Special economic zones as noted, the purpose of the law on special economic zones law on sez is to promote economic development in certain regions that are considered underdeveloped by increasing and attracting investments, productivity, competition, and jobs. A special economic zone sez refers to designated areas in countries with special economic regulations that differ from other areas in the same country. The routledge handbook of industry and development focuses on the role of economic zones in promoting growth in subsaharan africa. In some cases sez are fully exempted from national laws regarding corporate income taxes, labour laws and quotas and other restrictive laws. Special economic zone chinese economics britannica. The role and effectiveness of special economic zones in tanzania special economic zones sezs have been successfully used as an industrial policy tool in many countries. Whats so special about the special economic zones act. Special economic zones are intended to function as zones of rapid economic growth by using tax and business. Special economic zones sezs, are geographically designated areas of a country set aside for specifically targeted economic activities, supported through special arrangements that may include laws and systems that are often different from those that apply in the rest of the country. Impact of special economic zones on employment, poverty.
Tanzanias objective is to become a middle income, semiindustrialized nation by 2025. Special economic zone or sez refers to a totally commercial area specially established for the promotion foreign trade. Pdf the role and effectiveness of special economic zones. Located on the mainland, the government of china grants its special economic zones sezs more free market oriented economic policies and flexible governmental measures, compared to the planned economy elsewhere. 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. The role of special economic zones asian development bank. The role of special economic zones in improving effectiveness of. Generally, sez aims to enhance the prosperity of the country. Sezs are located within a countrys national borders, and their aims include increased trade balance, employment, increased investment, job creation and effective administration. However the success in promoting the trade differs. The special economic zones sezs 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.
May 2018 a special economic zone sez is an area in which the business and trade laws are different from the rest of the country. The role of sezs in promoting industrial development global africa. Development of industrial park on pakistan steel mills land at port qasim near karachi. First, an industrial estate is an area consisting of many factories and business in single locality but it is relatively small area than special economic zone with limited liberal economic policies. With operational success, the role of the special economic zones has expanded from trade to investment technology, research and development, service, and training. Although the performance of many zones remains below expectations, failing either to. Jamaica special economic zones authority facilitating. Efforts to create sezs in tanzania began in 2002, and were stepped up through the establishment of the export processing zone. The sez will be governed by the special economic zones authority authority whose roles shall be.
Special economic zones are intended to function as zones of rapid economic growth by using tax and business incentives to attract foreign investment and. Created after deng xiaopings economic reforms were implemented in china in 1979, special economic zones are areas where marketdriven capitalist policies are implemented to entice foreign businesses to invest in china. The role of sezs in promoting industrial development. Pdf a study on special economic zones sez in tamilnadu. The world is awash with freetrade zones and their offshoots. 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. Special economic zones are regarded as geographically delimited area which is physically secured ganne, 2009. Special economic zones sezs concept has evolved across the globe and several developing countries have adopted this policy for setup of industrial zones that focus on exports and helps in generating economic opportunity and able to attract foreign. The china model, as it has been dubbed, is being emulated by other developing countries. Special economic zone what is a sez indian economy. A special economic zone sez is an area in which the business and trade laws are different from the rest of the country.
The role of special economic zones in improving e ectiveness of greater mekong subregion economic corridors this study looks into the role of special economic zones in strengthening the competitiveness of economic corridors in the greater mekong subregion gms. Usually the goal is flourishment in foreign investment. What are the roles and impact of special economic zone in. The role of chinas overseas special economic zones in. Chinas special economic zones sez are areas in which foreign and domestic companies can trade and invest without the same control and regulations from beijing as other parts of china. Special economic zones are intended to facilitate fast economic growth. Special economic zones sezs chinapakistan economic. The role of special economic zones in nationwide progress. Thus, ieat is assigned by the government to develop its industrial estates in sezs, which can be summarized into 2 phases. Especially in the usa, the pioneer of sez has 257 areas of ftz and 545 areas of ftz subzone 4, 5.
The role and effectiveness of special economic zones in. In india, they are called special economic zones sezs. 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. 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. The role of the special economic zones must be further enhanced alongside our desire to put an end to the massive poverty that has long plagued our society. Special economic zones sezs have been successfully used as an industrial policy tool in many countries. The industrial estates are the fundamental facility for business operators in manufacturing and services, promoting the expansion on economic in special economic zones. The jamaica special economic zones authority jseza is the agency of the government of jamaica responsible for facilitating the development of and promotion investments in special economic zones sezs in jamaica. The role of special economic zones in manufacturing. Special economic zones as an engine of regional economic.
