53% of free zones operating as normal amidst pandemic

Free zones across the world are optimistic about their growth this year as they prepare to become ‘future ready’ in a post-pandemic world, according to the latest indicators disclosed by the Free Zones World Economic Barometer.

In its latest report, the World Free Zones Organisation said about 40 per cent of free zone organisations expressed positive outlook on their performance during the fourth quarter of 2020 and are looking at the first quarter of 2021 to be following the same trend.

World FZO further recommended that digitalisation, innovation, a review of business performance and management systems, exploring new methods of financing, and introducing an enterprise risk management framework can also boost the recovery process of free zones.

“Amidst the pandemic, free zones have been doing their best to ensure business continuity and resume normal activities. As with challenges, we also see the opportunities as economies work towards greater regional coordination and integration with the support of policy reforms and use of latest technologies,” Dr Mohammed Al Zarooni, chairman of World FZO, said.

“Alongside these developments, free zones can be the most ‘future ready’ if they focus on recovering in the most sustainable way based on greater transparency in their environment, social and governance commitment,” he said.

The report further noted that investment, employment, and profitability of free zones showed improvement during the fourth quarter compared to the previous quarter of the same year.

During the third quarter of last year, 49 per cent of free zones surveyed by World FZO reported ‘normal economic conditions,’ which then moved up to 53 per cent in the latest survey conducted in December 2020.

Fast recovery

Analysts and experts said digitalisation, innovation, and review of business performance and management systems offer window for fast recovery of free zones across the globe.

“During the pandemic governance and innovation contributed significantly towards revival and growth across many industries,” Saad Maniar, senior partner at Crowe, told Khaleej Times.

“The manner in which the whole pandemic situation is being managed by the UAE government also played a significant role in the sustainability of the companies within the free zones,” he said.

Atik Munshi - Managing Partner, Enterprise House, said free zones around the world are managed in a professional way and their performance too is monitored regularly.

“The UAE free zones and other free zones across the globe quickly adapt to changing business and economic conditions as they monitor the need. Most free zones have now embraced remote working, digitisation and other technology trends to be abreast to the new business requirements and hence their performance has been generally better then their mainland counterpart,” he said.

He said free zones in the UAE have quickly modified their working models and altered the requirements to suit the new normal, most have brought about new packages to suit small businesses.

— muzaffarrizvi@khaleejtimes.com