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

2021 | OriginalPaper | Chapter

2. Regulating Free Zones: A History of Ownership, Labor, and Fees

Author : Robert Mogielnicki

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

Publisher: Springer International Publishing

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Abstract

The central defining aspects of modern free zones in the Gulf reveal important characteristics of the region’s political economy. Barring minor variations, Gulf free zones offer clients eligibility for full foreign ownership, unfettered access to expatriate labor, and preferential treatment concerning customs, taxes, and other fees. The issues of foreign ownership, expatriate labor, and fees not only possess deep historical foundations in Gulf Arab states but also remain persistent—and, at times, contentious—features of the region’s political economy. These economic institutions are intertwined with free zone development, having shaped the development of these entities and themselves been influenced by the evolution of the region’s free zone system. The persistence of these economic institutions delineates free zones from their onshore counterparts. As institutional arrangements change, free zones must also adapt.

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previous chapter Mapping Free Zones in the Gulf: Trends and Dislocations
next chapter The Dubai Model and UAE Free Zones
Footnotes
1
There is some disagreement over the precise beginning of the commercial sale of cultured pearls, with various sources suggesting dates ranging from 1918 to 1928 (Nagai 2013, 784; Farn 1986, 108).
 
2
Britain’s precise role in the Gulf is a source of historical contention, with some authors arguing that other regional powers, like the Ottomans, played influential but underemphasized role in regional affairs. James Onley argues Britain’s guardianship role was “not imposed coercively,” while other authors view British influence strictly within a colonial framework (Anscombe 1997; Onley 2009).
 
3
Interview 22, British owner of consulting firm registered in Abu Dhabi’s Masdar Free Zone, Abu Dhabi. April 14, 2016.
 
4
Interview 24, senior corporate manager of Fujairah Free Zone, Fujairah, UAE, April 18, 2016.
 
5
Interview 57, staff member at Sharjah International Airport Free Zone, Sharjah, UAE, August 11, 2016.
 
6
Ibid.
 
7
Interview 28, economic officer at the Economic Development Board, Manama, Bahrain, April 27, 2016.
 
8
The total labor costs vary across sectors, but the overall figures used here also correspond closely to figures reported in the manufacturing sector. Currency values are based on 2006 price estimates (Bahrain Labour Market Regulatory Authority 2006).
 
9
Interview 9, consultant specializing in Saudization for major HR consultancy, Dubai, August 19, 2014.
 
10
Interview 3, HR consultant in oil and gas sector, Dubai, July 30, 2014.
 
11
Interview 19, Emirati manager at Jebel Ali Free Zone, Dubai, March 31, 2016.
 
12
National employment figures are estimates from empirical data collected during fieldwork ending on September 2016 and reported/suggested Emiratization rates for that period.
 
13
Interview 9, consultant specializing in Saudization for major HR consultancy, Dubai, August 19, 2014.
 
14
Interview 12, owner of consultancy specializing in Emiratization, Oxford, October 30, 2014.
 
15
Interview 7, regional director of a graduate business school, Dubai, August 14, 2014.
 
16
The British forced Shaykh Isa to abdicate in 1923; however, his abdication was not recognized by many Bahrainis (House of Khalifa 2018).
 
17
Interview 39, staff member at Salalah Free Zone, Salalah, Oman, June 9, 2016.
 
18
Interview 23, manager at Masdar Free Zone, Abu Dhabi, April 14, 2016; Interview 47, consultant at Khalifa Industrial Zone Abu Dhabi (KIZAD), Abu Dhabi, UAE, July 24, 2016.
 
19
Interview 68, business editor at Gulf Daily News, Manama, Bahrain, August 24, 2016.
 
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Metadata
Title
Regulating Free Zones: A History of Ownership, Labor, and Fees
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_2