Special Economic Zones in the OIC Region:
Learning from Experience
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developed alongside physical infrastructure such as port and airport infrastructure which
connect zones to regional and global markets as well as connect zone producers to inputs and
sources. In addition SEZs are typically provided with real estate, roads, electricity, water and
telecommunications to support the activities of the enterprises operating within the zones and
to create a business environment conducive to inward investment. This provision can be used
to differentiate SEZs from the domestic economy in countries where significant challenges exist
in providing low-cost and reliable infrastructure.
2.3 Working SEZ Typologies
The World Bank1 defines SEZs as falling within six broad typologies:
 Free Trade Zones (FTZs) : also known as commercial free zones, they are usually
fenced in, duty free areas offering warehousing, storage and distribution facilities for
trade, trans-shipment and re-export operations;
 Export Processing Zones (EPZ): are typically industrial estates aimed primarily at the
production of goods destined for foreign markets;
 Hybrid EPZs2: are typically sub-divided into a general zone open to all industries and a
separate EPZ area reserved for export-orientated, EPZ-registered enterprises;
 Enterprise Zones : are intended to revitalise distressed urban or rural areas through
the provision of tax incentives and financial grants;
 Freeports : typically encompass much larger areas. They accommodate all types of
activities, including tourism and retail sales, permit on-site residence, and provide a
broader set of incentives and benefits;
 Single Factory EPZs: provide incentives to individual enterprises regardless of
location; factories do not have to locate within a designated zone to receive incentives
and privileges; and
 Specialised Zones : such as science/technology parks, petrochemical zones, logistics
parks and airport based zones.
The following table provides a broad overview of the physical characteristics, economic
objectives, typical activities and example case studies within each identified typology globally.
1 World Bank (2008), SEZs: Performance, Lessons learned and Implications for Zone Development.
2 This definition has been included although it is acknowledged that there is currently some debate within the World Bank
over the validity of this SEZ type.