Pdf special economic zones sezs concept has evolved across the globe and several developing countries have adopted this policy for. In order words, sez is a geographical region that has economic laws different from a countrys typical economic laws. Abstract ask three people to describe a special economic zone sez and three very different images may emerge. South african special economic and industrial development zones the port of durban and the southern bloemfonteincape town route, the sez is a natural choice for investors seeking a costeffective location to service domestic and export markets. A special economic zone is an area in a country that is subject to unique economic regulations that differ from other regions of the same country. Free trade zones, export processing zones, special economic zones, specialized zones economic zones. Role of special economic zones in improving effectiveness of gms. More and more countries have begun to implement this instrument. The role and effectiveness of stateowned export processing zones epz and special economic zones sez in tanzania is examined in this paper. Asean guidelines for special economic zones sezs development. Russian federation, technologyoriented zones also play an important role. Sezs have played a significant role in economic enrichment of developing countries, by improving international business. A special economic zone sez is a geographical region that has laws and regulations that are more liberal or flexible than a countrys domestic economic and investment laws.
Special economic zones have their own management system. Free zones have become the center of activity in modern economy. In viet nam, sezs play a key role in the governments fdi attraction strategy. The first person may describe a fencedin industrial estate in a developing country, populated by footloose multinational corporations mncs enjoying tax breaks, with laborers in garment factories working in substandard conditions. Progress, emerging challenges, and future directions. The government of bangladesh is setting up 100 special economic zones sezs for creating 10 million jobs.
The role of special economic zones in manufacturing development. Can special economic zones promote inclusive growth. Eradicating poverty by accelerating economic growth and generating employment opportunities through industrialisation is a key policy priority for bangladesh. The jseza was established in 2016 under the special economic zones act. T his chapter examines the role of special economic zones across subsaharan africa in promoting employment growth, raising productivity and generating spill.
Given its geographic location, special economic zones offer a number of. The function of special economic zones in the modernization process of china. Special economic zones sezs geographically delimited areas within which. In india, the special economic zones sez have been in existence for decades but has attracted renewed attention only in recent years. We prepare and provide answer sheets, assignment solutions, project reports and thesis.
Industrialization is expected to be an important catalyst in increas. Sez essentially worked as a liberal economic environment that encourage modernization and development within china borders. Promoting and marketing sezs to potential developers. Sezs are zones intended to facilitate rapid economic growth by leveraging tax incentives to attract foreign dollars and technological advancement. A proposal for a study on the role of sezs in strengthening competitiveness of gms economic corridors was endorsed at the february 2016 gms senior officials meeting. Designing economic zones for effective investment promotion. What is special economic zones sez explain role of special economic zones sez in international business. One of the most well known sez is shenzhen special economic zone which established in 1980 2, 3. There are currently 295 industrial parks, 3 technology parks and 15 economic zones, which concentrate over 50% of total fdi.
The special economic zones act, 2005, was passed by parliament in may, 2005 which received presidential assent on the 23rd of june, 2005. Efforts to create sezs in tanzania began in 2002, and were stepped up through the establishment of the export processing zone authority epza. China is the best example of special economic zone. We just have to address the objective improvements being suggested in order to clearly rationalize the incentives for the business enterprises that operate in these areas. These areas are designed to encourage overseas investment in china and boost the countrys economic growth. This allows sezs to utilize economic management which is more attractive to foreign and domestic businesses. A proposal for a study on the role of sezs in strengthening competitiveness of gms economic corridors was endorsed at.
Pdf role of special economic zone sezs in creation of. Until now, the special economic zone has been located in more than 5 countries around the world. What is special economic zones sez explain role of. Reviewing applications and granting licenses to sez developers, operators and enterprises. A special economic zone sez is a geographical region that has economic laws more liberal than a countrys typical economic laws. 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. Special economic zone policies provided to companies located in the specified zones for trade have both propelled growth in china and made the country extremely competitive internationally. Rightmost photo shows meas sophal who works in a garment factory at the special economic zone in sihanoukville, cambodia photo by pring.
Chapter 4 chinas investment in special economic zones in africa 69. Hanoi viet nam newsasia news network although being late and facing many challenges, vietnam must dare to play and bet on the success of special economic zones read more at. More and more countries have begun to implement this. Since 1979, chinas special economic zones sez have been beckoning foreign investors to do business in china. Global experiences with special economic zones with a. The role and effectiveness of special economic zones. Special economic zone and their role and impact on the. 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. Theoretical framework the theoretical debate over t he concept and role of sezs in economic development, in addition to their gender, labor and environmental implications, can be grouped under two major types of analysis, as argued by farole. The draft sez rules were widely discussed and put on the website of the department of commerce offering suggestionscomments. The function of special economic zones in the modernization. There are several forms of sez depend on the establishing objectives.
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