The political economy of special economic zones volume 11 issue 1 lotta moberg. The lineage of the country runs back to protosezs, created when old world governments sold entrepreneurs charters to build forprofit colonies in the new world, such as jamestown and new amsterdam. From free zones to special economic zones the uae case study. African countries have sought to replicate the success of east asia by implementing special economic zones sezs. Special economic zone sez is an administratively separated part of polish territory where investors may run their business activity based on specific preferential conditions. The political economy of special economic zones journal. Special economic zones sezs can be regarded as an investment in industrial infrastructure and a services provider to attract and facilitate foreign investment, integrate local firms into global value chains, promote exportoriented growth and generate employment. Study on special economic zones sezs in the western balkans. Special economic zones sezs have a long and complicated relationship with the united states.
Special economic zones sezs or industrial parks can be an effective instrument to promote industrialization if implemented properly in the right context, as shown in some of the emerging countries, particularly those in east asia. A special economic zone sez is a specified, delineated and duty free geographical region that has different economic laws from those of the country in which it is situated. In these geographically delimited areas, governments facilitate industrial activity through fiscal and regulatory incentives and infrastructure support. Chinas economic growth is inextricably linked to the use of special economic zones sezs. Jul 23, 2019 these areas are designed to encourage overseas investment in china and boost the countrys economic growth. Lessons from the global experience pedl synthesis paper series no. Designing economic zones for effective investment promotion working group 1. The concept of sez is described by different countries of the world is no less than 19 different terms, such as free trade. Special economic zones are intended to function as zones of rapid economic growth by using tax and business. Special economic zone sezs scheme in india was conceived by the commerce and industries minister murasoli maran during a visit to special economic zones in china in 1999. Sezs are generally defined as geographi cally delimited areas administered by a single body, offering certain incentives generally duty free importing and streamlined customs procedures, for instance to businesses which physically locate. A special economic zone sez is a specified, delineated and dutyfree geographical region that has different economic laws from those of the country in which it is situated. Special economic zone sez is a specifically delineated dutyfree enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs.
Given longer term funding constraints, the sez act and the sez draft strategy encourages the private sector to play an active role in the south african special economic zones programme. Sustainable and special economic zone selection under fuzzy. Welcome to special economic zone sez india was one of the first in asia to recognize the effectiveness of the export processing zone epz model in promoting exports, with asias first epz set up in kandla in 1965. For example, the term free zone a form of sez focused on customs relief is used in some countries for concepts that fall outside the definition of sezs. This chapter argues that this is largely due to flaws in the political economy of sez schemes, which prevent replication of. Cpec will not only benefit china and pakistan but will have positive impact on iran, afghanistan, india, central asian republic, and the region. In order words, sez is a geographical region that has economic laws different from a countrys typical economic laws. Special economic zones sezs or industrial parks can be an effective. From free zones to special economic zones the uae case study presented by. Chinas special economic zones and industrial clusters.
In some countries, such a region is even treated as a deemed foreign. Chinas special economic zones sez were first developed in 1980 as part of deng xiaopings drive to open up china to the rest of the world and cement chinas place on the global stage as a major economic player. Moreover, another similar policy is the customs regime called recinto fiscalizado estrategico strategic fiscal facility enacted by the end of 2006, which has not proven to be very succesful. A special economic zone or sez is a specially marked territory or enclave within the national borders of a country that has more liberal economic laws than the rest of the country. With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances. Special economic zone sez is a specifically delineated duty free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs. Chinapakistan economic corridor is a framework of regional connectivity.
As a national development strategy, special economic zones sezs have become a global phenomenon. Special economic zones as a tool for economic development. Free trade zones, export processing zones, special economic zones, specialized zones economic zones. Using special economic zones to drive job creation in mena by kurt dassel and kim eckermann the purpose of this paper is to provide practical, useful guidance to individuals and entities involved in the design, development and implementation of special economic zones sezs. Usually the goal is to increase foreign investments. Special economic zone welcome to the jamaica special. Special economic zone chinese economics britannica. Special economic zone sez, any of several localities in which foreign and domestic trade and investment are conducted without the authorization of the chinese central government in beijing. These include 21 agroindustrial economic zones, 216 it parks and centres, 64 manufacturing economic zones, 19 tourism economic zones, and two medical tourism zones as of may 2015. Special economic zones act, 2005 it is defined as an act to provide for the establishment, development and management of the special economic zones for the promotion of exports and for matters connected therewith or incidental thereto. A special economic zone sez is defined as a geographically designated areas of a country set aside for specifically targeted economic activities, which are then supported through special arrangements which may include laws and support systems to promote industrial development. A special economic zone sez is an area in which the business and trade laws are different from the rest of the country. Free economic zone colon free zone, panama domestic, reexport entrepot and traderelated activities free trade zone support trade size zones.
