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An Overview of major trends in Free Zone Development.



The problem with most  human endeavour is the problem of moving with the tide and effect changes when it is needed.
There have been profound changes in the Free Zone concept and development approach, since the first modern zone was established in Ireland in 1959, and even more fundamental changes are foreseen over the next decade with full implementation of the WTO Agreement.

This can be consented to by the expansion in the types of Zones in both developing and industrialised countries. Countries are now facilitating the development of Zones to meet specific objectives and target markets. Traditional Export Processing Zones (EPZs) are increasingly being augmented and most times supplanted by new, more flexible arrangements. Hybrid EPZs are the preferred model in most Central and East European Countries and increasingly among many Latin American countries. Commercial Free Zones have been the traditional development norm among most Middle East and North African Countries, but this is a recent innovation in Asia, where Zone development has emphasized export manufacturing.

Free Zones were traditionally developed as isolated enclaves both in terms of their underlying policy framework, and in terms of geographic location. Access to a generous set of incentives and privileges were rigidly controlled. Qualifying firms typically had to be 80-100 percent export oriented, for firms engaged in manufacturing activities.

Zones were physically located in relatively remote areas and near transport hubs, viewed primarily as “growth poles” for regional development. Zones were exclusively developed and managed by government bodies.

The above rigid approach has changed fundamentally over the past two decades and it will continue to change, one of the major changes in thinking has been to permit Zones to develop country wide and not restrict them to growth poles or other designated areas. This may be in response to the growing desire of private Zones developers and the increasing number of private property development groups.