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RIYADH: Oman’s free zones are set to attract greater foreign investment after signing up to a global network designed to boost the economic areas.

The Public Authority for Special Economic Zones and Free Zones said its membership in the World Free Zones Organization will help improve the competitiveness of the territories it oversees, including industrial cities and free zones, while opening new channels to promote them as flexible and investor-ready destinations with advanced infrastructure.

Free zones are designated areas that offer businesses incentives such as tax exemptions, full foreign ownership, and simplified customs procedures. These districts are designed to attract investment, boost exports, and support economic diversification by providing a competitive and flexible environment for companies to operate.

They are increasingly central to economies in the Middle East, with hubs like Dubai’s Jebel Ali, Riyadh’s Special Integrated Logistics Zone, and Egypt’s Suez Canal Economic Zone driving trade and investment.

“Through this international partnership, the authority seeks to expand its network of economic relations and benefit from the latest global trends in the management and development of special economic zones, free zones, and industrial cities,” Oman News Agency reported.

This comes as Oman’s special economic zones attracted $43.16 billion in investments during the first half of 2023, driven by major projects in Sohar, Salalah, and Duqm, supported by a favorable investment climate fostered by OPAZ and the government’s diversification strategy.

By joining the organization, which brings together more than 1,600 zones and economic institutions from over 140 countries, the authority will be able to exchange expertise and strengthen its operational capabilities to keep Oman’s zones competitive globally.

The membership will also support efforts to improve operational efficiency and develop more targeted promotion and marketing strategies to attract high-value projects, ONA said.

The body currently oversees 23 operating special economic zones, free zones, and industrial cities across Oman. These districts attracted cumulative investments totaling approximately 21 billion Omani rials ($54.5 billion) by the end of 2024, reflecting their growing appeal to investors.

The World Free Zones Organization is a network that includes free zones, multinational corporations, and industry stakeholders committed to fostering global trade and investment.

Across the wider Middle East and North Africa region, free zones have become critical enablers of economic diversification and foreign direct investment.

The UAE is home to some of the most prominent examples, including Jebel Ali Free Zone, which hosts more than 9,000 companies, and Abu Dhabi’s Khalifa Industrial Zone, which supports large-scale manufacturing and logistics operations.

In ������Ƶ, the King Abdullah Economic City and the Special Integrated Logistics Zone in Riyadh have emerged as strategic hubs supporting Vision 2030 objectives, while Egypt’s Suez Canal Economic Zone has attracted global interest as a key gateway for trade and industry.

RIYADH: Middle Eastern air cargo capacity grew 1.5 percent year on year in June, even as regional demand contracted by 3.2 percent due to geopolitical tensions and airspace disruptions. 

The rise in available cargo space, measured in available cargo tonne-kilometers, came amid route disruptions over parts of Iran, Iraq, Israel, and Lebanon. These factors drove the region’s second consecutive monthly contraction in cargo volumes, according to the International Air Transport Association’s latest air cargo market report.

The performance reflects a broader slowdown in global air cargo, with IATA’s mid-year forecast projecting 0.7 percent volume growth, down from 11.3 percent in 2024. 

The slowdown is attributed to rising protectionism, including new US tariffs and the rollback of de minimis exemptions on low-value imports, which could dampen e-commerce-related air freight. 

“The June air cargo data made it very clear that stability and predictability are essential supports for trade,” said Willie Walsh, IATA’s director general. 

“Emerging clarity on US tariffs allows businesses greater confidence in planning. But we cannot overlook the fact that the ‘deals’ being struck are resulting in significantly higher tariffs on goods imported into the US than we had just a few months ago,” he added. 

While the full economic impact of these trade cost barriers remains to be seen, Walsh said governments must step up efforts to make trade simpler, faster, cheaper, and more secure through digitalization. 

The Asia-North America and Africa-Asia trade lanes each contracted by 4.8 percent, while Middle East-Europe declined by 4.5 percent. In contrast, trade between Europe and Asia expanded by 10.6 percent, maintaining 28 consecutive months of growth. 

“Overall, air cargo demand grew by a modest 0.8 percent year-on-year in June, but there are very differing stories behind that number for the industry’s major players,” Walsh said. 

Trade tensions dragged North American traffic down 8.3 percent and left European growth at 0.8 percent, but Asia-Pacific defied the trend with a 9 percent expansion. 

“Meanwhile, disruptions from military conflict in the Middle East saw the region’s cargo traffic fall by 3.2 percent,” added Walsh. 

Despite the challenging backdrop, some fundamentals remain supportive. Global industrial production rose 3.2 percent year on year in May, and goods trade increased by 3.5 percent. 

Jet fuel prices in June were 12 percent lower than a year ago, easing cost pressures for carriers. 

While the global Purchasing Managers’ Index recovered to 51.2, signaling expansion, new export orders remained in contraction at 49.3. 

Adding to the complexity of the regional dynamic, Middle East airlines are simultaneously expected to post the world’s highest net profit margin in 2025 at 8.7 percent, according to IATA’s June industry forecast presented at its 81st annual general meeting in New Delhi. 

The region is projected to generate a net profit of $6.2 billion, up from $6.1 billion in 2024, and is expected to earn $27.20 per passenger, outpacing all global peers despite demand volatility and regional instability.