The Jebel Ali Economic Zone (JAFZA) is a well-established industrial and commercial zone based on an area of 48 sq km around the largest man-made harbor in the world southwest of Dubai.
The King Abdullah Economic City (KAEC) is the largest of five mega Saudi projects announced in 2005 and still under construction near the city of Rabigh, 120 km northwest of Jeddah.
The current capacity of JAFZA harbor is 14 million TEU, or Twenty-Foot Equivalent Unit or container counts, expandable to 19 million by 2020.
But the KAEC master plan claims that its seaport capacity will be 20 million TEU when completed.
To the casual observer, it appears that JAFZA and KAEC accomplish the same goals, but Dubai’s concept of JAFZA gives the emirate a significant economic boost with no boundaries to isolate it.
KAEC, on the other hand, is conceived as the exact opposite: isolated to the point that its economic impact on Rabigh and Jeddah appears minimal at present, although its true impact has yet to be determined until construction is completed.
A glance over the master plans of JAFZA and KAEC shows the designers of JAFZA meant to allow the “economic spillover effect” of their zone to flourish all over the entire UAE area not only to the zone area or to the 4,114 sq km of Dubai.
In contrast, the designers of KAEC meant to create a different concept of modernization within a fenced area isolated from the deteriorating neighborhoods and nearby Jeddah, the commercial capital and the second largest city in the country.
One may see what I mean by realizing that KAEC designers located all what they can of the zone within its fenced area.
That includes Seaport (14 sq km), Educational District (5 sq km), Industrial Park (62.5 sq km), Residential Zones (48 sq km), Central Business District (13.5 sq km) and Resorts (27 sq km).
JAFZA designers locate only those activities directly related to the mission and goals of the zone within the 48 km area.
Those include offices, standard warehouses, land, build-to-suit warehouses, business center, showrooms, limited onsite residential, hotels, convention center and retail.
One may claim that what might be called “JAFZA Effect” is so obvious over all aspects of economic and social life of Dubai and the UAE.
One may see it in the skyscrapers, the fancy commercial and housing complexes, the international exhibitions, reliable and effective business logistics systems, recreation facilities and the wider spectrum of choices people living in Dubai enjoy compared to the rest of neighboring countries.
From a pure economic perspective, one may claim that Dubai prosperity is a gift from JAFZA.
The direct and indirect contribution of the zone to the economy of Dubai is beyond imagination.
The zone attracted more than 6,400 companies including 120 of the Fortune Global 500 enterprises from 120 countries worldwide.
The direct contribution of JAFZA to the GDP of Dubai is 25 percent, which exceeds four times the 6 percent meager contribution of the oil sector of the oil-poor emirate.
JAFZA is also the creator of more than 50 percent of Dubai exports and the host of more than 20 percent of the total inflows of DFI to UAE’s.
JAFZA is also responsible for 25 percent of the total cargo handling capacity and 12 percent of air cargo on the national level. Also on the national level, JAFZA created over 160,000 jobs and inspired other emirates to create their own free zones.
The UAE now is the homeland of a chain of free zones, which host over 30,000 companies.
KAEC is now owned by a public company listed in the Saudi Stock Market and that gives the owners a great opportunity to convert the city into a (Free Economic Zone) and redesign the distribution of its components in a manner that creates an economic and social spillover effect that would ignite growth in the Makkah region and eventually the whole country of Saudi Arabia.
