Ras Al Khaimah: RAK FTZ is hosting the World Free Zone Convention taking place for the first time in the region in November this year coinciding with the zone's 10th anniversary.
"Our main focus should be on our global reach. Especially during the world crisis, countries must take care of SMEs for sustainable development and growth and strengthen the laws globally," said Shaikh Faisal Bin Saqr Al Qasimi, chairman, RAK FTZ, told Gulf News.
Free zones globally have multiplied to around 2,300 within 119 developing and transition countries, altogether accounting for $200 billion (Dh734 billion) of gross exports a year, employing some 40 million workers and another 60 million indirectly, said Graham Mather, chairman, World Free Zone Convention.
"Despite economists being uncertain how the crisis, although the consensus is the world is slowly emerging from it, will affect the productive economy, free zones are at the forefront of innovation, trade generation and growth." China and India have been growth hot spots, the latter added 500 zones within three years. Free zones allow for greater scope in cutting logistic costs more important than production costs, largely thanks to streamlines procedures, according to the World Bank.
"The success of the free zone movement owes much of its success to the development of zones in the UAE. They pioneered and the UAE free zone system is a model emulated by other countries round the world. The design and regime constantly evolves," Mather said.
Negative governmental responses globally to the economic crisis could be counteracted by maximising the use of free zones continuing direct foreign investment, he added.
He calls for tighter banking system regulations, as banks were responsible for the economic crisis and their recapitalisation to help them lend again.
"We need less bad behaviour by banks and more good behaviour by free zone. The future growth comes from SMEs not giant companies," he sums it up. Competition is good as free zones by nature attract FDI this way.