India has specific laws for its sezs the category sez covers a broad range of more specific zone types, including freetrade zones ftz, export processing zones epz, free zones fz, industrial estates ie, free ports, urban enterprise zones and. The impacts of special economic zones evans school of. The jseza was established in 2016 under the special economic zones act. Despite decades of international experience, there is still no blueprint for successful sez policies, and the majority of sezs fall well below expectations. Ftzs dutyfree fenced in designated areas providing storage, and. The transformation of shenzhen, a small fishing vil. Free port economic zone is typical in promoting activities. Special economic zones in panama harvard university. Edited by thomas farole gokhan akinci international trade department investment climate department. The political economy of special economic zones journal of. Others include free trade areas, industry parks, technical innovation parks and bonded zones that facilitate experimentation and innovation over a wide range of industries. The sez act envisages public private partnerships in the development and operation of special economic zones. This paper is a first attempt to apply a robust political economy framework to explain when special economic zones sezs can contribute to economic development. A special economic zone sez is a geographical region that has economic laws that are more liberal than a countrys domestic economic laws.
Know more about sezs in india through this article. The establishment of special economic zones sezs is a lengthy. Historical development of free zones in honduras 48 performance 49 key success factors 54 challenges for the future 61 conclusion 65 notes 67 references 68. From an estimated 500 in 1995, sezs have now grown to around 4,300 in over countries and employ more than 68 million workers adb, 2015. This is a very important topic that features in the indian economy section of the upsc syllabus. These preferential rules are presented in the graph below. The aim of this paper is to evaluate the economic performance of the most important sezs in panama. Pdf study on special economic zones sezs in the western. Six types of special economic zone free trade zone, export processing zone, enterprise zone, single factory, free ports, and specialized. Free ports free port or port zone or port or airport special economic zone is one of the most expansive types of sez. Special economic zones open knowledge repository world. Policy on development of special economic zones in south. Free economic zone colon free zone, panama domestic, reexport entrepot and traderelated activities free trade zone support trade size free zone lat krabang industrial estate, thailand export and domestic market manufacturing, other processing size economic zone authority peza alone owns three ecozones and administers the incentives for over privately300 managed zones. Chapter 4 chinas investment in special economic zones in africa 69.
Special economic zones also referred to as free zones represent designated. Sezs are located within a countrys national borders, and their aims include increased trade balance, employment, increased investment, job creation and effective administration. Are sezs still relevant and effective as a development strategy in this crowded and connected global marketplace. Colon free zone, panamapacific and city of knowledge. Some are designated geographical spaces where special policies and measures support specific economic functions. Progress, emerging challenges, and future directions.
Experience gained in the development of chinas special economic zones, china development bank continued from page 1 existing sezs in china in 2014, there were 6 sezs, 14 open coastal cities, 4 pilot free trade areas and five financial reform pilot areas. A special economic zone sez refers to designated areas in countries with special economic regulations that differ from other areas in the same country. World investment report chapter 4 special economic zones. Sezs play varied roles in facilitating national, regional and local economic development. Sezs are generally defined as geographi cally delimited areas administered by a single body, offering certain incentives generally dutyfree importing and streamlined customs procedures, for instance to businesses which physically locate. Although the performance of many zones remains below expectations, failing either to.
There are some 5,400 zones across 147 economies today, up from about 4,000 five years ago, and. Colon free zone cfz was created in 1948 as an importreexport zone and today is the second largest sez in the world. Special economic zones sezs geographically delimited areas within which governments facilitate industrial activity through fiscal and regulatory incentives and infrastructure support are widely used across most developing and many developed economies. Sezs are spreading rapidly around the world special economic zones sezs are widely used in most developing and many developed economies. Overview of special economic zones special economic zones sezs are generally defined as geographically delimited areas administered by a single body, offering certain incentives dutyfree importing and streamlined customs procedures, for instance to businesses that physically locate within the zone.
The basic concept of a special economic zone includes several specific characteristics. The category sez covers a broad range of more specific zone types, including free trade zones ftz, export processing zones epz, free zones fz, industrial. Profile of the dominican republics free zones in 2010. A robust political economy is one that channels the actions of selfinterested individuals with limited information to promote economic progress. From free zones to special economic zones the uae case.
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