ADDIS ABABA (BLOOMBERG) - Security forces protecting the semi-autonomous Somali territory of Puntland from Islamist militants on the approach to one of the world's busiest shipping lanes haven't been paid for months.
The payment delays, spurred by a 2016 budget crisis, have developed into mutinies, with soldiers briefly seizing government buildings and officers resigning from the Puntland Intelligence Agency (PIA), according to local media and the agency's former foreign liaison chief.
Meanwhile, troops in the region are battling factions of the world's two biggest Islamist-militant groups. Puntland's president has denied any "real mutiny" has occurred.
About 643km northwest of Puntland's main port lies the Bab-el-Mandeb, a strait bordered by Yemen, Djibouti and Eritrea that gives oil tankers access to the Red Sea as well as the Suez Canal. It's ranked the fourth-busiest oil- and fuel-shipping bottleneck in the world by volume. US troops are stationed in Djibouti, where China is building its first overseas military base.
"If security and intelligence organisation become non-functional," it would be "easy" for the Islamist militants to attack civilian vessels and warships, said Wang Chuan, a retired Chinese army major who heads a counter-terrorism studies center at the Knowfar Institute for Strategic & Defence Studies in Jiangyin City, China. "That would be a new horrible threat to the water lane."
Somalia, emerging from decades of civil war, is trying to rebuild amid attacks by al-Shabaab, an al-Qaeda-linked group that's waged a decade-long insurgency to impose its version of Islamic law.
While Puntland has escaped the worst of the violence, a faction loyal to the Islamic State in Iraq and Syria (ISIS), has emerged in the territory, last year seizing Qandala, a port east of the commercial capital, Bosaso, for six weeks.
Puntland's intelligence agency called their expansion a potential "threat to global maritime trade routes."
Increased lawlessness in Puntland could fuel a re-emergence of piracy, which caused havoc to international shipping off Somalia's coast over the past decade.
After several years of inactivity, there have been at least three piracy incidents in the area in 2017, according to the European Union's Somalia naval force. It said the most recent attack, on a cargo ship on April 8, was thwarted by a team from a Chinese warship that coordinated with navies including India's.
The PIA said in November that officers hadn't been paid for seven months. For the army in three of the six administrative regions that make up Puntland, according to Puntland's constitution, it's been 2 1/2 years, said Defence Ministry spokesman Mohamud Mohamed Gubadle.
Two of these regions are disputed with neighboring Somaliland. Speaking last month, Gubadle said Puntland's parliament was supposed to inform the army April 2 if they'd be paid. When asked for the outcome by phone and text message, he said he was "too busy" to discuss it.
A United Nations monitoring group last year said the local government had responded to difficulties in paying its security forces and civil servants by distributing counterfeit currency. The PIA said it has previously received funding from the US and United Arab Emirates.
"Everything is boiling in Puntland," said Mohamed Muse Abdule, ex-foreign liaison chief with the PIA, who resigned in February after a payment dispute. "The Ministry of Security, like many other institutions, is no longer functional, the intelligence agency is crippled with poor leadership."
He described Puntland's counter-terrorism policy as "very weak."
The ISIS faction, which recently targeted security personnel with an attack in Qandala, is led by Sheikh Abdulqader Mu'min, who the UN said had a maximum of a few dozen fighters when he swore allegiance to the self-proclaimed caliphate in October 2015.
Mu'min, who returned to Somalia from London in 2010, has been sanctioned by the US State Department as a "specially designated global terrorist."
The faction's assassinations of security officials and targeting of military convoys suggest it may have co-opted government personnel, according to Michael S. Smith II, a terrorism analyst and co-founder of Kronos Advisory. The increase in Somali-language material by ISIS-affiliated media shows the group is trying to build support among Somalis, he said.
AUTHORITIES REMAIN CONFIDENT
President Abdiweli Mohamed Ali has said authorities are "confident that our military and troops are able to fight" any Islamist militants. "There are no unpaid salaries," he said in a March 21 interview in neighbouring Ethiopia. "We pay salary, allowance, dry ration."
The ISIS faction was "scattered in the mountains" after occupying Qandala and is not a serious threat, he said.
But former PIA official Abdule, who now runs a security consultancy, said Mu'min and 200 fighters in February moved to a location in Puntland's al-Mishkat mountains, where dozens of other youth joined.
Terrorism analyst Smith said "pushing IS into rural areas is not the same thing as 'defeating' the group".