Special Economic Zones in the OIC Region:
Learning from Experience
164
Examples from OIC Member Countries
Malaysia – Penang
In the case of the Penang FIZs (originally FTZs) a strategy was developed to use free economic
zones to attract key anchor tenants within the E&E industry which could be used to generate
large scale employment opportunities and drive economic growth within the State. This was
linked to national objectives targeting investment within the E&E sector. The alignment with the
national vision and objectives ensured political support and increased investor confidence when
choosing Penang as the location for investment.
6.2.2 Political Capital
There is evidence to suggest that where the responsibility for decision-making with regard to
SEZ development is determined by a single government ministry or authority, it will lack the
political support and direction to achieve success.
It is key for a SEZ programme to be supported by a range of government departments and
agencies in order for it to be successful. While the initiativemay be led, for example, by aMinistry
of Trade and Industry, there are other crucial government departments who oversee issues such
as infrastructure development (e.g. roads or ports agencies), work permits for foreign workers
(e.g. Ministry of Labour), customs procedures (e.g. revenue service), and investment promotion
(e.g. investment promotion agency). These departments or agencies not only have to be involved
but need to buy into the SEZ programme to facilitate effective delivery of services to the SEZ
programme.
It is also important for the executive in government to support the SEZ programme. This can be
done directly through a president or vice-president, for example, sitting on the SEZ board or for
a representative from the office of the president to be involved at a board level or management
support level. Executive support for an SEZ programme helps ensure that all those in
government understand that the programme is an executive priority and that effective
administration of the programme is a priority.
One tool, which can bring together different government stakeholders is SEZ working groups.
SEZ Working Groups
The formulation of SEZ working groups can be a key tool in ensuring that the full range of issues
and opportunities that an SEZ programme generates is captured and to ensure lateral support
from relevant stakeholders. Farole, Baissac and Gauthier (2012) 124 suggest that an effective
working group should be composed of highly experienced government technicians who have a
124 Farole, Baissac & Gauthier (2012) Special Economic Zones: A Guidance Framework for Policymaking.