Free Trade Zone and Port Hinterland Development

Free Trade Zone and Port Hinterland Development

Date: 
Friday, January 13, 2006
Type: 
Books
ISBN: 
92-1-120434-8
Abstract

The roots of Free trade zones (FTZs) can be traced back to more than 2,000 years ago, today there are over 850 zones and the number continues to increase. Their main role can be summarized as: to attract foreign direct investment (FDI) to pay for the construction cost and salaries of its citizens to build and service business.

With the advent of globalisation and the movement of goods and services to the place of least cost, countries need to find ways of attracting new businesses whilst retaining existing clients.

Logistics centres are a means to achieving this. This report looks at examples of FTZ from around the world and sees how the concept of logistics centres can be applied in practice. A through overview of the port industry is given as well as recent trends in logistics.

The report concludes that the traditional import/export port needs to move into one of two markets, or a combination of both; these markets are transhipment or logistics centres. The report identifies that an optimum enabling environment needs to be created that is service orientated, largely free of bureaucracy and has excellent connectivity both physically and electronically between all stakeholders. Where the optimum enabling environment cannot be implemented nationwide, the creation of a FTZ is a first step to attracting funds necessary to finance this change.

The report concludes with a summary of the key guidelines for policy makers to consider in the transition from an traditional import/export port to a logistics centre port.

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