Gwadar was highlighted as the future port of global investors at an international conference on 'Free zones, science and technology parks, enterprise zones', jointly organised by World Free Zone Convention (WFZC) and World Customs Organisation (WCO).
The conference was held at the WCO headquarters in Brussels, Belgium, on June 5 and 6. According to a report prepared by Sheikh Javaid, Chairman, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) standing committee on export processing and free zones, who attended the conference, Gwadar was also introduced as commercial hub of the region.
The report, available here on Tuesday, said that the conference was told that Gwadar, when fully operational, would be capable of catering the requirements of international trade between CAS countries, Middle East & Near East and Far East. As a result of the wide coverage by media, considerable interest by investors of the world had been recorded for investment in projects in Gwadar.
WFZC is UK-based international organisation engaged in providing knowledge and information to free zone stakeholders, ie, managers, operators, customs and port authorities, transporters, investors, financial institutions, etc. It thus provides a fora for guiding concerned institutions and personnel not only for establishment of new free zones but also to suggest ways and means to improve the working of existing zones for achieving the targets set for each unit.
The report says that Mike Schmitz, Director, World Customs Organisation, Brussels, mentioned about a policy of understanding and cooperation and said that certain countries were executing examination of goods and documents on behalf of each other to avoid duplication of work at the points of origin and destination.
A similar system has been introduced at Port Qasim for Pakistan's exports to the United States whereby scrutiny of goods is carried out through scanning the containers by a joint team of Pakistan and US customs to avoid re-examining of goods at destination in US. It was also emphasised that simplification of documents and customs procedures should be ensured to achieve faster movement of goods in the supply chain.
Adel Abdel Maged Masoud, First Under-secretary and head of Free Zones sector, GAFI, from Cairo, spoke on setting up and monitoring zone customs bases in public and private zones and compliance issues. His main points for discussions included role of Free Zones relationship between Free Zones and customs bases. Egypt has developed Free Zones with dedication and has provided a distinguished investment regime to the investors.
There are two types of Free Zones in Egypt, namely, the Public Free Zones, and Private Free Zones. There are 1000 units working in Free Zones regime in Egypt. Simplification of procedures and freedom to export and import was also ensured in Free Zones in Egypt.
The report said that this issue is hitting the investors hard in Pakistan these days and it is reported that survival of EPZ units is becoming difficult day by day. Investors are agitating over the regulation of 80-20 and it is said that a considerable number of units in KEPZ have closed down.
Mao Xintang, Vice-Chairman and Secretary General of China Free Trade Zone and Export Processing Zone, said that ShenZhen Special Economic Zone (SZSEZ), established in 1980, was launched as the first Special Economic Zone in People's Republic of China. It is said that ShenZhen's economic growth is among the world's most robust and fastest growing Free Zones and, by 2010, the annual GDP of ShenZhen City would rise to $12000 per capita.
The report mentions that Pakistan's importers have been in contact with ShenZhen Free Zone and have been importing merchandise of a sizeable volume from the zone.
China claims to have following free zones in the country: Export processing zones 59; free trade zones 15; bonded ports 4; bonded logistics parks 8; and cross-border industrial park 1. Special zones of China are seen as roadmap and many countries of the world have followed the special economic zone strategy to give a boost to their economy. These countries include India, Iran, Jordan, Poland, Kazakhstan, the Philippines, Russia, Ukraine and Pakistan.
China is helping Pakistan develop the 'Haier-Ruba' economic zone near Lahore, and another zone is likely to be set up in Gwadar. The conference noted with great interest the Chinese efforts in the area of establishing free zones to support its economy. The Chinese government also encourages outward foreign direct investment (FDI). The outflows amount to $16.1 billion, placing China at 13th position in the world, with stocks rising to $73 billion mark.
The report summarises that free zone concept is claimed to be an ideal situation for the betterment of economy of a country. The world is attracted by free zone ideology, and most of the countries of the world, including China, Pakistan, Bangladesh, UAE and others, introduced and amended their policies so as to induct and follow the ideology.
The world has recognised free zone as an ideal solution. These zones are established under different titles eg export processing zones, special economic zones, and science and technology free zones, etc.
There are about 3000 free zones in the world, and thousands of industries, service units and offshore trading and warehouses are operating under the free zones flag. Special economic zones of China, Panama, UAE and Shannon free zone, Ireland are considered successful zones of the world.
The report concludes by pointing out that departure from public sector control to private sector was suggested by leading advisers, especially in cases where zones are not giving desired results for betterment of country's economy in the form of increased exports and investment.