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Free Trade Zones in UAE and Economic Development - Research Paper Example

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Instructor: Contents Contents 2 Introduction 3 Abu Dhabi Airport Free Zone (ADAFZ) 3 Positive Contributions to the UAE 3 Negative Contributions to the UAE 4 Benefits to Investors 5 Strategies for Growth 5 Dubai Media City Free Zone (DMC) 6 Negative Contributions to the UAE 7 Strategies for Growth 8 UAE Free Trade Zones Employment Rules 9 10 Conclusion 11 References 12 Free Trade Zones in UAE and Economic Development Introduction United Arab Emirates (UAE) has established many Free Trade Zone Areas in order to provide an incentive for businesses to be located in the region…
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Free Trade Zones in UAE and Economic Development
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Download file to see previous pages This paper focuses on two companies only i.e. Abu Dhabi Airport Free Zone and Dubai Media City Free Zone. Abu Dhabi Airport Free Zone (ADAFZ) Positive Contributions to the UAE The Abu Dhabi Airport Free Zone is a business and logistics park which is being established by the Abu Dhabi Airports Company (ADAC). The creation of ADAFZ is a milestone for Abu Dhabi to globally establish itself as a leading business centre. Expansion of the airport will enable passenger traffic to shoot from the current 7 million to over 40 million per year. Cargo capacity will also be boosted to two million tons from the current 150,000 tons per year. (, 2011). According to, multiple business ventures are being established ranging from logistics, aviation and aerospace, consultancy, business development, computing and information technology, electronics, express transport, medical equipment and pharmaceuticals. Various amenities have been put together under one roof and conveniently integrated to provide the best services for investors (, 2011).  The free trade zone provides the locals with better goods at subsidized prices hence boosting the economy. The cheapness of goods is usually as a result of cheap production costs in addition to cheap imported labor. The UAE is freed of re-tasking its resources and instead focuses on its comparative advantages. ADAFZ and other free trade zones function as economic laboratories, which allow UAE governments, to learn what will be most beneficial to their economies over a long time (, 2011). Negative Contributions to the UAE Abu Dhabi Airport Free Zone may appear as an equal opportunity for everyone, but, these advantages come along with some disadvantages. The disadvantages extend for UAE is related to the technology level which means that the less industrialized emirates may suffer a disadvantage till they technologically develop. When Abu Dhabi opened its borders to the other emirates to be in the same free trade zone, it also invited fierce competition as well. This means that the whole of UAE competes with one another (, 2011). The free trade area may also economically develop the area around the airport more than other regions in Abu Dhabi and UAE as a whole. This region may attract more foreign investors than other regions which may lead to economic underdevelopment of some other areas in the free trade zone. The underdevelopment may also impact the Abu Dhabi’s (, 2011). The issue of opening of borders brings the challenge of corporations seeking out for the lowest labor and environmental standards in order to minimize its production costs hence pressuring for low working standards. Furthermore, the transparency and absence of strict regulations of ADAFZ make it an attraction for illicit investors to launder crime proceeds and maybe finance terrorism (, 2011). Benefits to Investors According to Abu Dhabi (2011) an investor has to lease the facility in ...Download file to see next pages Read More
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