Types of Special Zones
The first ever special economic zone was the Shannon Export Processing Zone in Ireland set up in the late 1950s. Others that followed were the Kaoshiung Export Processing Zone in Taiwan and the Santacruz Electronics Export Processing in India in the mid-1960s. Many early SEZ were export-oriented ventures that focused on some production or manufacturing activities with heavy involvement of foreign capital. The resulting output was intended exclusively for export markets. India’s first export zone (1965) predated that of China’s by some 12 years (1978). However, conflicting policies in India due to political, fiscal, and social issues raised against economic zones led to lackluster economic growth directly attributable to them. The site below talks more about fierce opposition in India due to forced acquisition of land for putting up these zones. Another significant issue is the resulting displacement (mostly of poor agricultural farmers) whose fertile farmlands were converted into special zones. A study suggests further that for every one job created inside a special economic zone, 4 livelihoods were being destroyed in the process. It seems it is a net job loss for everyone concerned. What is even worse is absence of social “safety nets” for these displaced people. In rare cases, re-training and rehabilitation were inadequate at best. Because of these serious concerns, all new proposals for any Indian SEZ have been temporarily put on hold until further notice by the government:
http://ipsnews.net/news.asp?idnews=36523
There are many types of special economic zones today and they are classified mainly according to the economic activity that is predominant in them. Accordingly, we have free trade zones, duty-free zones, free export zones, free investment zones, some free enterprise zones, free manufacturing zones, technology development zones, industrial estates or parks, and scientific parks. Newer types are urban enterprise zones, tourism zones, and agricultural export zones. The most common are export processing zones.
The implementation of special economic zones can be done 3 possible ways: fully public (government spends for everything and also acts as the developer, the zone operator and of course, the administrator), fully private (zones are fully-owned by the private sector who acted as the developer and private operator of the zones) or more often, as a public-private joint venture (the government provides some support such as infrastructure development, soft loans, equity investments in the zone project). In the case of China, it is mostly fully public because the government is very anxious to ensure the success of their SEZ as a showcase of its own system. Indian SEZ are mostly privately developed and financed by the business conglomerates in the country. However, charges have been leveled against some state governments for complicity in forced land acquisitions in the guise of state economic development. Critics call it “systematic land grabbing” at government level.