DUBAI: Having established their importance to the UAE economy, the country’s free zones are now focused on building a global value chain that supports the increasingly important pursuit of sustainable economic growth.
“Free zones have rapidly expanded because they offer a proven investment and economic development tool for the global value chain,” Dr Mohammad Al Zarooni, Chairman of the World Free Zones Organisation, said at the annual conference and exposition of the American National Association of Foreign Trade Zones in Los Angeles last month. “With an ever-shifting macroeconomic landscape, the role of free zones as hubs for economic activity has impacted the dynamic of international trade investment flows and manufacturing supply chains,” he added.
The UAE is home to nearly 40 free zones specialising in a variety of business sectors, from media and advertising to technology and environmental business. Last year, they accounted for approximately 33 per cent of the UAE’s non-oil trade and 37 per cent of Dubai’s non-oil trade. Free zone growth has been in line with the country’s focus on foreign trade, investment and industry sectors. In total, free zones accounted for trade worth Dh269.6 billion in the first six months of last year, as compared to Dh250.9 billion in the corresponding period of 2013, according to the Federal Customs Authority. Official data for the whole of 2014 was not available, but the value of trade at Dubai’s free zones alone is expected to grow 5 per cent this year to reach Dh515 billion versus Dh489bn in 2014, according to local news agency WAM.
Sources at the Dubai Customs and the Chamber of Commerce say the value of trade at the emirate’s free zones could even soar by 7 per cent this year, WAM said.
As a testament to the success of the principle of free zones, that annual total is nearly double the value of trade for the whole of 2009, which was Dh286 billion.
Among the most successful has been the Dubai International Financial Centre (DIFC), which expects to triple in size over the next ten years as it aims to position itself as the region’s most prominent banking hub, in spite of competition from the new Abu Dhabi Global Market, DIFC governor Essa Kazim told Reuters. While the centre’s growth initially came mainly from European and US companies, half of the targeted expansion for the next decade will come from other emerging markets in the south-south trade corridor, including Latin America, Africa and South Asia, in particular India and China.
Indeed, much of the zones’ growth has come from assiduously courting international companies to invest in the UAE, and benefit from the country’s strategic geographic location as a trading hub between east and west.
Last month, Abu Dhabi Ports, the master developer, operator and manager of industrial zones and ports in the emirate, showcased the facilities of its Khalifa Industrial Zone Abu Dhabi (Kizad) and Khalifa Port to Indian businessmen at an invitation-only event. T.P. Seetharam, the Indian Ambassador to the UAE, delivered the keynote speech at the event, which attracted over 70 top Indian businessmen from across the UAE.
“As Indian businesses based in the UAE and India are keen to expand their business, we are happy to introduce the unique offerings of Kizad and Khalifa Port to them,” said Captain Mohammad Juma Al Shamisi, CEO of Abu Dhabi Ports. “Kizad’s outstanding access to markets, world-class infrastructure and dedicated investor support, with Khalifa Port at its doorstep, will prove attractive to their businesses and expansion plans. I am confident that our offerings have the potential to support efforts to boost trade ties between India and the UAE.”
