Fri | Dec 1, 2023

Free zones days numbered

Published:Thursday | January 16, 2014 | 12:00 AM

Christopher Serju, Gleaner Writer

Jamaica will have to clear a few legislative hurdles before the proposed logistics hub can become a reality.

High on the agenda will be the phasing out of free zones, which will be replaced by special economic zones, according to Dr Eric Deans, chairman of the Logistics Task Force within the Ministry of Industry, Investment and Commerce.

He explained that free zones must be phased out by 2015, in keeping with a dictate from the World Trade Organisation.

Sixteen special economic zones have already been identified and work far advanced on getting the new regulations passed.

"The essential difference is you take steps to remove anything that can be considered an export subsidy. You have special tax incentives that will apply and it would have to be legislated," Deans said.

He added: "A concept paper has been prepared on the special economic zones and once those consultations have been completed, there will be a New Special Economic Zone Act that will cover the operations of these zones," Deans told The Gleaner on Tuesday.

residential, recreational

In the meantime, whereas a free zone is usually one small defined geographical area, such as the 40-acre Kingston Free Zone, focusing on one industrial activity for export, the 17,000-acre Caymanas economic zone in St Catherine will incorporate residential, commercial and recreational facilities - all of which will fall within the special economic zone. And it will allow companies to also provide services to the domestic economy.

These are some of the questions that will be addressed over two days when the Jamaica logistics hub symposium gets under way at the Jamaica Conference Centre, downtown Kingston, next Tuesday.

Deans is urging Jamaican companies and other potential investors to use the opportunity to get themselves up to speed on how they can benefit from the logistic-hub initiative.

"A lot of attention has been put on the larger multinational corporations, but if you look at the economic zones globally, 70-80 per cent of the companies come from the MSME (micro, small and medium-sized enterprises) sector. The MSMEs, therefore, play a very important role in both the development of the zones and also they have the economic benefits and linkages feeding back into the economy."