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‘Order at sea’ and landlocked countries in Africa

J. Paul Dunne

Things have been changing on the east coast of Africa. The number of maritime pirate attacks has been massively reduced and commentators are talking about ‘order at sea’ in the region. This has led to clear benefits for maritime economies in the area, and these benefits are likely to be spread even further. In this context, improved order at sea could also be important for landlocked countries. As these countries tend to be somewhat poorer than their maritime neighbours, this is good news indeed.

Piracy and Africa’s landlocked countries

While piracy still occurs in African waters—and in fact has been increasing on the west coast of Africa—the reduction in the number of pirate attacks is undoubtedly a good thing. In fact, some commentators are now talking about ‘order at sea’ in the region.

As the graph below shows, the number of pirate incidents grew during the 1990s, before accelerating from 2006 and then declining markedly in the period 2011–12. The degree of change is rather striking and seems to result from both improved protection and activities within the host countries against the pirates, particularly in Somalia.
 

Pirate incidents in Africa, 1995-2013
Pirate incidents in Africa, 1995–2013. Source: International Maritime Bureau Piracy Reporting Centre.

The east-coast pirates have had a large impact on the economies of coastal countries in Africa. Maps of merchant ships’ sea routes reveal how they moved further and further away from the coast as the pirates started to use hijacked ships as mother boats for deep-water attacks. This meant the ships were avoiding major coastal ports, with damaging economic consequences.

The striking change in the number of incidents can only be good news for the affected coastal countries, but it is not always recognized that is also good news for those countries that do not have coastlines—Africa’s landlocked economies. This is extremely important as it is evident that landlocked developing countries are at a considerable economic disadvantage relative to those with access to the coast.

For the purposes of our research, we counted 15 landlocked countries in Africa. Of the six landlocked countries in southern Africa, we used data from Botswana, Malawi and Zambia, excluding only Lesotho and Swaziland (being small countries surrounded by South Africa) and Zimbabwe (due to data issues). We also used data from all four landlocked countries in east Africa (Burundi, Ethiopia, Uganda and Rwanda). Finally, in west Africa we used data from Burkina Faso, Central African Republic, Chad and Mali (but not Niger—again, due to data issues).

Given that 30 per cent of the total population of what Paul Collier terms ‘the bottom-billion countries’ live in landlocked countries, such disadvantages are a major problem. It is also an overwhelmingly African problem, with around 30 per cent of Africa’s population living in landlocked, resource-poor countries. In contrast to Western landlocked states such as Switzerland, these countries are also surrounded by other poor countries.

The World Bank’s World Development Indicators dataset shows that landlocked African countries had an average growth in per-capita gross domestic product (GDP) of 1.23 per cent between 1988 and 2010, while their maritime neighbours grew at 1.20 per cent. This would suggest that landlocked countries seemed to be growing faster but they also remain smaller, with an average per-capita GDP of 1471 compared to 2190 for their maritime neighbours.

Given this disparity economists would expect that poorer countries would catch up with richer countries. Economists see growth rates being higher for poorer countries, as richer countries have already benefited from easily achievable developments and experience stronger diminishing returns to capital. Poorer countries can also replicate richer countries’ technologies and skip steps in the stages of development.  

The benefits of improved order at sea for landlocked countries

There are a number of possible benefits from the improved order at sea. First, increased order leads to lower transportation and lower costs, as the change in security at sea should improve the landlocked countries’ access to the sea and reduce their export costs. This is of course dependent on what else is happening in the neighbouring countries.

Second, order at sea leads to improved growth spillovers, as the improvement in security should reduce the costs to the maritime countries and allow them to reduce security spending. This, together with their reduced transport costs and improved access, should assist them in growing and provide a further boost to the landlocked countries. Third, one can expect an improvement in the behaviour of neighbouring countries, as the reduction in piracy and resulting economic growth may lead to an improvement in attitudes toward landlocked countries.

Fourth, the improved general security should benefit all, leading to increased aid and foreign direct investment—but, again, there is no guarantee. Fifth, these gains can be strengthened by multiplier effects and cumulative causation. Improvements in the landlocked countries will also lead to benefits to maritime neighbours through increased trade and freight.

The graph below gives an idea of the trends and shows some striking patterns and clear interdependence (note: Rwanda is excluded as it produces a spike in the graph, although the general pattern remains similar). The smaller landlocked countries have, as would be expected, more variation in their growth rates, but they do seem to follow the pattern of their maritime neighbours.

The implied dependence of landlocked countries is really quite striking, with upturns and downturns generally more marked, and inevitably occurring after similar upturns and downturns in the growth of maritime neighbours.
 

Per capita GDP growth rate
Landlocked and sea-access neighbours per capita growth (excluding Rwanda)

 

Estimating a simple dynamic model up to 2010 provided further support for a relation between the growth rates, showing a significant and sizeable increase of landlocked countries growth results from their neighbours growth  (a 1 per cent increase gives 0.5 per cent) and a significant decline in response to a growth in piracy incidents, though relatively small (100 less reduces growth by 0.3 per cent).

The results do fit with priors, suggesting that there are indeed benefits to the landlocked countries of an improved security environment, directly through the reduction in piracy and indirectly through the improvement in the economic performance of maritime neighbours.

Conclusions

The reduction in piracy is to be welcomed, not only for those countries that have suffered directly, but also those that have suffered indirectly. It also makes sense to acknowledge the wider security issues, looking at ‘order at sea’ rather than just piracy, including organized crime, smuggling and human trafficking.

Recognizing the economic interdependence between landlocked countries and their neighbours is clearly important and the solutions to the landlocked countries’ problems are pretty obvious. They include improving the security environment, the countries’ own infrastructure (including inland), neighbours’ policies, coastal access, other transport access and rural development.

It is important to improve regional cooperation and international support and there are important roles for both international and local institutions. While these are not always in the hands of the landlocked countries, there are things they need to get right domestically. An improved maritime security environment is clearly beneficial beyond the countries directly affected.

 

This blog post is published as part of a collaborative partnership between SIPRI and Economists for Peace and Security (EPS).

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