What is the Berbera free zone?

[RedSea]

WHAT IS THE BERBERA FREE ZONE?

 

 

(Hadhwanaagnews) Hargeysa(HWN):-The Deputy Minister of the Ministry of Commerce of Somaliland IM. Abdi Halim M. Musa after two day visit to Berbera for the designing and establishment of the Berbera Free Zone spoke about the free zones, their advantages and whether Somaliland can compete with older ones in the region.

 

“Free Zone is an economic concept whereby producers and suppliers and customers get together on a non regulated free enterprise system of an economic set up. When a country decides to have a free zone, its intention is to create inside its economy an area where international capital or investors would be able to produce without too much restriction, without too much financial cost and without too much interference from the government.

 

This would be advantageous to the Somaliland economy. A Free Zone would enable an investor to come in to the country and produce things without paying taxes, and restrictions of labor law. And others would be able to produce and sell to the international market. It is like an open space to do business to produce and sell and import raw materials and export finished products free of duty.

 

When the government of Somaliland proclaimed a free zone in the port of Berbera we had six objectives:

 

One , a free zone is typically labor intensive activities. Therefore employment gains are significant.

 

Secondly , a free zone brings new technology, for example, in terms of production methods. That can contribute in the way we produce things even inside Somaliland.

 

Thirdly , this introduction of technology and different know-how in production actually develop human resource, which enters there as employees. It educates them; it is like on the job training. The unskilled can become skilled, and the skilled one can become more professional.

 

Fourthly , it is the way of connecting the Somaliland economy with international markets, with international companies and with the economies of other countries. The chance to export to all over the world is all of a sudden open with out much restriction, through the various industries in the free zone.

 

Fifthly , by having a free zone you also have a chance of availability of resources and raw materials, finished products, technological equipments and so on in your own country. That has a big impact on expediting economic development inside Somaliland.

 

Last but not least , the ability is created for Somaliland to sell its raw materials and its resources to the world through the free zone. We have had problems in trying to export many of our products, but in this one as long as you have companies who are processing that need these resources, you have an instant foreign market and you sell this in foreign currency. Therefore, the revenues gained would enable us to get the necessary reserves in terms of foreign currency.

 

So, all these six points really become a reality by setting up a free zone, which will be totally free from the regulations of the government of Somaliland. This means that there will be a new set of regulations and laws to administer these free zones. They are very different in terms of their time, content and their efficacy.

 

The international airport of Berbera will also encourage the foreign investors and the port therefore will be opening to the whole world for economic activities as per the rules of the free zones.

 

The zone will attract employers and thus reduce poverty and unemployment and stimulate the area's economy

 

In the Red Sea area there are several free zone ports already in existence. This is what we call a competitive region. But we find that the competition is manageable.

 

On one side we have certain advantages, which we consider important attractions to investors over our competitors. One is the location we have on the Red Sea along the shipping lines is a big plus. The port of Berbera is more or less no diversion port. And for most of transshipment and transit trade storage facilities this is very ideal. To think that there are at least forty thousand ships passing through there every year, we can benefit from it. On the other side Berbera can serve the ships that pass through there. We can sell food & green vegetables; we can refuel their ships and fill up their water. There are a lot of activities that we can do in the free zone in Berbera, because it is very close to the international shipping line.

 

We are also a get way to Africa, as the technology changes all technology products are to be sold in the third world but not in the first world. Which means Africa is one of them. So to be located in Berbera to do these assemblies is an ideal place to be.

 

Our labor force is trainable and cheap. If the labor is cheap and productive that is a potential attraction for investors. In some of our neighbors for example the labor is relatively more expensive than Somaliland.”

 

Hadhwanaagnews.com/Hargeysa

[me]

The xabash doesn't want to pay taxes, thats what it comes down to, no need for hadhwanaag to lie to themselves or to dadka waqooyi galbeed.

[RedSea]

This is not strickly about Xabash. This is about the ordinary citizens of Somaliland as well.

 

There is change ahead. The current admin. is messed up, but hopefully Kulmiye or whoever takes over next(insha Allah) will makesome reforms that are badly and also address the issue in berbera port.

[me]

Can you talk sense for once brother, maskaxda ka dhididsii . Who will benefit most from this move to create a free trading zone?

 

What foreign investment will come towards the secessionist entity? Look at the politics of the region, its unstable. No one will invest in the region. Free trade zone or no free trade zone and if they are going to invest they will do that when the legitimate government of Somalia can protect their interests.

