Overcoming Challenges in an Unrecognized Economy (Muktar Adan A. "Koshin",  March 2017):

Despite Somaliland being the fourth poorest country in the world, Somaliland operates one of the lowest budgets of unrecognized states; it is unfortunate that 70% of its budget goes to the security sector while only 30% goes to the development programs (World Bank economic update of Somalia 2015).

According to Collier and Hoeffler (2005), most unrecognized states are low income countries, and the costs of non-recognition grow over time as their economies further decay, this is because the resources of unrecognized states are primarily focused on security which is generally characterized by a lack of public investment in critical sector which is the main vein of development like infrastructure and education.