Free zones are facing an uncertain period as Covid-19 hinders their activity across the globe, writes Marina Leiva.
With many of them heavily reliant on manufacturing and export-led activity – and therefore unable to participate in the great migration towards working from home that is being seen in other sectors – the zones are facing having to remodel and put into place emergency measures in order to come out of the Covid-19 crisis intact.
A survey conducted at the beginning of April by the Kiel Institute for the World Economy (IfW Kiel) in partnership with the World Free Zones Organisation (World FZO) focusing on the impact of Covid-19 on free zones showed that, on a global scale, zones are at the sharp end of the disruption brought on by the pandemic. Some 91% of the zones surveyed reported limitations to their production due to lockdown restrictions.
According to the UN Conference on Trade and Development (Unctad), on a global level there are about 5,000 free zones spread across 140 countries. Their form varies widely, but broadly speaking free zones – or, more broadly categorised, special economic zones – are designated areas within a country that enjoy eased taxation, and measures to incentivise and attract business.
Read the full article on whether free zones could play an important role in economic recuperation here.