 

So for now the only ones that will have any benefit from Berbera free trading zone are the xabash. Since they no longer have to pay any taxes (like they ever paid).

 

So lets imagine a cargo ship thats loaded with goods for Ethiopia docks at Berbera.

 

Some locals unload the ship (Thats if we are lucky, e.g. construction industry). The goods get on trucks owned by Xabash of course, the truck gets on the highway without paying any taxes and its next stop is Jigjiga. So how have the locals benefited from that?

 

On why the author thinks a Berbera free trade zone would be beneficial.

 

One , a free zone is typically labor intensive activities. Therefore employment gains are significant.

 

Secondly , a free zone brings new technology, for example, in terms of production methods. That can contribute in the way we produce things even inside Somaliland.

 

Thirdly , this introduction of technology and different know-how in production actually develop human resource, which enters there as employees. It educates them; it is like on the job training. The unskilled can become skilled, and the skilled one can become more professional.

 

Fourthly , it is the way of connecting the Somaliland economy with international markets, with international companies and with the economies of other countries. The chance to export to all over the world is all of a sudden open with out much restriction, through the various industries in the free zone.

 

Fifthly , by having a free zone you also have a chance of availability of resources and raw materials, finished products, technological equipments and so on in your own country. That has a big impact on expediting economic development inside Somaliland.

 

Last but not least , the ability is created for Somaliland to sell its raw materials and its resources to the world through the free zone. We have had problems in trying to export many of our products, but in this one as long as you have companies who are processing that need these resources, you have an instant foreign market and you sell this in foreign currency. Therefore, the revenues gained would enable us to get the necessary reserves in terms of foreign currency.

1. Are the taxes so high in the secessionist entity that a free trade zone will suddenly give a boost in foreign investment?

 

 

2. Some politics might play a role, the xabash is looking for a cheaper alternative for Jabuuti and the secessionists might want to try to hurt Jabuuti.

 

Anyhow in my opinion a free trade zone is not beneficial to waqooyi galbeed at this moment.

[rudy-Diiriye]

its about time...damn. kol idea. first time i hear a somali port used wisely.

 

watchout dubai. and berbera is located in major ship route area.

[Jacaylbaro]

Some people are always daydreaming about Xabashi ... i hope they wont say SOL is xabashi place soon

 

 

Ilayn habarta wax la ii saar buu yidhi ninkii jiray

 

 

We're talking about berbera ayuhal naas .... Berbera is in Somaliland. Amxaaro is already using the Mogadishu port and they don't need Berbera ,,,,,,,,

[N.O.R.F]

JAFZA - A working example

[Jacaylbaro]

loooooool ,, again you are right .... some ppl should be educated

[me]

NOrtherner, a working example indeed, now please show me the similarities between the two projects since your comparing the Berbera-Free-Trade-Zone with JAFZA.

[N.O.R.F]

^^No,,,,

[RedSea]

MR. ME,

 

why should I believe you instead of them?

 

You are against everything for the better of Somaliland.

 

Waxba ka shaqaysiin maayo ee kadhaqaaji laf yare.

 

ps. this thread was intended to inform Somalilanders and those open minded somalis only plz...thus you are not included.>>>>>

[Jacaylbaro]

Originally posted by me:

NOrtherner, a working example indeed, now please show me the similarities between the two projects since your comparing the Berbera-Free-Trade-Zone with JAFZA.

Nin rag ahi waa garanayaa do*qonna loo sheegi maayo bay soomaalidu tidhaahdaa

[A.J.]

For someone who has a deep hatred of Somaliland, This ''Me'' individual sure does love to get involved in every Somaliland debate.

[me]

Jacaylbaro thats a lazy statement sxb, I have addressed Northerner because I believe that he has the business sense to understand the point I am making . Let us analyze the business side of the story, Jacaylbaro I believe that you are capable of much more then you show us here.

 

Montana sxb 'hatred' is a word that carries allot of emotional weight, be careful with it. You can be a supporter of whatever and I believe in Somalinimo, so lets exchange ideas and share our views on these matters that concern us all. There can be no dialog if you take a defensive posture and say that anyone who doesn't agree with you is a hater.

 

Badacse walaal maxaa ku helay baryahan, sidan kugumaan ogayne.

[me]

Originally posted by Northerner:

^^No,,,,

point made.