The Horn of Africa States region always presents itself as a paradox for frontier investors, adept at mastering rich but unexplored markets. The region offers both a promise and a risk. Its geography, demography, natural resources, and geopolitics, make it a platform where continuously battleground realities and opportunities collide. 

As one reads carefully, Ethiopia’s not-so-hidden but devastatingly dangerous civil war, Somalia’s fragmented governance, Eritrea’s isolation and, of course, Djibouti’s navigation in an environment of volatile stormy seas, some of which are of its own making, it becomes obvious that the region poses both a high potential and a high risk. The entry of Israel into the region adds to the riskier proposition of the region, but it also raises the profile of its potential opportunities.

The region’s capital though small generally remains and is retained, though a significant portion moves to nearby regions like the Gulf countries (mostly Dubai of the UAE). It earns its capital through a number of channels including exports, remittances both from its diaspora and international assistance with few foreign investors in a narrow corridors of opportunities, including ports, agriculture, and small scale farming and mining.

The first marker of the region is its geostrategic location astride a major shipping highway linking the Mediterranean to the Indian Ocean through the Suez Canal, the Bab El Mandab Strait chokepoint and the Gulf of Aden, a blessing, but not without risks, and often a flashpoint for competition among both global and regional powers. Indeed, this is a waterway which carries a large part of global trade and energy supplies, but which also........

© Eurasia Review