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Mapping Free Zones in the Gulf: Trends and Dislocations Read chapter Read first chapter

2021 | OriginalPaper | Chapter

5. Elite Embeddedness in Free Zone Development

Author : Robert Mogielnicki

Published in: A Political Economy of Free Zones in Gulf Arab States

Publisher: Springer International Publishing

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Abstract

Gulf free zone development involved balancing the interests of royals, business elites, and other patronage networks. Leadership positions in major economic organizations, such as free zones, legitimized prevailing political structures in Gulf Arab states—especially in polities with fewer hydrocarbon resources. If ruling family members did not serve in free zones themselves, they often delegated development and management responsibilities to close allies and prominent families. In this manner, free zones provided an opportunity for ruling regimes to reorganize rent-seeking structures in a way that benefitted certain elite coalitions. For their part, Gulf business elites aligned their interests with free zone initiatives to embed themselves and their firms in broad, long-term economic development processes. Differing development aims and realignments of political institutions occasionally created tensions among free zone officials, ruling families, and regional governments. Free zones also extended institutional authority and state power beyond royal individuals and business-oriented elites. Free zone development absorbed key sectors of Gulf economies and established a state-led framework for private sector growth.

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previous chapter Free Zones in Oman, Saudi Arabia, Bahrain, Qatar, and Kuwait
next chapter Free Zones as Spheres of Regional Contestation
Footnotes
1
Interview 14, managing director of an economic zone consultancy and secretary general of a global EPZ association, remote call from Dubai, May 11, 2016.
 
2
Interview 52, remote interview question responses with Dubai Healthcare City, Dubai, UAE, July 26, 2016.
 
3
Shaykh Ahmed is also chairman of RAK Hospitality Holding, which oversees the management of the emirate’s assets in the hotel and hospitality industries, as well as chairman of RAK National Insurance Company, Falcon Technologies and Emirates Sports Culture Club.
 
4
Shaykh Khalid is also the chairman of the Emiri Diwan.
 
5
Interview 56, staff member at Ajman Free Zone, Ajman, UAE, August 11, 2016.
 
6
Interview 24, senior corporate manager of Fujairah Free Zone, Fujairah, UAE, April 18, 2016.
 
7
Interview 24, senior corporate manager of Fujairah Free Zone, Fujairah, UAE, April 18, 2016.
 
8
Crown Prince Mohammed bin Zayed Al Nahyan and Deputy Prime Minister Mansour bin Zayed Al Nahyan are chairman and vice-chairman of Mubadala, which owns Masdar.
 
9
These figures were part of a 2008 World Bank report (Akinci and Crittle 2008, 19).
 
10
Interview 29, partner at Dubai-based law firm, Dubai, UAE, May 11, 2016.
 
11
Interview 43, president of national association of foreign-trade zones, Washington, DC, June 17, 2016.
 
12
Umm Al Quwain’s free zone initially bore a royal name but changed to the Umm Al Quwain FTZ in 2014.
 
13
Hamad bin Jassim, a cousin of the former Emir Hamad bin Khalifa, operated as a prominent business broker in the government until Tamim bin Hamad took over from his father in 2013. This subtle shift in political institutions brought new social actors to the forefront of free zone development in Qatar.
 
14
Interview 73, commercial service officer, U.S. Embassy in Doha, Qatar, remote conversation from Jerusalem, September 21, 2016.
 
15
These four tribes include the Bani Yas, Al Manager, Al Dhawahir and Al Awamir (Documentation and Research Bureau of The Emirate Court 1969, 19).
 
16
The author chose to use the English transliterations per common usage for the individuals mentioned, thus the Al Muhairi—or al-muhayrī—family name appears in slightly different English versions. Similarly, there are some slight variations in English transliterations of Al Khoury.
 
17
ADNOC was created in 1972 by the government of Abu Dhabi to participate in oil concession ventures (Commercial Department of the British Embassy 1975, 37).
 
18
The Al Shanfari clan is part of the principal Dhofar tribe, the Bait Kathir, that played a central role in the ruling Bu Sa ‘id dynasty’s conquest of Dhofar at the end of the nineteenth century (Pridham 1987, 57).
 
19
The Lawati (plural) are one of a handful of Shi‘a groups in northern Oman (Peterson 2004, 43).
 
20
Interview 44, analyst at International Trade Department, World Bank, Washington, DC, June 20, 2016.
 
21
Interview 31, manager at Gold and Diamond Park, Dubai, UAE, May 15, 2016.
 
22
The figure created by the author reflects majority shareholders and subsidiary entities in order to paint a broad picture of free zone ownership and government linkages. It does not, for example, convey potential minority shareholders.
 
23
The majority shareholders in SPS are the Ministry of Finance in Oman (20%) and APM Terminals B.V. (30%), a private Dutch company.
 
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Metadata
Title
Elite Embeddedness in Free Zone Development
Author
Robert Mogielnicki
Copyright Year
2021
Book
A Political Economy of Free Zones in Gulf Arab States

Print ISBN: 978-3-030-71273-0

Electronic ISBN: 978-3-030-71274-7

Copyright Year: 2021

DOI
https://doi.org/10.1007/978-3-030-71274-7_5