Coca Cola Implicitly Recognizes Somaliland Independence

In a very significant move, Coca-Cola has granted a second “national” franchise to cover the de facto states of Somaliland and Puntland in addition to the defunct franchise granted to the defunct central authority in Mogadishu, Somaliland247 reports [1]. Doing so means that Coca-Cola has given implicit recognition of both the Somaliland and Puntland areas by including them separately from the rest of Somalia, a move that promises economic development in an area where growth and development have been hindered because of geopolitical problems.

The license was granted by Coca-Cola in late 2010, after long being denied, to Ahmed Guelleh, owner of Somaliland Beverage Industries. Mr. Guelleh is a member of a family-based trading operation whose $5 a year import/export firm deals in exporting such diverse products as oats and frankincense and importing tires, serving as the Somaliland representative of DHL, and now serving as Somaliland’s Coca-Cola franchise.

In order to make Coca-Cola’s operations viable in Somaliland, it was first necessary to receive a license from Coca-Cola, which was done after long efforts and due dilligence. Then, it was necessary to build a $10 million bottling factory, which took a lot of digging for water in order to find sufficient water for bottling operations. This process was hindered by difficulties in finding and receiving key supplies (like bitumen) as well as a shortage of skilled labor due to geopolitical concerns. Nonetheless, the project is near completion and is expected to provide an annual profit of $3.2 million to Gulleh’s firm and employ 130 Somaliland workers to fill 11,000 Coca-Cola bottles per hour. That represents major progress for Somaliland business and diplomacy.

One interesting problem that the local Somaliland company had to solve was the water shortage in Somaliland and Puntland. Only plastic bottles will be used due to the shortage in water to wash glass bottles and the difficulties and delays in receiving recycled bottles back from the troubled east. Therefore, a break-even arrangement was made with an Indian firm to ship the plastic to India in exchange for payment for the recycled plastic. Perhaps a useful future business investment would be for Somaliland to develop its own recycling factories and firms. One noteworthy encouragement for future business partners in Somaliland is that the nation’s lack of bribery and red-tape means that business can proceed smoothly and profitably in Somaliland for those companies that have the political will to recognize this long-independent nation.

Somaliland Coming Of Age

Likestock is the dominant foreign export of Somaililand, but Somaliland has shown a lot of verve and spunk in seeking to diversity and modernize its operations and economy even while operating under the shadow of nonrecognition (so far) by the international community, the Financial Times reports [2].

Despite the undeveloped state of Somaliland’s economy, there are signs of progress, including growing investments in infrastructure and the establishment of industry, growing unofficial links with other nations, including discussions for a bilateral trade treaty between Somalilland and the UK, and Somaliland’s serving as a force against the rampant piracy in the region.  For all of these reasons, along with the fierce devotion of Somaliland’s expatriate sons and daughters, who provide $1 billion per year in remittances, there is hope for Somaliland that many parts of Africa lack.

Among the recent efforts touted by the current Somaliland government is the rooting out of 5,000 guest workers and the doubling of the civil service, with goal o providing higher paying jobs for Somalilanders themselves, along with a doubling of state revenues through more efficient tax collection. Fishing, industry (including meat packing for its foreign exports), and power generation offer potentially very profitable investments.

The wide gulf between perception and reality in Somaliland means those who are able and willing to recognize Somaliland’s promise and excellence now stand the chance to make huge profits once the rest of the world catches up to the reality of a potential East African “tiger economy.” The fact that Somaliland boasts a very robust entrepreneurial culture and a taste for business means that Somaliland’s future looks bright, so long as foreign diplomats can get on with the business of recognizing the fait accompli of its independence [3].

Somaliland Independence Celebration In London

If you are in London on May 18, 2011, you are invited to cheer on Somaliland’s 20 years of independence at the Old Navy Yard, across from the House of Lords building, from 12-5PM. Join in the celebration of this little nation’s long-neglected independence from the tyranny of Barre’s regime and the anarchy of the rest of Somalia thereafter.

[1]  http://somaliland247.wordpress.com/2011/05/17/coca-cola-boosts-somaliland-economy/ [2]  http://www.ft.com/cms/s/f48e64be-80a1-11e0-85a4-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Ff48e64be-80a1-11e0-85a4-00144feabdc0.html&_i_referer=http%3A%2F%2Fus.mc1619.mail.yahoo.com%2Fmc%2Fwelcome%3F%26.rand%3D1766659662#axzz1MeZajzVG [3]  http://somaliland247.wordpress.com/2011/05/17/somaliland-aims-to-show-coming-of-age/ [4]

Ogeysiis/Announcement: A Rally Commemorating the 20th Anniversary of Somaliland’s Independence in UK