Prioritize special economic zones establishment through a multi-criteria decision-making approach: A case study on the federal states of Somalia

Abstract

This paper aims to present the analysis results on the feasibility and assessment of Special Economic Zone (SEZ) implementation across the seven Federal States of Somalia. Specifically, the research leads to defining the most important criteria used to evaluate different locations to establish SEZs, understanding the priorities and perceptions of different groups of stakeholders. Moreover, it allows quantitatively assess States’ conditions to reduce the risk of wasted investment or unsuccessful development. Finally, it ranks alternatives based on the stakeholder perspectives and territorial realities. The analysis is based on a multi-criteria decision-making methodology, specifically on the Analytic Hierarchy Process and Technique for Order of Preference by Similarity to Ideal Solution. On a national basis, the most relevant criteria, in the view of stakeholders, are the availability of a skilled workforce. The “economic prosperity” and “financial investments and external aid” are the most critical gaps commonly perceived in all the States. The most applicable State to locate a Special Economic Zone is Banadir Regional Administration, which is perceived to be relatively better off concerning Environmental Conditions, Workforce Skills, Finance and External Aid, and Government Policies and Security. Moreover, the discrepancy between Banadir Regional Administration, but also Somaliland, and the other States is alarming, showing that the more advanced States are the ones that have a higher level of security, population, and also more reliable infrastructure. This information is vital for government and policymakers to support less developed countries' economic and social growth.