Local/Regional Economic Development in South ... - Value Chains

infrastructure would be ideal for this. In several production
and service branches linked to the growing tourism
sector (e. g. food production, hotel equipping, building
materials production) there are profitable business areas.
Thus, there is an opportunity to create a business start-up
environment that produces a self-reinforcing momentum.
This favorable environment could also become attractive
for international investors one day. However, in that case,
it would not be a matter of transporting raw materials to
Bar, processing them there, and transporting them again
to distant markets. Rather, the alternative would be to, as
far as possible, manufacture products with local raw materials
and sell them primarily in the wider region.
Instead of a free trade zone, one could consider the model
of an “especially promoted area,” for which pro-investment
rules would apply. Internationally, conditions such
as the following are usual:
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Temporary tax exemption for business start-ups
Tax breaks for international investors
Easy credit conditions and guarantees
Free rent for three years
Subsidies for every local employee
At first, the focus should be on attracting manufacturing
firms (SMEs). Furthermore, service providers such as
business, tax, and personnel advisors, lawyers, electricians,
and suppliers will be needed. A one-stop shop for investors/business
start-ups would complete the range of services.
There could be also targeted attempts to attract business
start-ups; a business-plan competition could provide
an overview of the corresponding potential.
If the concept is accepted, there still remains a lot to do
before the industrial zone can be actively marketed: the
existing building has no windows and can only be used
for production purposes (in Germany, regulations require
daylight for production). It might be a good idea to also
install an expandable office building and a flexible production
hall, the floor space of which can be increased.
With the infrastructure in place, an advertising brochure
would be the next step (also on the Internet). Customers
must be recruited and tours for those interested organized.
Descriptions of services, guarantees, and products, confidentiality
agreements, offers, declarations of intent, rental
and service contracts, site regulations, statutes, and service
measures must be prepared. In addition, there must
be brochures for firms (How do I start up a company in
the industrial zone of Bar? How do I locate my business
in the industrial zone?)
Impact
The idea of an industrial zone in the harbor economic
zone of the city of Bar is basically promising. If this project
succeeds, it will certainly strengthen the entire economic
location. The firms and business start-ups that settled in
the industrial zone would enjoy plant-level benefits because
of the good infrastructure and available advisory
and other services. Thus, they could probably realize their
growth potential more easily and quickly than at other
locations. This yields the macroeconomic benefits for employment,
exports, and tax receipts.
Lessons learned
Much time has passed since presentation of the appraisal.
The decision-making process of the partners is not yet
complete. The debate is not only about utilization concepts,
but above all about the initial investment costs.
Only when the political debate promises to reach a consensus,
can advisory services and perhaps training measures
again be useful.
Recommendations
The prerequisite for a project such as the establishment
of an industrial zone is a political consensus that can win
a majority. GTZ cannot make this happen or replace it.
GTZ can, however, be a technical dialogue partner, which
offers partners – who must be in basic agreement – technical
and neutral advice on preparation and realization of
their concept (if needed, with the help of the GTZ construction
specialists BAUTEAM in OE 3140).
Contact
Ulrike Gantzer-Sommer, GTZ OE 3112
ulrike.gantzer-sommer@gtz.de
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