Puntland Economists Badly Needed

[Kramer]

A lack of centralization is the number #1 issue that halts development in Somali regions. If every subclan want their own exclusive city, it is borderline impossible to meaningfully develop, especially in a country as resource poor as Somalia. We also prefer building universities and hotels and airports non stop when every dollar should be going to building roads.

People thinking emotionally and not about the return on capital when investing combined with a lack of free movement makes regions basically unviable economically. This is the biggest issue with Somalia currently.

centralization is dead saxiib too much actors with different incentives and goals.

let everyone invest in their own degaans, better to develop whole country slowly than just the capital and neglect everywhere else.

 

[GemState]

centralization is dead saxiib too much actors with different incentives and goals.

let everyone invest in their own degaans, better to develop whole country slowly than just the capital and neglect everywhere else.

I'm not saying put everything into 1 city, I'm saying Somalia needs to give up on developing all it's regions for now and instead build 2-3 cities. This is what Ethiopia, Kenya, etc are doing and the only way to really catch up. Once the GDP per capita gets to a decent level (around 2k), then you can develop the rest of the country.

The current system is crazy from an investors POV, the inefficiencies are so staggering it's almost comical

 

[Chase]

I'm not saying put everything into 1 city, I'm saying Somalia needs to give up on developing all it's regions for now and instead build 2-3 cities. This is what Ethiopia, Kenya, etc are doing and the only way to really catch up. Once the GDP per capita gets to a decent level (around 2k), then you can develop the rest of the country.

The current system is crazy from an investors POV, the inefficacies are so staggering it's almost comical

The Kacaan didn't just focus on Mogadishu, cities such as Bossaso, Kismayo, Burco, Berbera etc. got their funding, that still didn't deter the nation's collapse. Somalia's problem is its people, it's cultural. Until we fix that, all of this is just useless conjecture.

 

[Kramer]

I'm not saying put everything into 1 city, I'm saying Somalia needs to give up on developing all it's regions for now and instead build 2-3 cities. This is what Ethiopia, Kenya, etc are doing and the only way to really catch up. Once the GDP per capita gets to a decent level (around 2k), then you can develop the rest of the country.

The current system is crazy from an investors POV, the inefficiencies are so staggering it's almost comical

it's prob more of a insurance thing. Safety by investing in your degaan is important to people who have been through countless disruptions etc.

and ethiopia has one shared capital (addis) and the rest are ethno-cities.

 

[DR OSMAN]

@Kramer u r right about bi-lateral partnership need to be signed with the govt we seek to gain access too, any real govt manages their industries needs and won't allow someone just to come flooding in disturbing their market set up.

But as puntites we could hold meetings with key industries in those countries and discuss the feasibility of reducing the costs of their imports by using puntite products and goods and then finally go to government of somalia to sign it with that country. with a puntland representative overseeing it.

The govt of Somalia will not help us and we shouldn't expect it will or else we will become like that nacas HAG crying all day on clans this and that and how big daddy somalia isn't helping his region. The idea of federalism is to do your own work and then get somalia to sign off on it, not the other way around. By the time HAG figures that out, I hope we have all the industries in PL in our industrial parks.

 

[Thegoodshepherd]

We need our own Puntland economists. They should be travelling Africa/Mid-east and 'analysing' that's countries 'imports' and bringing together Puntland business community to fill those supply inputs in Puntland.

We can examine each nation imports on GDP and select the 'lucrative' money maker option and speak to that country guaranteeing that we can supply them their needs at a cheaper cost then they're current trading partner.

Infact why are we not looking at Somalia own 'imports' and working out if their is a good money maker industry that we can install in Puntland 'industrial zone'.

@Thegoodshepherd can u explain why we only deem 'Foreign investment' as the only path to economic development?, we need multiple economic development paths.

I wish we had huge industrial parks or zones in Puntland all producing goods and products needed locally and globally. We have the infrastructure 'cargo airports' to ship in-land to any destination in Africa.

Foreign investment is our only way to fast development because we lack:

1. A legal system capable of adjudicating disputes that arise from the pooling of money into public corporations that can issue shares. No one trusts the legal system in Puntland, so the little capital individuals hold gets invested in small business and there are no economies of scale. (Garacad Port is a welcome exception to this)
2. Puntland, as a whole, does not have sufficient capital to build the most basic infrastructure necessary for further domestic investment. For example, the entire coast of Puntland from Garacad to Bosaso there is not a single fishing berth capable of accommodating a midsize fishing boat. More than 1,100 km of coastline without a single fishing harbor. You cannot have a domestic fishing industry if you don't have at least more than 6-7 small fishing harbors along that 1,100 km coast.

Always keep in mind that Puntland has a geographic disadvantage. Puntland's economic core is the Galkacyo-Bosaso corridor, which is 670 km long. Puntland's spends so much of its potential capital on fuel for transportation. This is natural side-effect of our territory's shape, but it is a disadvantage compared to the rest of Somalia.

