The chief executive of the World Free Zone Organization, Samir Hamrouni, talks about what makes a successful free-trade zone, and the challenges all zones face.

Q: What makes for a successful free zone – and what single thing do all successful free zones have in common? 

A: Without doubt, technological advances are changing the way businesses operate. [Developments in technology are creating] a new ecosystem, which is often at war with the old or traditional ecosystem. So businesses that operate in the old ecosystem have to develop resilience to withstand the pressures of new ecosystem. This is a constant process of evolution. Free zones are aware of the challenge and we at World FZO are helping them under our umbrella to identify and cope with challenges. The ability to anticipate what is in store in future and build capability to adapt to these changes will be the primary requirement for free zones to be successful.  


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Q: What are the main challenges facing global free zones today, and how can they best cope with them? 

A: The global sociopolitical and economic landscape is evolving constantly. With such evolution come challenges. As you will appreciate, evolution is a constant process, especially in the business world as we are buffetted by what is called ‘VUCA’ – volatility, uncertainty, complexity and ambiguity. Also, technological advancements are often disruptive, and those in businesses have to be in a state of readiness to face tech challenges and, indeed, embrace technology. The world is becoming increasingly interconnected and global value chains are now the norm, rather than the exception. There are also issues related to environment protection, skill development, de-risking business growth, adapting to changing geopolitical situation and, more recently, the protectionist policies of some countries. Free zones have to be [aware of] the rapidly changing landscape and appropriately adapt themselves.

Q: Are the recent trends of protectionism and populism impacting free zones?

A: A big challenge in recent times is growing protectionism and the threat of escalating trade friction. Free zones are not immune to these recent trends. It is well known that the [political environment] around the world is becoming increasingly complex. Countries face domestic political demands while simultaneously meeting international obligations. Policymakers in most countries are facing the challenge of how best to judiciously reconcile this conflict. The threats have to be contained. It is not only an economic or business challenge, but also a political challenge.\

Q: What features will characterise the free zones of the future? 

A: The Free Zone of the Future Programme [FZF Programme] – a global initiative for local prosperity – seeks to empower free zones and assist them in building and contributing to a sustainable and prosperous future, one that supports the growth of local economies and communities while simultaneously benefiting from global market dynamics.

The FZF Programme consists of three pillars, including best-in-class practices, innovation and sustainability. In turn each of these pillars contains three elements. Best-in-class practices include knowledge-based, certified and tech-ready zones; innovation includes entrepreneurial, SME developer and innovative zones; and sustainability includes environmentally friendly, good-place-to-work and socially responsible zones. Conceptually, the FZF Programme seeks to promote economic growth, boost industrial and commercial activities, create livelihood opportunities, foster innovation, utilise natural resources optimally and achieve all these and more by networking and striking appropriate partnerships.

Q: What advice would you offer to managers of free zones that who trying to attract more inward investment? 

A: Global investors are attracted because of political stability, business-friendly policies, the availability of skills, growth prospects, the potential for attractive return on investment and so on. Free zones should focus on technology absorption, skill development, benefiting from the global value chain, environment protection and related areas.  

This article is sourced from fDi Magazine
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