Asian free zones benefiting from new global economy, say experts
Foreign investment shifting to emerging markets in Asia and Middle East, say HSBC and WFZC chairman
Asian free zones have successfully reinvented themselves to survive the global recession and have succeeded in attracting foreign direct investment faster than the West, top experts said today.
Speaking at the World Free Zone Convention, in Ras Al Khaimah, Graham Mather, World Free Zone Convention Chairman and President of European Policy Forum, London & Brussels, said: “Newly industrialising countries are displaying the greatest economical growth. Asia is the hotspot both in its own economic performance and in the demand it creates around the world.”
”It is interesting that free zones have prospered in recent years in the Asian growth hotspots. China’s special economic zones have been a major contributor to its powerful, sustained growth performance while in India, over 500 zones have been designated in the three years since the Indian government's zone programme began,” he added.Mather quoted a World Bank report which suggests that free zones can overcome policy distortions, procedural inefficiencies and infrastructural inadequacies in national economies. “The continued development of focused investment promotion and export competitiveness mechanisms such as SEZ can provide a simplified, regulatory environment”, the World Bank emphasises.”Free zones and Export Processing Zones have the opportunity to differentiate themselves and make themselves especially attractive to investors in terms of facilities, services and most importantly streamlined procedures and purpose-built technologies,” he added. The 10th edition of World Free Zone Convention is hosted by Ras Al Khaimah Free Trade Zone (RAK FTZ), under the patronage of His Highness Sheikh Saud Bin Saqr Bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Ras Al Khaimah.
Liz Martins, from HSBC Middle East’s Global Banking and Markets division, said that GDP in Asia has not only recovered, but surpassed previous peak levels, whereas the recovery in the West has been made up of strong growth levels from a very low base.
“While output levels remain well below their 2007/08 peaks in the US, Europe, the downturn in Asia was a mere interruption of an overall upward trend. Going forward, the ongoing deleveraging process will keep demand in the West subdued, as consumers and companies pay down debt rather than invest and spend,” she added.
Martins added that emerging markets were increasingly insulated from the problems of the West, via south-south trade and investment flows, and high commodity prices (which continue unabated in spite of still sluggish demand in the US and Europe).
“Indeed, one could argue that the problems of the West are in fact in part a consequence of emerging market success over the last few decades. Foreign labour from the emerging world has squeezed wages in developed markets, and foreign capital (particularly from China and the
Middle East) has financed a credit binge in the US and elsewhere,” she said.
RAK FTZ hosted the two-day conference and exhibition, under the theme ‘Gathering Global Support For Free Zone Industry’ and the slogan ‘Harnessing economic zones worldwide to the cause of economic recovery, dynamic growth and strengthened world trade.’
The convention concluded today with the appointment of a team of “Zone Ambassadors” to further reinforce the positive image of the zones and build goodwill between the different zones. “RAK Free Trade Zone is pleased to create the platform for global free zones to interact closely with one another and explore opportunities that can eventually benefit their clients,” said Oussama El Omari, CEO of Ras Al Khaimah Free Trade Zone.
