Special Economic Zones in the OIC Region:
Learning from Experience
1
Executive Summary
The objective of this report is to provide a comprehensive reference document to support policy
formulation, programme design and implementation of Special Economic Zone (SEZ) projects
within OIC member countries. It may also be used to guide member countries in the reforming
of existing SEZ projects.
This report serves as a database of experiences, lessons learnt and best practices in the process
of considering and deploying SEZs and provides an objective assessment of the effectiveness of
SEZs in the delivery of expected and achieved economic benefits, as well as their drawbacks and
limitations.
The objective of the study is to achieve the following:
1. To provide a resource document on OIC SEZs;
2. To explore the performance and economic impact of SEZs implementation in the
OIC Member States; and
3. To provide policy options and guidelines for establishing successful SEZs.
Defining Special Economic Zones
In broad terms, SEZs can be defined as demarcated geographic areas contained within a
country’s national boundaries where the rules of business are different from those that prevail
in the national territory.
The result of these enhanced conditions is that the zone is providedwith a business environment
which is intended to be more conducing to value added through private sector investment from
a policy perspective and more effective from an administrative perspective than that of the
national territory.
Underpinning the development of SEZ programmes there are many multi-faceted reasons for
their selection as policy instrument. Broadly however they are typically concerned with
achieving a number of economic and policy objectives such as increasing foreign direct
investment, facilitating economic diversification and reform and generating employment.
Critical success factors for SEZs include their ability to attract investment and create jobs, their
ability to deliver structural transformation and to catalyse economic reforms; and their impact
on social and environmental objectives.
Global SEZ Experiences
It was estimated that there were around 3,500 special economic zones worldwide by the mid-
2000s. Although many of these are single factory zones, it shows a rapid expansion since the
mid-1980s when it was estimated that there were just over 170.