Suldaanka

What is eating Garowe Administration?

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Goods were being dumped at the cost of local  traders. And the movement of goods were going one way. There's little to no benefit in such situation.

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1 hour ago, Che -Guevara said:

Goods were being dumped at the cost of local  traders. And the movement of goods were going one way. There's little to no benefit in such situation.

what about goods from occupied territories?

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2 hours ago, Che -Guevara said:

Goods were being dumped at the cost of local  traders. And the movement of goods were going one way. There's little to no benefit in such situation.

Why is it that the it is a one-way traffic? what is stopping Puntland traders to do the same? 

Some people are saying that, Deni's trading businesses have been facing stiff competition from Somaliland traders flooding the market with cheaper products, and this is just Deni trying to protect his bottom line. And not necessarily to the benefit of the people. 

It will be very hard to enforce this. Somalis smuggle cheaper products into Ethiopia's markets even when security is toughes, so I do see Puntland losing tax money and yet products arriving business as usual. 

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1 hour ago, maakhiri1 said:

what about goods from occupied territories?

Perishable items such as farm products from Boocame or any Somali region for that matter and non-luxury items are exempted.

  • Haha - That was funny. You made me laugh! 1

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Suldaanka, 

The problem preceded Deni. Traders in Puntland are all for business. They opposed the government  when Puntland unnecessarily tried to control the movement of goods from the south  The situation with the north is different.

It must be noted no Somali region actually produce anything at industrial level. It is about pricing of imported goods and levies on those goods.

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Amigos   

Items arriving from Sool and Sanaag will not be exempt. As stated by a Puntland MP, in accepting that any items arriving will be taxed at Yoocada, is to accept Somaliland's authority over those regions.

If they enforce this tax they kill their bogus claim, and if they dont they kill their small port operation at Bosaso. The pirates are in a tough place. 

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It’s economics 101.

If you want more of something, governments subsidize it; and if you want less of something, governments tax it...ceteris paribus(all things being equal).

However, trade tariffs are a double edged sword, and must be used sparingly and strategically.

 

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Amigos   

Pirates simply can not compete with Berbera due to container handling facilities. Bulk-shipping via containers ensures goods imported from Berbera will always be cheaper than ones imported in Bosaso. 

Here is a Pirate MP decrying traders and businessfolk belonging to Pirateland who are flocking to Berbera due to better service: 

A killer move by Somaliland is issuing tax exemptions to Pirates who use Berbera and use Somaliland's tracking system to re-export goods to Garowe 😁

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8 hours ago, Che -Guevara said:

Suldaanka, 

The problem preceded Deni. Traders in Puntland are all for business. They opposed the government  when Puntland unnecessarily tried to control the movement of goods from the south  The situation with the north is different.

It must be noted no Somali region actually produce anything at industrial level. It is about pricing of imported goods and levies on those goods.

You say the situation with Somaliland is different, what is so different about it? Is it b/c of the border conflict? That existed since time memorial, what is so new about it?

With regards to your assertions, I agree that this is purely a price difference war and why Berbera has a upper leg is all due to 'economy of scale' and as of recently direct shipment from source country to Berbera by passing the Jebel Ali detour. These two combined is giving Somaliland traders a huge margin to play with which Puntland traders can't match. 

 

9 hours ago, Tillamook said:

It’s economics 101.

If you want more of something, Governments subsidize it; and if you want less of something Governments tax it, ceteris paribus(all things being equal).

However, trade tariffs are a double edged sword, and they should be used sparingly and strategically.

 

This could be true for an economy that is working. But Puntland? I could have made some sense if they selectively trying to protect local manufacturing, but that is not the case here.

They are trying to protect imported goods. So it doesn't make a lot of sense that Puntland traders will have force their higher priced imported products to the people, when they people are able to get the same product cheaper. Who are they benefiting? The biggest winners are those bulk good sellers in Dubai.

Berbera traders now compete directly with those bulk good sellers in Dubai. You can find exact products cheaper in Berbera. 

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1 hour ago, Amigos said:

A killer move by Somaliland is issuing tax exemptions to Pirates who use Berbera and use Somaliland's tracking system to re-export goods to Garowe 😁

When Puntland traders try to send something from China, i.e. containers. They have the option to send the goods to Djibouti, Berbera, Mogadishu and Dubai's Jebel Ali Port. Berbera is cheapest option both in terms of storage and distance to Puntland both in land or over sea. Djibouti charges extortion amount for storage due to the Ethiopian goods which they make most money from. I am not too sure about Mogadishu's storage charges but I can assume the fuel costs for transfering goods from Mogadishu to Bosaso is higher due to the distance being covered. 

So when your gov't forces you to pay higher to avoid Berbera, who are they benefiting? That is the question.  

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If Somaliland gets independence kiss goodbye anything from Puntland having value. Berbara port is better managed and with increase investment can be better than most other ports in the region. 

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Rashid Laqan below recaps the issues faced by Puntland's traders. Which is unsustainable. 
 
Currently Puntland traders have to send their goods to Salalah Port in Oman. The Omani take their cut. And then it takes few days to unload goods and reload them to Dows that take the goods to Bosaso. Bosaso Port again takes its cut and on top of that Puntland tax the goods.
 
In Comparison, by using Berbera, they will pay Port Fees once only. This way they avoid double port fees and only pay tax at Yoocada Dry-Port.  
 
By forcing the business community to avoid Berbera, they are condemning the business community to risks as well as higher charges. And on top of that, they will not guarantee that Somaliland's goods won't be arriving in Puntland markets. Afterall, the shop owner in Bosaso or Garowe, if they can find exact products cheaper at Togwachale, they will do everything to get those products to their shops. 
 

 

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