 

[abz1991]

I'm not saying put everything into 1 city, I'm saying Somalia needs to give up on developing all it's regions for now and instead build 2-3 cities. This is what Ethiopia, Kenya, etc are doing and the only way to really catch up. Once the GDP per capita gets to a decent level (around 2k), then you can develop the rest of the country.

The current system is crazy from an investors POV, the inefficiencies are so staggering it's almost comical

What if every state invests heavily in their capital so that means developing 7-8 cities.

 

[DR OSMAN]

@abz1991 @Kramer @Thegoodshepherd development spread out is better then centralized one city and villages everywhere else, a centralized puntland economy has it's disadvantage also, if u put all our eggs into one basket, this means we can collapse from one place also and our enemy if they choose to 'wreck' havoc on PL will know it just takes one city to destroy.

By spreading our economy out, it's harder to destroy and it's easy to recover when multiple cities are developing side by side, if we lose one town, we can recover quicker becuz other t owns are similarly developed.

The only down-side is slower development pace but due to my fear of centralization, i will accept that development loss. Infact this is the only idealogy i agree with 'right wing conservatives' to not centralize but to de-centralize.

 

[DR OSMAN]

@abz1991 @Kramer @Thegoodshepherd the other thing to note about PL development model, this will force 'districts' to create local industries and develop different 'town character' like America, some towns r financial, some college town, some agriculture, each town has it's own 'character' due to federation, it puts more burden on puntites to create a town character.

Makhir with it's university for example if they bring in certified professors and recognized industry curriculums, cud be PL hub of education giving it a huge student trade which will stimulate it's local market n result in student accomodation residential boom, while it's rural areas could serve as mining towns, their fishery/livestock community will also grow when it's town has an industry to service.

Where-as Bosaso cud serve as financial hub where it has booming loaning sector to create new start up's as is it's core activity, an industrial park in Bosaso to service local n global markets wud be great. When I say industrial, we need one location becuz the electricity backbone needs to be invested and we can't 'spread' that capability around Puntland, it needs to be 'centralized' an industrial 'park'.

 

[DR OSMAN]

As @Kramer noted every dollar invested in manufacturing will create an automatic knock on effect on supply side sectors such as materials, transport, electricity, general market. It will also create a minimum 100 ppl workforce who will buy real estate, general market consumption increases, etc.

 

[DR OSMAN]

@Thegoodshepherd made a good point about legal system in PL being very limited or non-existance. I don't even know if they're is business law about how corporations are to be set up(anglo saxon model, nordic model, german model) all have different pros/cons. I think they do issue 'licensing' and 'property rights' but it's corporate model, disputes, contractual laws and even insurance sector has a long way to go. Even if u buy a faulty item in puntland market or get a bad 'service' thru even a plumber or construction company, you lose your money, so I can see why large scale investors would be 'concerned'.

Thank u Goodshepherd for your point. I remember this dodgy company who scammed us and didn't install plumbing system properly, the water pipes all broke, damaged my dry-wall. No way for me to recieve my money back for poor workmanship, no laws to turn to. Imagine some guy with millions invested how scary it must be.

Why are these topics not raised by the PL parliament. Maybe we can bring in local/foreign/diaspora conference next year to discusss the 'legal' environment they need to foster investor confidence. Right now this 'informal' set up is very primitive.

Right now let me enjoy my dream puntites.



When will PL be legally certified as a 'safe market' and proper laws n institutions in place for large scale investors. Till that day happens, I will continue to dream

 

[DR OSMAN]

@Thegoodshepherd I think the anglo-saxon model of corporations and banking isn't suitable to PL. This model is totally vested to shareholders with little care to environment, govt, or labor force. That radical ogaden @peacemaker prefers this model of no govt interference.

I prefer the Nordic or German Model. The German model at least has govt regulators involved, which may suit Puntland as these ppl hate government and will do 'dodgy' things if they can get away with it all for profit. Profit model is needed but it needs to be guided by ensuring your not destroying the environment we live in, is payin a proper wage to ensure workers can further stimulate the market, and work conditions are critical to ensure we don't have revolving door of losing 'experienced staff'.

I suggest u study the corporate models of the world. I say a german model or nodic model is best for long-term success of the company and ensuring all stakeholders play a role representing differing interests be it workers or govt requirements as both are just as important as profit margins.

What's the point of profits if u losing experienced staff constantly due to horrible conditions n pay who don't stimulate the market thru property purchases, market spending, what's the point of a business profit model if it means all our trees are gone in PL. What's next welcome toxic waste into our sea for petty profit? profit like that isn't long term it destroys your environment and others to be able to make money from it, its totally unsustainable.

 

[DR OSMAN]

@Thegoodshepherd The other thing to note is lack of 'project management' framework adherence. In PL they just build without breaking down time, labor, materials, and adhering to time-frames so costs don't explode outside of the contract agreement and if it does, u need a court to manage disputes.

I cringe when simple house projects takes 'years' when in a proper market it's 12 weeks, a huge productivity 'gap' between our market and established markets. This will also weary investors, imagine investing in the build and equipments and they bring u some cheap african made equipments looooooooool n the building is all corrupted to the cheapest standard not even quality controlled or they 'milk' the building stage to explode into years and ur losing money to labor costs.

