Free Trade Zones in UAE and Economic Development Research Paper - 1

Free Trade Zones in UAE and Economic Development - Research Paper Example In a free trade zone, all the imports are free from duties and all the exports from this region are free from restrictions but only when those goods reach to other destinations, they become subject to the local custom rules. Ireland was the first country to come up with this idea and the main purpose was to industrialize the rural areas of the country and attract foreign investment to induce the economy and provide better employment to the locals (Davidson, 2008). United States, China, Brazil, Indonesia, India, Malaysia, Philippines and many other countries have various free trade zones, all for the same purpose (Krane, 2009). United Arab Emirates is the recent addition to the list of the countries, which are looking for aggressive economic growth and one of the approaches taken for the same is setting up various free trade zones in order to encourage foreign direct investment (Oxford Business Group, 2010). The country has over 20 free trade zones and the paper is an attempt to shed some light on the free trade zones of Dubai Media City and Abu Dhabi Airport (Barrett, 2010). The paper will discuss their positive and negative contributions to the economy of UAE, benefits to investors and strategies for growth. Furthermore, the paper will also shed some light on the differences between employment rules in the free trade zones and other areas of the country. Discussion Dubai Media City It was in the year 2001 when the Dubai government launched Dubai Media City as a free trade zone that has now become the regional hub of media companies in the Middle Eastern regions. Reputable media companies such as CNN, BBC, GEO Tv, ARY Digital, Bloomberg, Cartoon Network, CCTV Orbit Showtime, CNBC and others have set up their regional headquarters and broadcasting centers in the city. Furthermore, Financial Times, The Sunday times, The Economist and other well known print media companies have their regional centers in the Dubai Media City. McGraw Hill, Forbes, ITP Publishing Gro up and other leading players in the publishing are also located in the city. On top of these, the city takes great pride in the fact that headquarters of the ICC (international Cricket Council, the supreme governing body of cricket worldwide) is located in Dubai Media City. Over 1400 companies are registered and operating in the Dubai Media city (Krane, 2009). Over the past decade of its existence, the Dubai Media City has been instrumental in boosting the economic growth of the country. Furthermore, not only it has helped to provide employment to the local people however as of today, Dubai Media City is the home to thousands of people skilled, trained, experienced and learned in media related jobs. Many foreign students come to Dubai for their media studies considering the exposure that they could get from Dubai Media City. Foreign Direct Investment has kept on increasing and the tourism and hospitality industry has received great deal of business (Kanna, 2011). The downside of all this economic growth is the fact that this economic growth cannot be termed as sustainable or long-term growth. Despite the fact that the GDP of the region and the country has increased greatly due to the presence of huge media companies, however, these companies have ended up with employing a significant majority of expatriates, non-locals and non-Emiratis (Oxford Business Group, 2010). These percentages range from 80 percent to 99 percent. The point