somalia is partly based on humanitarian grounds, but the EU’s strategic and economic interests lie in the waterways of the Horn of Africa and provide stronger incentives for EU action. This brief maps out the situation in Somalia and its impact on global trade and regional stability. The brief also assesses the way the European Union and its partners have tried to contribute to a solution to this crisis, and how this plays out in combination and in contrast with other international actors, such as the US and the African Union.

  • Somalia in Conflict: Context
  • Piracy
  • The EU's Efforts
  • Conclusion


UNC Chapel Hill: EU Center of Excellence (logo)