- September 9, 2021
- Posted by: adminer
- Category: Free Trade Zone
Questions have been flowing in from this window in thefreezonechannel website. We have resolved to been taking the answers one after the other and publish for stakeholders’ readership and critics.
The first in this series is the advantages of the various ownership structures of Free Zones: public zone, private zone, public private partnership.
In this article I shall take on the explanation of public zone with few references where it has worked well. I shall take on others in due course.
A zone is Public when it is ﬁnanced, developed and owned by either the Federal government or a State government and controlled through a public authority.
Proponents of Public Free Zones enumerate the followings as reasons for encouragement of public zones:
First, a Free zone is planned with the clear objective of creating jobs, attracting foreign investments, improving technology and technology transfer, increasing labour skills, and having positive eﬀects on the economy of a region or country. These are tasks of government since the beneﬁts are social, and have broad impact on the whole country, not just a part of it.
Second, a Public Free Zone owes equal opportunity to any company interested in investing in it as against Private Zones that can pick and choose clients. Thus, Public Zones increase possibilities for small ﬁrms desiring to grow or invest in situations where these social beneﬁts would not be considered by the management of Private Free Zones.
Third, a Public Free Zone is the ﬁrst project for a government seeking to increase the industrial power of a country or state for wider social beneﬁts. This is a subject of little interest to a Private Free Zone with consequences aﬀecting individual investment decisions.
Perhaps, some may think that public projects do not work because of lack of interest or laziness of the oﬀicers, too much red tape, indecision, or other more serious criticisms such as inﬂuence peddling, string pulling, or to state it more strongly, corruption.
Nevertheless, it is also true that many Free Zones under Public administration have generated wealth, transfer of technology, access to international markets, with positive eﬀects on the local economy.