The Red Sea and the Gulf of Aden offer some of the best new port investment opportunities. However, the logic for investment is more than economic in nature. Instead, investments have been aimed to ensure strategic, rather than commercial, dominance.
The ‘Ever Given’ incident that blocked navigation in the Suez Canal for over a week in April 2021 serves as a useful reminder of the Red Sea’s importance as a transit route for energy and commercial goods. Most of the liquefied natural gas (LNG) and crude oil from the Gulf reaches Europe and North America through the Suez Canal or the Suez-Mediterranean (SUMED) pipeline.
The current pattern of globalization, characterized by a combination of Chinese production and American-dominated distribution, is heavily dependent on the freedom of commerce through the Suez Canal and the Red Sea. More than ever, the strategic value of the Red Sea, which separates the Horn of Africa from the Arabian Peninsula, has attracted increasing attention on both of its shores. Global powers such as Russia, Turkey and China, as well as the United States and France before them, have started to establish naval bases along the coasts of Djibouti, Somalia, Eritrea and Sudan.
This newly re-discovered relevance has also attracted investments from the opposite shore, as the wealthy Arab Gulf states have competed for influence and nationalistic primacy in East Africa. Although it has experienced significant economic growth over the past two decades, this region continues to be plagued by unresolved conflicts, piracy, and fragile governments. Qatar, the United Arab Emirates, and Turkey have vied with one another to control East African ports to gain a foothold in this strategic region.
The UAE and Saudi Arabia want to gain greater influence in the Horn to counteract Turkey – even if the Saudis may harbor concerns over Abu Dhabi’s ambitions, especially given that Egypt (a mutual ally) has not hidden its irritation over the UAE’s support for Tigray in Ethiopia.
Nevertheless, in a world where maritime transport accounts for some 90 percent of international trade, the most visible manifestation of Gulf interests in East Africa has been investments in ports. This fact takes on even more significance for regions located along major maritime trade routes, such as the Red Sea. Over one-tenth of all international trade passes through this stretch of sea, making it one of the most important waterways in the world.
The Red Sea and the Gulf of Aden offer some of the best new port investment opportunities. However, the logic for investment is more than economic in nature. Instead, investments have been aimed to ensure strategic, rather than commercial, dominance. The Gulf states have secured contracts with ‘aligned’ states, such as Eritrea, Somaliland, and Puntland for the United Arab Emirates or Somalia and Sudan for Qatar and Turkey.
Investment in East African Ports
Until now, the main port in the Horn of Africa, and the Bab el-Mandeb Strait in particular, has been the one in Djibouti, as the war in Yemen has diminished the capacity of the ports of Aden and Hodeidah. However, there has been a surge of foreign investment in East African ports, fueling a contest to dominate this region among the Gulf powers. Since 2015, the UAE has emerged as the chief competitor in the East African port race through its Dubai Ports World (DP World), a global port management sector giant with financial backing from rich Emirati families. The UAE’s strategic goals are both economic and political in nature. More precisely, in exchange for meeting the Horn of Africa’s demand for port infrastructure (especially landlocked Ethiopia, which has experienced unprecedented growth in the past 20 years, prompting the need for links to Djibouti and new ports and related infrastructure), the UAE has been building military installations to support its air and naval forces involved in Yemen. The facilities are intended as a deterrent against the smuggling of Iranian weapons to the Houthi rebels through Eritrea.
In 2018, DP World secured a 30-year concession to develop the Eritrean port of Assab, where the UAE Navy and Air Force had already established a presence. DP World also took over the port of Berbera, in Somalia’s de facto independent province of Somaliland, where it set out to invest some $440 million to build its infrastructure. The Emirates have also built a military airbase there, which could also be adapted to function as a civilian airport.
Nor are the UAE’s activities confined to Somaliland; Abu Dhabi has also invested in port infrastructure (and coast guard training) in Somalia’s other breakaway province of Puntland. In this sense, the UAE has used port infrastructure as a trojan horse to pursue its strategic interests and foreign policy in East Africa.
So has Qatar. In 2018, Doha’s Mwani Qatar (Qatar Ports) obtained a $4 billion contract with Sudan to modernize its Suakin port, promising to make it the largest in the Red Sea. Doha has also been active in Somalia, competing directly with the UAE by securing contracts to build a port and ‘free economic zone’ in Hobyo – notably in cooperation with the Mogadishu government itself, rather than Somalia’s breakaway territories.
Turkey, one of Qatar’s most important allies, has also invested in Suakin, an island port formerly controlled by the Ottoman Empire. In the process, Turkey gained the right to deploy its military forces in the port, while a Turkish company has been managing the port of Mogadishu. (Ankara has operated a military training facility in Mogadishu since 2014.)
Turkey’s recent naval expansion recalls an earlier era, when the Ottoman Empire dominated the Red Sea for three centuries. Ankara’s return to the area has only served to intensify some Arab capitals’ perception of President Erdogan as a neo-Ottomanist. The renewed collaborative mood within the GCC will not have altered this perception, given the West’s own concerns about Ankara’s ambitions.
Repercussions for the Gulf States
The competition for influence in the Red Sea and East Africa poses an obstacle to the longevity of the agreement that Saudi Arabia, the UAE, Bahrain, and Egypt signed last January 5 in al-Ula (Saudi Arabia) to end the blockade of Qatar. In spite of the agreement, Qatar has remained its own ambitious, and its regional neighbors and rivals will be keen to rein in its external projection of influence.
Meanwhile, four members of the Arab League – the UAE, Bahrain, Sudan and Morocco – have started the normalization of bilateral relations with Israel by joining the Abraham Accords agreement. While the Trump administration presented these as a vehicle for peace, emphasizing its purported function to resolve the Palestinian-Israeli conflict, the accord had far greater implications for the strategic ambitions of the Gulf monarchies in the Mediterranean and the Gulf.
The countries involved, from the UAE to Bahrain, and indirectly Qatar and Saudi Arabia, have all obtained important diplomatic, economic and military advantages in view of their ‘asymmetrical’ competition in the Horn of Africa and beyond – considering that Libya has served as the battleground for the proxy war between Qatar (backed by its allies in Ankara) and the UAE, with ideological as well as regional implications. Another area of concern is Tigray, which could draw Egypt, Sudan and their Gulf allies the risk of a regional war over Nile water resources. As the primary source of Nile waters, Ethiopia threatens Egypt and Sudan’s water supply with its Grand Ethiopia Renaissance Dam (GERD). The GERD has encouraged Cairo and Khartoum to seek the backing of their Gulf allies to pressure Addis Ababa to abandon the project.
The immense political and commercial importance of the Red Sea, and the instability in its surrounding lands, have made it a logical place for the Gulf states to expand their influence. As the United States begins its long-promised withdrawal from the region, it will become incipient on these nations to protect their own interests by helping to ensure the free flow and safety of international commerce. Bases on the Red Sea will also give the Arab states increased sway over events in the Horn of Africa, such as the Tigray War and the Somaliland secession dispute, as well as the ongoing disaster in Yemen. If these and future conflicts can be averted through the presence of the Arab powers, even if those powers view each other as rivals, the benefits will justify the costs to all sides.
Alessandro Bruno (@TheAlessandrist) is an analyst at Gulf State Analytics (@GulfStateAnalyt), a Washington, DC-based geopolitical risk consultancy. He is a frequent guest on BBC, CBC, and CTV. He holds an MA in International Relations from the University of Toronto – where he also started a Ph.D. Bruno has worked abroad as a United Nations officer in Libya. @TheAlessandrist.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.