The Free Zones of Curaçao are effective instruments of economic growth
Curaçao could through its Free Zones profit and ignite economic activities that will contribute to our economic wellbeing plus employment but Curaçao needs to take some concrete action. Renowned experts on Free Zones in the region and the world gave their insight about how Free Zones are enabling development in the world but closer to home too.
Curaçao could also profit from this boom but should have determined to use its Free Zone as a strategic choice or generation of economic progress, choose niches development in which we know will excel, and last but not least, take the actions needed such as adapting the Free Zone law to allow for next to goods, services can be provided through the Free Zones of Curaçao.
The seminar was preceded by workshops concentrating on customs, employability and aligned promotion. These workshops are also part of the process of drafting a strategic plan for the Curaçao Free Zones geared towards the future.
The challenge we face and opportunities knocking on our door
CEO of Araújo- Ibarra International Trade Consultants, Dr. Martin Ibarra, shared with the audience the eight areas of opportunities that they have identified for Curaçao. Prior to deep diving into each one of these opportunities individually, Ibarra zeroed-in on the reasons why Curaçao should grasp the momentum and go for the objective of economic reactivation and growth while inserting our country in global value chains. The areas identified with opportunities for Curaçao and its Free Zones are: Insertion in value chains through the Oil Business and refining of oil; E- Commerce: A breakthrough opportunity for dynamizing Curaçao’s exports; Business Process Outsourcing (BPO); Data Centers; Clustering of the cinematographic Industry inside Curaçao Free Zones; Unlocking Curaçao’s potential in the ships, yachts and sailboats repair industry, Health Industry and Medical tourism.
Key in Curaçao leveraging the opportunities, is ensuring that our laws are consistent with the international standards set by the World Trade Organization (WTO). A new Free Zone law in Curaçao, which must still be reformed to adapt the regulation of Free Zones to the WTO’s standards, will allow the island to attract some of the 4 million new jobs and the US$ 78,000 of new investments from NEARSHORING to Latin America. Juan David Barbosa, Partner in Araújo- Ibarra International Trade Consultants, elaborated on the work that needs to be done by Curaçao to have such a proposition as part of the work done by Araújo- Ibarra in developing a strategic plan for CURINDE. The Curaçao laws must be adapted to be World Customs Organization friendly and coherent but competitive to the European Union. Therefore, the aim is to draft the best Free Zone and Customs procedures as part of the development of the strategic plan for the Curaçao Free Zones.
Developments in Latin America and in the Caribbean
Maria Camila Moreno, Director of the Free Trade Zones Association of the Americas (AZFA), illustrated that there are 630 Free Zones in Latin America that are member of AZFA, harboring more than 13,000 companies, which provide almost 1 million direct jobs and around US$ 38,807 million in export. She illustrated the contribution from Free Zones to GDP ranging from 4.8% to GDP in Uruguay to a contribution of no less than 7.9% to the GDP in Costa Rica. Very noticeable was the comparison of how much every dollar forsaken in tax due to a Free Zone tax exemption a country generates in other taxes, with the Dominican Republic being at the top of the list with a ratio of 1: 10. She further gave a display of services provided through Free Zones in the region.
The Dominican Republic is a great example of how Free Zones are excellent instruments for economic development of a Caribbean Island. Jose Manuel Torres, the Vice President of Dominican Association of Free Zones (ADOZONA), shared the interesting insight about how Free Zones are contributing dearly to the development of the Dominican Republic. Torres illustrated how the Free Zones in the Dominican Republic changed from being producers of cocoa, sugar and coffee products to a diversified producer of products and provider of services, contributing with US$ 7.8 million in export which represents 60% of the country’s export. Most of the activities concentrate around cigar manufacturing, services, textile and apparel but interestingly also pharmaceuticals and medical devices. Torres proved how the Dominican Republic is leveraging the opportunities that are presenting themselves thanks to trends in the world.