 

[DR OSMAN]

@Kramer @Thegoodshepherd @abz1991 let's bring @peacemaker to next year's Puntland conference on the legal environment needed to sustain long term economic development. We will have panels of economists like peacmaker and Ali Issse Abdi the dhulbahante accredited economist, consumers, and investors and legal experts to discuss how to move Puntland into a modern market age.

We must have proper market in PL where everyone has contracts, courts for dispute, legal watch dogs on the market place to ensure good practises in trade n products.

While @GemState will be stuck in his 'informal my word is my bond' primitive market approach. We can then laugh at GM/HS/Hamar and steal their markets who trust puntland items n safe investment environment.

Somali culture is horrible, it hates 'nidaam' by nature and without 'rule of law' there is no way we can develop, it's a damn catch 22 scenario. Our culture is basically a huge stumbling block and totally in contrast to the way the world operates, this is a huge problem also. As timacade said 'somali culture is one based on deciet n corruption' 'somali masuqmasuq wa meheradeedi' loooooooool that means it's not a culture that appreciate and upholds 'rule of law'.

The cultural revolution that Somali needs must be another 'conference' we need to hold aand gather up ideas, look at other productive society models n the reforms they went thru, and eventually pass on our findings to the 'puntland parliament' to implement the changes needed.

 

[DR OSMAN]

@Thegoodshepherd the FDI approach still requires we present them a market whether locally/regionally/globally. PL govt needs to get of it's ass, send our minister to seek these markets by analyzing 'import' needs of each country and working out how we can deliver the same at a cheaper rate by reducing their import deficit which all countries will welcome when we baseline PL partners vs their current import partner.

Can't they justs get a GDP statistic of each country, select products imported that are good money makers, cross it off, jet to that country and hold discussions with them industry stakeholders who r the target imports we want for ourselves, hold a meeting and once all issues r put on table in terms of risk mitigation/insurance/quality assurance discussed n agreed on, go to mogadishu and get somalia govt to sign off with that country with PL representative on the table, and rinse and repeat this strategy worldwide untill our vision of a bosaso super industrial park is created with hundreds of factories producing goods, products, materials and thousands of workers employed.

We must ask these nations what sort of 'quality assurance' they need of our products/goods and get them 'international certifications'.

We need to calculate the profits achievable, investment/operational/labor/taxation overheads, electrical infrastructure, transport infrastructure(road, air, sea) which-ever is most cost friendly.

This must be done after we make PL a rule of law based market place and ensuring project management frameworks exist for investors to 'cost analyse'.

I can't continue living in a dream where puntites are employed at Bosaso industrial park, Bosaso financial hub loaning to Somalis and making profits, real estate booming due to the new workforce financial power, market growing due to increased consumers. I can't continue living in that dream, it needs to be made a reality.

 

[DR OSMAN]

@Thegoodshepherd this hag @Galmudug-State is still stuck in the 1960s 'rich business ppl' mind-set lol and 1 dollar peasantry, at least @GemState knows the 'game' being played today is rich 'ppl' all over the population not 1 hag rich person and thousands of 1 dolla peasants. 1 rich person model is why GM cannot create an 'economy' of scale, PL wants an economy of scale and we r discussing legal obstacles/local-regionaal markets/investor confidence/and govt grim realities facing us to move towards that direction.

Galmudug has a long way to go, it's not up for this game and I suggest u go back to GM becuz u have your work cut out already.

 

[Kramer]

Saxiib the energy problem is the number one deterrant and obstacle. If thats fixed then things will happen.

until we find a way to get cheap energy its gonna be hard to do anything. Once "factories" or potential enterprises have access to reliable, secure and cost effective energy, its much easier to industrialize

 

[DR OSMAN]

@Kramer There is more then 1 common issue as u paint. Electricity. It's a complex web of issues and they're probably more then what I listed.

1. Electricity backbone expansion is needed to not only cheapen the costs but to support large consumption requirement of factory equipments. On the current backbone, 100 huge machines running co-currently, might 'dwindle' energy needs of half of bosaso lol.

2. Rule based Market with legal regulatory. If I can't even get refund or complain about poor-man workmanship on my house construction or contractual breaches on products n goods, it's hard to convince someone to dump millions into an insecure market. We don't even have proper project management frameworks executed in private investments. This was contributed by @Thegoodshepherd

3. PL govt not researching Somalia's and global GDP import data, selecting items they can produce to reduce import deficits either locally or for an overseas market, negiotating with local or regional industries in chosen markets and finally getting bilateral sign off thru Somalia n the country.

4. PL govt not preparing real feasibility data to investors which needs to include a secured 'market', investment costs, operational costs, taxation rates, skilled/unskilled labor supply and if it doesn't exist locally to create the skill supply.

Maybe their is possibly other things holding PL behind which is where I think we shud hold a PL conference between investors, consumers, economists, and legal experts and discuss what is holding us behind, and then discuss the priority level on each area holding us back and create a road-map to address each priority.

No more games, real 'task, dates, deliverable' on each priority n it's completion.