PROBLEMS AND PROSPECTS OF MAKING ADEN A FREE TRADE ZONE WITH REFERENCE TO STORAGE MANAGEMENT

Abstract

The Republic of Yemen is located in the South and South West of the Arabian Peninsula having boundaries with the Kingdom of Saudi Arabia from the North and North West borders Sultanate, of Oman from the East. The Arabian Sea from the South and the Red Sea from the West. The area of the country is approximately 555000 sq. Km. with a total population of 13 m. in 1993. The topography, of the region varies from beautiful plateaux, deserts mountains, valleys, and shores which are free from pollution and a great number of Gulfs and Islands through out the territorial waters of the country in the Red Sea. Babel-Mandab strait, Aden Gulf and the Arabian Sea. The variety of topography and climate have had its great effect in the development of the Yemeni civilizations which is different from other ancient civilizations in the Nile valley and Mesopotamia, as well as other ancient civilizations in the ancient East. The Yemeni civilization had developed on banks of valleys and routes of ancient world trade. In the field of transportation and communication, there are advanced and developed telecommunication network linking the country with the rest of the world. The Yemen Republic also possesses a mcdren local and international communication and telecommunication network, the direct international line exists in all governorates, in addition to telex lines, facsimile and cable lines and services as well as ordinary and express mail services, which are being provided at local and international levels. There are four main seaports on the Arabian Sea, Gulf of Aden and the Red Sea. fully equipped to receive all kinds of cargo ships and passengers ships. These ports are Aden Port, Hudeidah Port, Mukalla Port and Mokha Port. Aden port is a commercial and economic city of the Republic of Yemen. Aden is considered as one of the oldest and natural protected ports in the world. Since the ancient ages specifically in B.C., era, Aden held a monopoly over goods trade which was coming from Egypt and India where it witnissed the exchange of their goods. This fact shows the geographical and historical importance of Aden at that time. Aden was the second most important bunkering port in the world. The location of Aden is very favourable, only a few miles off the main sea route through the Red Sea and on to the near major "round the world" port of Colombo, Singapore and the Far East. In the 1950's and 1960's an early form of Free Trade Zone operated in Aden. Now, with trade between the East and West increasingly using the Middle East as an area of assembly, processing, storage and redistribution, Aden is uniquely suited to benefit from this recent development. The enviable location of Aden, excellent natural port, expenses of surrounding flat land and large potential work force provides it with immediate advantages to transform Aden into Free Trade Zone. The Government of the Republic of Yemen is trying today to make Aden capable of resuming its historic role in the field of international commercial exchange with the purpose of expanding relations between countries and nations looking for security, stability and peace on the basis of developing and enhancing mutual interests, friendship and respect between nations. In this study we propose to discuss the promising role of Aden Free Zone in the international economy and the prosperity it can provide to Yemen people. The study covers the following objectives (i) To study the economy of Yemen, (ii) To study the status of port of Aden at present, (iii) To study the establishment and development of Free Trade Zones, (iv) To study the storage management and problems, (v) To compare Jebel Ali and Aden Free Zones. The study comprises of eight Chapters (including summary and conclusions). Chapter I is introductory in nature and deals with the statement of the research problem and its significance, objectives, scope and limitation of the study. Besides these, it spells out the data base and methodology adopted for the study. iii Chapter II deals with the review of literature concerned with the research topic. Chapter III is the outline and review of the economy of the Yemen Arab Republic (YAR) before unification, economy of the People's Democratic Republic of Yemen (PDRY) before unification, economy of Republic of Yemen (After unification in 1990), economy Development in the Republic of Yemen. This Chapter gives the necessary background to the study. Chapter IV presents a study of the Port of Aden. In this study brief history of the port of Aden, Goals and objectives of Aden Free Zone development, ship bunkering at the port of Aden, the Aden port development and extension project and Free Trade Zone relevance to Aden (Jebel Ali Free Zone, Singapore). Chapter V is a study of establishment and development of Free Trade Zone, definition, goals and objectives, types of Free Trade Zone. The effects of Free Zone of the economy Gulf country and Yemen, policy assessment, model Free Zone for Aden with reference to Aden. Chapter VI is a study of development related to store-management, the storage function, store location, and current problems of storage and management in Aden Free Zone. Chapter VII is a comparison study between Jebel Ali Free Zone (Dubai) and Aden Free Zone (Yemen), advantages, disadvantage of Free Trade Zone and Review of international experience (in the Middle East, in the Indian sub-continent, the Nokhadka Free Zone, Free Zones in the Mediterranean). Chapter VIII presents summary, conclusion and suggestions of the study. The major finding of the study are as follows : 1. Aden has benefited from its advantageous location, very close to the main international shipping routes passing down the Red Sea and across the Indian Ocean, and the savings in transportation cost by sea compared with other Free Zones in the area, availability of a skilled and trainable work force, with current salary levels of expectation low by international standards. iv 2. The Free Trade Zone at Aden can take the lead in demonstrating to the rest of the Republic of Yemen the value of producing for the domestic and international markets using domestic resources (natural gas and petroleum and agricultural). 3. The history of retailing in the port of Aden has proved the importance of good organization and management, the services at Aden port is very satisfactory. 4. From the comparison of the study of Free Zones Jebel Ali and Aden finding : i) Aden Port is better, it save time and fuel, ii) Aden provides training and experience to national labour but labour in Jebel Ali mostly comes from foreign countries, iii) The geographical historical and economic importance of Aden is more significant than Jebel Ali. iv) Aden Port is one of the oldest natural ports in the world, the area is wide open and the traffic of ships is very hub in Aden, but Jebel Ali is artificial port and is very new port, and is very closed port.