The UAE’s
free zones must brand themselves more aggressively if they are to survive in a post-recession
climate, the director general of Fujairah Free Zone said.
The state-backed trade zones,
which offer incentives including 100 percent ownership to foreign firms, will
need to match their selling points closely to the new economic realities, Sharief
Habib Al Awadhi told Arabian Business.
“What we
have failed at in the last few years, with respect to all the zones, including Fujairah
Free Zone, is that we did not develop our [zone’s] brands,” he said.
“People
nowadays know the available facilities, you don’t need to go anywhere in the
world and say, ‘Come to the UAE.’ You need to say, ‘why should you come to the
UAE in particular? What can we provide your industry?’” he said.
Incentives
used previously, such as offering cash and government partnerships to companies
establishing offices in free zones, had no place in the new climate, Al Awadhi
said.
“Though
some companies talk about offering some kind of direct support or some kind of
finance, it seems, to be frank, dishonest,” he said.
“To offer
finance you have to have a lot of securities, a lot of support… it’s not easy,
and in the current scenario, I don’t see any zones wanting to indulge [in it].”
Trade
through the UAE’s free zones hit $78bn in 2009. Fujairah, located on the east
coast of the UAE, opened one of the country’s first free zones in 1987.
The emirate
is expecting significant foreign direct investment in its petrochemical
industry in 2011, and is eyeing $100m of investment by year-end, Al Awadhi
said.
Investment is expected to be divided amongst local
and foreign investors, in a rough 60-40 percent split, he said.
“Many
people think that’s a very small number, but we’re not just talking about
trading and representative offices, we’re talking about people coming to put up
a proper base in the UAE, a proper office, a proper existence,” he said.
“People
talk of very big numbers and that’s what has hurt us over the last few years. They
talk a lot of crazy numbers, crazy figures, but when it comes down to realities,
there’s not much there.”
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