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A special economic zone
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, taxation
, trading, quotas, customs
and 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 foreign direct investment
The benefits a company gains by being in a special economic zone may mean that it can produce and trade goods
at a lower price, aimed at being globally competitive.
In some countries, the zones have been criticized for being little more than labor camps
, with workers denied fundamental labor rights
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."
Free zones and entrepôts
have been used for centuries to guarantee free storage and exchange along trade routes.
From the 1970s onward, zones providing labour-intensive manufacturing have been established, starting in Latin America
and East Asia
. The first in China following the opening of China in 1979 by Deng Xiaoping
was the Shenzhen Special Economic Zone
, which encouraged foreign investment and simultaneously accelerated industrialization in this region. These zones attracted investment from multinational corporations.
The World Bank created the following table to clarify distinctions between types of special economic zones:
- ^ 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.
- ^ a b Woolfrey, Sean (2013). "Special economic zones and regional integration in Africa" (PDF). Trade Law Center. Retrieved 25 May 2014.
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- ^ Watson, Peggy (July 23, 2012). "Sackings expose the harsh reality of Poland's junk jobs". The Guardian.
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- ^ a b "Zone Definition", Special Economic Zone: Performance, Lessons Learned, and Implication for Zone Development, Washington DC: World Bank, 2008, pp. 9–11
- ^ "Political priority, economic gamble". The Economist. April 4, 2015
- ^ 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.
- ^ Masaev S. Destruction of the Resident Enterprise in the Special Economic Zone with Sanctions. Publisher: IEEE. 2019
- ^ Economic Zones in the ASEAN (PDF), United Nations Industrial Development Organization, 2015, p. 26
- 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
Last edited on 15 May 2021, at 19:39
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