Special economic zone

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Special Economic Zone
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"SEZ" redirects here. For the airport, see Seychelles International Airport.
Not to be confused with Exclusive economic zone.

A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increased investment, job creation and effective administration. To encourage businesses to set up in the zone, financial policies are introduced. These policies typically encompass investing,

labour regulations. Additionally, companies may be offered tax holidays
, where upon establishing themselves in a zone, they are granted a period of lower taxation.

The creation of special economic zones by the host country may be motivated by the desire to attract

labor camps, with workers denied fundamental labor rights.[4]

Definition

The definition of an SEZ is determined individually by each country. According to the World Bank in 2008, the modern-day special economic zone typically includes a "geographically limited area, usually physically secured (fenced-in); single management or administration; eligibility for benefits based upon physical location within the zone; separate customs area (duty-free benefits) and streamlined procedures."[5]

History

Modern SEZs appeared from the late-1950s in industrial countries. The first was in Shannon Airport in County Clare, Ireland.[6] Some tax-free jurisdictions such as the Cayman Islands offer technology companies a way to keep their IP offshore in a Special Economic Zone (see Cayman Enterprise City).

From the 1970s onward, zones providing labour-intensive manufacturing have been established, starting in

reform and opening-up plan while legitimizing the leadership of the CPC over the Chinese state and people."[7]
: 51 

Numerous

African countries have set up SEZs in connection with China,[2] including over the period 1990 to 2018 establishing SEZs in Nigeria (two), Zambia, Djibouti, Kenya, Mauritius, Mauritania, Egypt, and Algeria.[8] Generally, the Chinese government takes a hands-off approach, leaving it to Chinese enterprises to work to establish such zones (although it does provide support in the form of grants, loans, and subsidies, including support via the China Africa Development Fund).[8] The Forum on China-Africa Cooperation promotes these SEZs heavily.[8]

Types

The term special economic zone[9][10] can include:[1][11]

World Bank special economic zone types[5]
Type Objective Size Typical Location Typical Activities Markets
FTZ Support trade <50 hectares (120 acres) Port of entry Entrepôts and trade related Domestic, re-export
EPZ (traditional) Export manufacturing <100 hectares (250 acres) None Manufacturing, processing Mostly export
EPZ (single Unit/free enterprise) Export manufacturing No minimum Countrywide Manufacturing, processing Mostly export
EPZ (hybrid) Export manufacturing <100 hectares (250 acres) None Manufacturing, processing Export, domestic
Free port/SEZ Integrated development >1,000 hectares (2,500 acres) None Multi-use Internal, domestic, export
Urban enterprise zone Urban revitalization <50 hectares (120 acres) Urban/rural Multi-use Domestic

Challenges

SEZs do not differ from other facilities in industrializing economies. As with any technique administered used by a globalized economy there are oversights by actors that are not domestic. Transnational criminal organizations and terrorist groups have taken advantage of Special Economic Zones and their lack of regulations.[12]

See also

References

  1. ^ a b c d "Special Economic Zones Progress, Emerging Challenges, and Future Directions" (PDF). Washington DC: The International Bank for Reconstruction and Development/The World Bank. 2011. Retrieved 25 May 2014.
  2. ^ a b Woolfrey, Sean (2013). "Special economic zones and regional integration in Africa" (PDF). Trade Law Center. Retrieved 25 May 2014.
  3. Business Today
    . 29 March 2014.
  4. ^ Watson, Peggy (23 July 2012). "Sackings expose the harsh reality of Poland's junk jobs". The Guardian.
  5. ^ a b "Zone Definition", Special Economic Zone: Performance, Lessons Learned, and Implication for Zone Development, Washington DC: World Bank, 2008, pp. 9–11
  6. ^ "Political priority, economic gamble". The Economist. 4 April 2015
  7. ^
    JSTOR jj.2915805
    .
  8. ^
    OCLC 1249712936
    .
  9. ^ УПРАВЛЕНИЕ ОСОБЫМИ ЭКОНОМИЧЕСКИМИ ЗОНАМИ СУБЪЕКТА РФ Масаев С.Н. В сборнике: XIII Всероссийское совещание по проблемам управления ВСПУ-2019 Труды. Под общей редакцией Д.А. Новикова. 2019. С. 1773–1778.
  10. ^ Masaev S. Destruction of the Resident Enterprise in the Special Economic Zone with Sanctions. Publisher: IEEE. 2019
  11. ^ Economic Zones in the ASEAN (PDF), United Nations Industrial Development Organization, 2015, p. 26, archived from the original (PDF) on 30 September 2020, retrieved 16 September 2016
  12. ^ Latin American Special Economic Zones and Their Impacts on Regional Security (Report).

Further reading

  • Chee Kian Leong, (2007) A Tale of Two Countries: Openness and Growth in China and India, Dynamics, Economic Growth, and International Trade, DEGIT Conference Paper pdf
  • Chee Kian Leong, (forthcoming) Special economic zones and growth in China and India: an empirical investigation, International Economics and Economic Policy. link
  • Thomas Farole, (2011) Special Economic Zones in Africa: Comparing Performance and Learning from Global Experiences, Washington, DC, World Bank
  • Jarosław M. Nazarczuk, Stanisław Umiński, (2019) Foreign Trade in Special Economic Zones in Poland, UWM w Olsztynie, Olsztyn link pdf
  • Xiao, F., Zhou, Y., & Huang, Y. (2023). Old Wine in a New Bottle: Understanding the Expansion of the Shenzhen Special Economic Zone in China. Journal of Urban Planning and Development, 149(4), 02523001.

External links

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