Special Economic Zones are a powerful development strategy to lure foreign direct investments but their success depends on the host economy’s position in the global context, a new study has found.
SEZs have multiplied over the years to around 4,300 in over 130 countries from an estimated 500 in 1995, strategy consultancy firm Oliver Wyman said in a report on Monday, analysing the relevance of these zones in global economic conditions.
The economic zones, which across the world employ 68 million workers, have evolved from a relatively simple proposition of incentives to investors to an increasingly diverse range of concepts, designed to achieve more specific development objectives. SEZs have played a vital role in the economic diversification of the Arabian Gulf, a region that accounts for about one third of the world’s proven oil reserves.
“Special Economic Zones evolve in four stages, and the GCC countries, are currently under stages I and II, namely the Special Manufacturing Zones and Special Service Zones,” Anshu Vats, a partner at Oliver Wyman, said. “Each focusing on leveraging on abundance of low cost land and labour to overcome the absence of a domestic market through export.”
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The GCC economies, which rely heavily on the sale of hydrocarbons for revenues, had come under intense pressure during the three-year crude price slump, triggering austerity and economic diversification efforts across the region. Although oil prices have recovered from the $30 per barrel trough in the first quarter of 2016 to above $70 per barrel in recent months, regional governments are pushing ahead with plans to create more specialised economic zones to cut their dependence on oil.
Saudi Arabia, the world’s biggest crude exporter, last year unveiled plans to create a $500 billion futuristic specialised zone extending into Egypt and Jordan. The kingdom’s sovereign wealth fund, Public Investment Fund, which is behind Neom, is also developing a Red Sea project that includes a nature reserve, diving in coral reefs and heritage sites on about 50 islands. Both these projects are in the third stage of SEZs’ evolution that includes new technology frontiers, research and development labs and tourism.
“There is a natural temptation to aspire to the most innovative stage III, but there is still the need for an infrastructure to accommodate this move,” Mr Vats said.
“We can understand the need for creating these zones as the appeal is clear; knowledge based economic development with high economic value add.”
What is less clear, though, is how these zones could succeed when global competition for dominance in such sectors is fierce. "Selecting which sectors to rely on and designing the right value proposition will constitute a SZE’s success,” he sais.
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
STAY%2C%20DAUGHTER
%3Cp%3E%3Cstrong%3EAuthor%3A%20%3C%2Fstrong%3EYasmin%20Azad%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPublisher%3A%20%3C%2Fstrong%3ESwift%20Press%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAvailable%3A%20%3C%2Fstrong%3ENow%3C%2Fp%3E%0A
The Beach Bum
Director: Harmony Korine
Stars: Matthew McConaughey, Isla Fisher, Snoop Dogg
Two stars
All the Money in the World
Director: Ridley Scott
Starring: Charlie Plummer, Mark Wahlberg, Michelle Williams, Christopher Plummer
Four stars
Sui Dhaaga: Made in India
Director: Sharat Katariya
Starring: Varun Dhawan, Anushka Sharma, Raghubir Yadav
3.5/5
PSL FINAL
Multan Sultans v Peshawar Zalmi
8pm, Thursday
Zayed Cricket Stadium, Abu Dhabi
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3ESmartCrowd%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%0D%3Cbr%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3ESiddiq%20Farid%20and%20Musfique%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%20%2F%20PropTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3E%24650%2C000%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2035%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3ESeries%20A%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EVarious%20institutional%20investors%20and%20notable%20angel%20investors%20(500%20MENA%2C%20Shurooq%2C%20Mada%2C%20Seedstar%2C%20Tricap)%3C%2Fp%3E%0A
Everton 1 Stoke City 0
Everton (Rooney 45 1')
Man of the Match Phil Jagielka (Everton)
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
ARM%20IPO%20DETAILS
%3Cp%3E%3Cstrong%3EShare%20price%3A%3C%2Fstrong%3E%20Undisclosed%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ETarget%20raise%3A%3C%2Fstrong%3E%20%248%20billion%20to%20%2410%20billion%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EProjected%20valuation%3A%3C%2Fstrong%3E%20%2460%20billion%20to%20%2470%20billion%20(Source%3A%20Bloomberg)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ELead%20underwriters%3A%3C%2Fstrong%3E%20Barclays%2C%20Goldman%20Sachs%20Group%2C%20JPMorgan%20Chase%20and%20Mizuho%20Financial%20Group%3C%2Fp%3E%0A
Three ways to limit your social media use
Clinical psychologist, Dr Saliha Afridi at The Lighthouse Arabia suggests three easy things you can do every day to cut back on the time you spend online.
1. Put the social media app in a folder on the second or third screen of your phone so it has to remain a conscious decision to open, rather than something your fingers gravitate towards without consideration.
2. Schedule a time to use social media instead of consistently throughout the day. I recommend setting aside certain times of the day or week when you upload pictures or share information.
3. Take a mental snapshot rather than a photo on your phone. Instead of sharing it with your social world, try to absorb the moment, connect with your feeling, experience the moment with all five of your senses. You will have a memory of that moment more vividly and for far longer than if you take a picture of it.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Brief scores
Barcelona 2
Pique 36', Alena 87'
Villarreal 0
