Special Economic Zones among the paucity of realistic interventions

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Amongst a plethora of potential economic recovery strategies and a paucity of realistic interventions is the phenomenon of Special Economic Zones (SEZs). Special Economic Zones are geographically delimited areas wherein governments facilitate industrial activity through fiscal and regulatory incentives and infrastructure support.

SEZs can make important contributions to growth and development by attracting investment, creating jobs and boosting exports. Special Economic Zones can build forward and backward linkages within the broader economy and support global value chain (GVC) participation, industrial upgrading and diversification (UNCTAD, 2019). Globally, there is a booming wave of SEZs with over 5 400 operational in 147 countries and over 500 in the pipeline (UNCTAD), 2019).

According to Bernard Hoekman, Director International Trade Department World Bank (2011), China’s astonishing economic growth can be attributed to the use of Special Economic Zones. One of the striking examples is the transformation of Shenzhen, a former small fishing village in the 1970s, into today’s city of over 9 million people, which is an illustration of the effectiveness of the SEZ model within the Chinese context.

Hoekman asserts further that SEZs offer a potentially valuable tool to overcome some of the existing constraints to attracting investment and growing exports for many African countries that continue to struggle to compete in industrial sectors and to integrate into the global value chains that generate goods and services for global markets.

The South African Industrial Policy Action Plan (IPAP) recognises the SEZ programme as one of the critical tools for accelerating industrialisation. As a result, eight Special Economic Zones were designated in six provinces as follows: Saldanha Bay (Western Cape), Dube Trade Port (KwaZulu-Natal), OR Tambo (Gauteng) Coega (Eastern Cape) East London (Eastern Cape), Richards Bay (KwaZulu-Natal), Musina-Makhado (Limpopo), and Maluti a Phofung (Free State).

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