Description:
This working paper examines the dynamics and trends of cross-border trading in the Ethio-Somaliland corridor. The Ethio-Somaliland corridor is not a mere geographic pathway for the transfer of goods and commodities but rather a transboundary space with ethnic and transethnic networks, official and unofficial authorities, and formal and informal norms. While cross-border trading between the interior parts of Ethiopia and the Somali littoral territories has a long history and continues unabated, it has been affected by state formation processes both in Ethiopia and Somaliland. This study focuses on the trading of livestock and electronics. The two commodities were chosen because of their dominance in terms of the market size and the attention they garner from policy makers. Livestock is by far the major outgoing commodity from Ethiopia in the corridor. The sector also plays a significant role in the livelihoods of large borderland communities on both sides of the border. In recent years, trade in consumer electronics has emerged as an important activity in the corridor, in particular since the introduction of mobile phones. The materiality of the two commodities - live animals and small but high value electronic goods - helps to explain the different trajectories the two goods take in the corridor. This working paper underscores that the fundamental reason for the thriving of cross-border trading in the corridor is the economic rational. As far as this structural issue is not addressed, efforts of the Ethiopian government to prevent or ‘regularize’ cross-border trading is not going to be realized.