“Forging Financial Sovereignty: How the Somaliland–Taiwan Partnership Sets a New Diplomatic and Economic Precedent”
By. Ahmed M. Suleiman-Editor-in-Chief, Dawan newspapers
In a world increasingly defined by strategic realignments and the emergence of resilient micro-states, the recent high-level engagements between Somaliland and Taiwan represent a groundbreaking shift not just diplomatically, but financially and institutionally. These engagements underscore how economic diplomacy is redefining the geopolitical landscape through innovation, cooperation, and mutual capacity building.
In early September, the Governor of the Central Bank of Somaliland, Mr. Abdinassir Ahmed Hersi, led a delegation to Taipei, Taiwan, to hold strategic talks with senior Taiwanese officials, including Deputy Minister of Foreign Affairs Ambassador François Wu Chih-chung, and key leaders from Taiwan’s financial regulatory ecosystem. The purpose: to institutionalize a robust partnership across finance, trade, and technology a model of South-South cooperation grounded in shared values and mutual recognition, even in the absence of formal international acknowledgment.
From Political Symbolism to Functional Sovereignty
Somaliland and Taiwan two democracies with limited formal recognition have long shared a diplomatic kinship rooted in parallel struggles for international legitimacy. But this relationship is increasingly moving beyond symbolic solidarity toward tangible, strategic outcomes. Governor Hersi’s visit marks a maturation of that relationship, transforming it into a vehicle for state-building through financial sovereignty.
Key agreements discussed during the visit include:
- Establishment of a Deposit Insurance System in Somaliland, supported by Taiwan’s Central Deposit Insurance Corporation (CDIC)
- Technical assistance and experience-sharing with Taiwan’s Financial Supervisory Commission (FSC)
- Engagements with the Central Bank of Taiwan to facilitate Somaliland’s entry into global payment ecosystems, including potential onboarding to the SWIFT network
Such developments are not merely technical. They signal an emerging model of self-driven modernization in unrecognized or partially recognized states one that uses financial systems as instruments of autonomy and credibility.
Economic Diplomacy as a Tool of Recognition
While both Taiwan and Somaliland face diplomatic marginalization on the world stage, their ability to build resilient, transparent institutions has become their strongest diplomatic tool. In the absence of de jure recognition, these entities are pursuing functional recognition forging relationships and agreements that allow them to operate as states in all but name.
The implications of this cannot be overstated. In a global financial environment that often requires formal recognition for integration into systems such as correspondent banking or international clearinghouses, Somaliland’s approach leveraging technical excellence and trusted partnerships offers an alternative pathway.
This is particularly vital for economies in the Global South, where the over-politicization of recognition has historically inhibited access to global capital, insurance mechanisms, and development finance. Taiwan’s support is not just symbolic solidarity; it’s a practical demonstration of how strategic alliances can sidestep traditional barriers and empower emerging economies.
The Long Game: Building Trust Through Systems
One of the most promising aspects of the visit is the emphasis on risk management infrastructure. The planned collaboration with CDIC to establish a Deposit Insurance System in Somaliland represents a historic step toward consumer protection, financial sector confidence, and systemic stability. These are foundational elements for any credible financial system and vital for attracting foreign investment, encouraging diaspora remittances, and protecting depositors.
Beyond insurance, cooperation on financial supervision, digital payments, and banking infrastructure modernization marks a shift from aid dependency to partnership-based development. Taiwan is not providing charity it is sharing systems, standards, and experiences, enabling Somaliland to leapfrog institutional weaknesses and adopt globally credible norms.
Conclusion: Sovereignty by Design
This deepening alliance between Somaliland and Taiwan is a masterclass in how non-recognized states can build real sovereignty through design, not declaration. By focusing on systems, standards, and institutions rather than symbolism alone Somaliland is setting the precedent for a new kind of diplomacy: one that derives legitimacy from functionality.
In an era when multilateralism is under strain and great power rivalries are reshaping alliances, these smaller actors are showing how strategic, values-based partnerships can carve out space in the international order not through military might or recognition, but through innovation, accountability, and shared ambition.
If successful, the Somaliland–Taiwan model could serve as a blueprint for other regions navigating similar constraints, reminding the world that sovereignty in the 21st century is no longer granted, it is built.