Free zones across the globe have been navigating unsettling waters since the beginning of the Covid-19 crisis. In fDi’s Global Free Zones of the Year 2021 awards, 70 zones participated in a survey where they detailed their short- and long-term adjustments following the Covid-19 crisis.
fDi created the excellence awards to single out the best in class for specific elements of their strategic adjustment.
Excellence award for covid-19 response
Winner: DMCC, UAE
Free zones were thrown on the frontline of the global response of the Covid-19 crisis as their business continuity was paramount in limiting the unfolding disruption of global value chains. They found themselves striving to shore up the global economy, while still safeguarding their own business model and success. The DMCC won the excellence award for its Covid-19 response. Dubai’s DMCC rolled out a comprehensive strategy to tackle the immediate fallout from the Covid-19 crisis to support, and further expand its tenant base.
Some of the key measures feature a business support programme; the largest incentive programme it has ever implemented; a renewed offer for international tenants featuring, among other things, a six-month free trial; incentives to diamond companies; targeted support of the food and beverage sector; flexible payments and banking options; focused and timely support; a push to go 100% digital with regards to onboarding admin; online engagement with a programme of virtual roadshows; and online webinars.
Highly commended: Waigaoqiao Free Trade Zone, China
Shanghai’s Waigaoqiao Free Trade Zone was highly commended for its Covid-19 response. As soon as Covid-19 got out of control in Wuhan in early 2020, the zone quickly developed an app to help companies resume work and production. At the same time, the zone was divided into 20 sub-zones and a government officer was assigned to each sub-zone to work with the property management for daily temperature checks and sign-ins, to keep the operation of the zone in order. The zone also supplied companies with personal protective equipment, infrared thermometers and disinfectants. As of March 11, 2020, 98.96% companies operating in the zone had resumed work, with 68,591 (65.19%) employees returning to their jobs. The zone also implemented a specific support package for small and medium-sized enterprises.
Excellence award for strategy pivot
Winner – Mauritius Freeport, Mauritius
If the short-term adjustment to the Covid-19 pandemic was vital for zones to support their tenants and guarantee business continuity, it soon became clear that the longer-term strategic adjustment forced by the pandemic was equally important for zones to secure their long-term success because of the deep changes unfolding in the global economy. Mauritius Freeport won the excellence award for strategy pivot following the Covid-19 crisis. The management of the port approached top Mauritian companies from various sectors, and encouraged them to use the port premises and incentives to implement a diversification strategy geared towards logistics and other port-related operations. The objective was to encourage companies to set up freeport and logistics infrastructural facilities, in collaboration with existing freeport developers, and to invest in promising sectors to mitigate the impact of Covid 19.
Highly commended — Global: Łódź Special Economic Zone, Poland
Poland’s Łódź Special Economic Zone (SEZ) was highly commended for its strategic pivot following the pandemic, which sharply accelerated the ongoing digital transformation across many different industries. Łódź SEZ’s long-term strategy “centres around digital transformation and prepares companies for the future shocks by making the processes more automated, and employees more qualified to work with the newest technologies”, the zone said in its survey. As part of this strategy, the zone put its weight behind the development of 5G connectivity and applications with industrial partners such as Swedish telecommunications company Ericsson enabling machine-machine communication and supply chain management.
Excellence award for ESG practices
Winner: Coyol Free Zone, Costa Rica
The pandemic also created incredible momentum for the rise of environmental, social and corporate governance (ESG) finance and investment, putting sustainability at the heart of any future conversation on economic development. Free zones were no exception to this; Costa Rica’s Coyol Free Zone confirmed the country’s track record in sustainable development and won the excellence award for ESG practices. The zone presented its first-ever sustainability report in mid-2021, highlighting a series of indicators that show its efforts to support Costa Rica’s economic reactivation and growth, in balance with the environment. These indicators feature employment indicators, education indicators and environmental sustainability indicators.
Highly commended: Cayman Enterprise City, Cayman Islands
Cayman Enterprise City has been highly commended for its environmental, social and corporate governance practices. The zone implemented a comprehensive recycling programme. It gave its tenants complimentary membership to its corporate social responsibility programme. With regards to governance, it has publicly reported annually since 2013 on how the concessions it receives are deployed and how the financial contribution of its activities impacts the wider economy. In 2020, it engaged with an independent global economist to provide an independent assessment of its project and development.
Excellence award for infrastructure investment
Winner: DMCC, UAE
Infrastructure availability and investment remain a key element in the recipe of success of zones across the world. Dubai’s DMCC won the excellence award for infrastructure investment. In 2020, it signed a memorandum of understanding (MoU) with Zug-based early-stage venture capital CVVC and CV Labs to launch a Crypto Centre in Dubai.
The now-launched DMCC Crypto Centre is a hub for the development and application of crypto and blockchain technologies. Also in 2020, the construction of the first phase of their Uptown Dubai district, Uptown Tower, reached 153 metres, with more than 32 floors completed. DMCC also completed an extensive review of Uptown District Masterplan to significantly reduce capital requirements and improve projected financial returns. At the same time, following the signing of the Abraham Accords, DMCC’s Dubai Diamond Exchange signed an MoU with the Israeli Diamond Exchange, following which DMCC opened a representative office in Tel Aviv.
In November 2020, DMCC also opened a representative office in Shenzhen, China, to better support Chinese businesses wishing to set up in Dubai. Among other infrastructure development projects, DMCC also launched a new medical science facility, a multi-level storage facility, announced the expansion of its coffee and tea trade centres, as well as the plan to launch a state-of-the-art cacao centre.
Highly commended: Dalian Free Trade Zone, China
China’s Dalian Free Trade Zone has been highly commended for its infrastructure investment. In April 2021, the three bonded zones in the zone were upgraded to comprehensive bonded zones, China’s highest bonded zone tier. The bonded zones have undergone a complete renovation with state-of-the-art infrastructures, including a blind-spot-free security system, non-interference security inspection facilities and a seamless sea-rail logistic network. In May 2021, the Dalian Free Trade Zone International Expo Center was opened for the first time. This Rmb600m ($92.5m) project is the newest expo centre in northern China. Additionally, the Dalian New Airport, 30 minutes away from the zone, is currently under construction. The new airport will cost Rmb26.3bn ($4bn) and is estimated to open in 2025.