Drivers and Barriers for Successful Special Economic Zones (SEZs): Case of SEZs under China Pakistan Economic Corridor

Abstract

Over the last three decades, special economic zones (SEZs) have given new impetus to the ever-growing export-oriented industrialization in developing countries. Where various economies have benefited from SEZs, many zones have ended up becoming enclaves with trifling advantage. The SEZs in Pakistan have experienced the same fate and have failed to contribute to exports, employment, and creating linkages with the domestic economy. Recently under the China Pakistan Economic Corridor (CPEC), SEZs are proposed to be set up in Pakistan, with a hope to fuel the stuttering economy. However, it is pertinent first to understand the local context and device policies considering stakeholders’ perspectives. This study aims to identify the factors for the successful implementation of SEZs derived from the regional context of Pakistan. In-depth interviews are conducted from the most relevant stakeholders, who have been involved in the development of SEZs. The results pointed towards the removal of political influence over zones and government taking the lead role in deciding the types of industry to be invited in these zones. Each zone should have a clear vision of development based on its locational advantage. The zone promotions should be based on competitiveness rather than fiscal incentives. Joint ventures and PPP should be encouraged inside the zones for sustainable operations.

Overcoming barriers in automotive SMEs to attain international competitiveness: an ISM approach modelling

“…Removing trade barriers and setting up Special Economic Zone has tremendously helped several sectors including the automotive sector (Naeem et al, 2020).…”

“…In India, the automotive sector received a massive boost post-economic reforms of 1991 which enabled the participation of foreign players and equity in the country. Removing trade barriers and setting up Special Economic Zone has tremendously helped several sectors including the automotive sector (Naeem et al , 2020).…”

Duty Free: Turning the Criminological Spotlight on Special Economic Zones

“…In the latter half of the twentieth century SEZs were increasingly used as a policy tool in the economic growth models of countries in the global South, particularly those adopting exportorientated industrialisation strategies (Naeem et al, 2020). The EPZs or 'modular zones' introduced are often associated with precarious forms of work tied to the processing and manufacturing of commodities in the global economy (Bach, 2011).…”

“…Since the deregulation of the global economy in the 1970s, special economic zones (SEZs) have proliferated (see Bost, 2019). There are now estimated to be between 4,000 and 6,000 SEZs globally, a number that includes freeports, free trade zones and export processing zones (EPZs) (Naeem et al, 2020;Neveling, 2020;Slobodian, 2020). SEZs can be defined as spatial jurisdictions that function as enclaves designated to help accelerate national economic growth.…”

Special Economic Zones for Growth and Competitiveness in Pakistan’s Economy: Learning from Global Experiences

“…11 Similarly, Nasem, Waheem and Khan while studying the factors for successful implementation of SEZs conclude that in order to succeed with the planned SEZs under CPEC, it is important to remove political influence and the government must ensure the development of each zone according to its locational advantage. 12 While the above studies have discussed the potentials and challenges of SEZs for Pakistan, they missed to link it with the overall economic state of the country before recommending it as a successful growth model. Moreover, few others which have studied the global experiences have done so in a more general way.…”