There are many reasons why I believe 2021 will be the roughest year yet for Puntland region:
1) Weak economy:
Puntland historically has had a problem balancing its books. The entire desert region generates only $93,466,666. And what is an abysmal sum to begin with, will dwindle down even further with any headwinds due to Covid-19 in 2021. Earlier in the year, the World Bank provided a bleak outlook for Puntland's economy, stating that revenue shortfall due to interruptions to international trade would amount to a staggering 68 percent deficit in Puntland region!
It is impossible to run an administration on this amount. Even one as limited as Puntland region.
And if this was not enough, Puntland region is facing an eye-watering hyperinflation crisis, to the tune of close to 50%. This is the sixth highest inflation rate in the world, and 3rd highest in all of Africa. The poorest will be hit hard, especially now that they can not even pay taxes in their local currency:
2) Berbera taking business from the already struggling Bosaso.
Bosaso port, Puntland region's only source of hard currency will face its toughest year to date in 2021 when the already dominant port of Berbera opens up its new facilities. A lot more of Puntland region's businesses are moving their operations to Berbera, simply due to the bulk nature of Berbera's containerised facility. They can get their wares much cheaper if transported in bulk. And Somaliland will continue to offer generous GPS-tracked tax-exemptions to imports destined to Puntland. This is a major cause for concern to the statelet's administration.
Then we have the fact that dry-ports will be built at Gambadhe in Sool as well as Ceerigaabo district which will hurt any business Bosaso was getting from those two regions.
3) Continued military encroachment on areas previously controlled by Puntland region.
Somaliland has been bullying the desert region for years. Everyone knows the history of Puntland militia being the only entity with a losing track record. So much territory was lost by the desert dwellers to Somaliland across every single Puntland administration and I foresee 2021 to be a continuation of this trend. We have seen their calaacal following the loss of Tukaraq, the threats of "dagaalki qarniga", the fundraising and appeals to diaspora.. of course these threats never materialised. Somaliland will continue to push the starving Puntland militia and I fully expect more territory to be lost.
Lets revisit this thread in December 2022.
1) Weak economy:
Puntland historically has had a problem balancing its books. The entire desert region generates only $93,466,666. And what is an abysmal sum to begin with, will dwindle down even further with any headwinds due to Covid-19 in 2021. Earlier in the year, the World Bank provided a bleak outlook for Puntland's economy, stating that revenue shortfall due to interruptions to international trade would amount to a staggering 68 percent deficit in Puntland region!
It is impossible to run an administration on this amount. Even one as limited as Puntland region.
And if this was not enough, Puntland region is facing an eye-watering hyperinflation crisis, to the tune of close to 50%. This is the sixth highest inflation rate in the world, and 3rd highest in all of Africa. The poorest will be hit hard, especially now that they can not even pay taxes in their local currency:
2) Berbera taking business from the already struggling Bosaso.
Bosaso port, Puntland region's only source of hard currency will face its toughest year to date in 2021 when the already dominant port of Berbera opens up its new facilities. A lot more of Puntland region's businesses are moving their operations to Berbera, simply due to the bulk nature of Berbera's containerised facility. They can get their wares much cheaper if transported in bulk. And Somaliland will continue to offer generous GPS-tracked tax-exemptions to imports destined to Puntland. This is a major cause for concern to the statelet's administration.
Then we have the fact that dry-ports will be built at Gambadhe in Sool as well as Ceerigaabo district which will hurt any business Bosaso was getting from those two regions.
3) Continued military encroachment on areas previously controlled by Puntland region.
Somaliland has been bullying the desert region for years. Everyone knows the history of Puntland militia being the only entity with a losing track record. So much territory was lost by the desert dwellers to Somaliland across every single Puntland administration and I foresee 2021 to be a continuation of this trend. We have seen their calaacal following the loss of Tukaraq, the threats of "dagaalki qarniga", the fundraising and appeals to diaspora.. of course these threats never materialised. Somaliland will continue to push the starving Puntland militia and I fully expect more territory to be lost.
Lets revisit this thread in December 2022.
