PM: Economic zones must adapt to serve home countries better

WESTERN BUREAU:

Prime Minister Andrew Holness has declared that special economic zones (SEZs), localised areas subjected to preferential economic regulations, must adapt to the world’s perpetual challenges in order to effectively serve the countries where they are based.

Holness made the call on Monday while addressing the opening day of the first annual Global Alliance of Special Economic Zones (GASEZ) Conference at the Montego Bay Convention Centre in Rose Hall, St James.

The June 13-17 conference is being held in conjunction with the eighth Annual International Conference and Exhibition and is the first major conference to host international dignitaries since the onset of the COVID-19 pandemic in 2020.

“The COVID-19 pandemic, climate crisis, the conflict in Europe, and geopolitical tensions elsewhere are challenging the world order. As we know, companies and governments are recognising the risks and challenges associated with not-distant supply chains and are exploring nearshoring and reshoring,” said Holness.

Nearshoring is the transferring of businesses to nearby countries while reshoring is moving a business from overseas back to its country of origin.

Earlier this year, Industry Minister Aubyn Hill had identified SEZs as a key sector that could boost Jamaica’s economy. Jamaica has established more than 160 SEZs locally since 2018, including Cathexis Limited in Kingston, Happy Sandy Bay in Hanover, and the Montego Bay Technology Park and Free Zone in St James.

Holness pointed out that the number of SEZs or free zone sites worldwide currently stands at more than 7,000, a significant increase over the approximately 200 that were recorded in 1980.

“Free zones have seen tremendous growth over the last 50 years and have become an integral part of global supply and value chains. According to the Organization for Economic Cooperation and Development, free zones are responsible for approximately 20 per cent of global trade in goods, and according to the United Nations Conference on Trade and Development, approximately 90 per cent of SEZs are located in developing countries,” said Holness.

Rapid expansion of free zones has been driven mainly by foreign direct investment, higher exports, and job creation.

James Zhan, director of UNCTAD’s Division on Investment and Enterprise Development, affirmed the readiness of all member states to combine forces and work towards the improvement of SEZs for global economic benefit.

“We are ready to work together to catalyse the transformation towards a new generation of SEZs, and for that we would like to work together to advance the 2030 sustainable development agenda,” said Zhan.

“The multiple challenges that we are facing reaffirm that we cannot work alone; we need to tackle global stress, and that requires strong innovative partnerships, and therein lies the strength of this alliance.”

Monday’s session was capped off by a signing ceremony for the establishment of GASEZ, in which Holness participated along with Dr Mohammed Al Zarooni, chairman of the World Free Zones Organization, and other dignitaries.