The UAE has always been a strategic trading nation and it comes as no surprise that the introduction of free zones has ensured it remains a global logistics powerbroker.
It was in 1985 that the first free zone was officially established. Called the Jebel Ali Free Zone, it set the template for others to follow, and saw the arrival of increased foreign investment that helped diversify the economy. Imports were made duty-free and re-imports and full ownership of premises offered to businesses.
Jebel Ali Free Zone (Jafza) has since flourished into a major success story, although it took some time to develop. Jebel Ali Port was initially part of a planned complex that included a town, seaport and airport. However, political changes influenced the outcome of the project, with the port being the only infrastructure that was built. Sir William Halcrow and Partners, who served as consultants for Jebel Ali Port, proposed that a free zone should be attached to the port to encourage a wider variety of shipping companies to use it.
UAE’s first free zone
5 years later, in 1990, the unification of Port Rashid and Jebel Ali Port into a government owned company called Dubai Port Authority improved the movement of trade and broke down a lot of logistical barriers.
The likes of Mercedes Benz and Swarovski established themselves in the free zone and other notable companies started to see the benefits of expanding into the territory. The added introduction of cafés, restaurants and other commercial facilities was designed to show customers that it could be an attractive alternative to Dubai.
To encourage businesses, investments were made into purchasing new land, offices and warehouses. This saw existing businesses and new firms arrive to use the infrastructure, slowly developing a broader and more diverse commercial community within the zone.
Expansion plans ground to a halt in the mid-90s as there was a limited amount of land left on the seaward side of Sheikh Zayed Road. Working closely with Parsons UAE, a plan was created to develop land on the other side of the road in order to sustain the growth of the zone. Plans for Dubai World Central (Al Maktoum Airport) were well underway, and rather than concede this land to the proposed airport, Jebel Ali South was built.
Free zone success story
Thousands of businesses were operational in Jafza by the start of the millennium, which saw a new management strategy introduced to improve client support. Technology was used to develop better relationships, and rather than offering a service centred on addressing doubts about moving to the zone, supporting the direct needs of clients started to take precedence.
By the early 2000s, free zones began to appear across the UAE, with one present in every emirate. Jafza’s success enabled every free zone that followed to learn from their blueprint and develop their own economic strengths and advantages. Some critics have suggested there are now too many free zones in the country, although there can be no doubt about their significant contribution to the UAE’s strong financial standing.