Special Economic Zones in the OIC Region:
Learning from Experience
12
Further detail on the success of such programmes and their key challenges is set out in Section
and Sectio
2.6.1 Attracting Foreign Direct Investment (FDI)
The vast majority of SEZs are created to achieve greater levels of foreign direct investment
within the host country. The creation of SEZs can highlight to foreign investors that a country or
state is committed to foreign investment and can incentivise investment. The creation of more
effective investment environments with greater transparency and competitiveness can also
encourage and enable increased levels of FDI. By providing a variety of incentives, as well as a
higher quality physical operating environment, SEZs are utilised to attract investment that
might not otherwise consider the country as a possible location for investment. SEZs can also
reduce the risks to investment within locations and markets which are considered challenging.
Box 1 - Poland SEZs – FDI Stimulation 6 7 8 9
2.6.2 Facilitating Economic Diversification
Economic diversification objectives are often a key driver in SEZ implementation, particularly
within Countries which have identified an overreliance on specific natural resources to support
economic growth. SEZ development can help to facilitate the gradual emergence of services and
an export-orientedmanufacturing sector. A key success story has been the creation of Mauritius’
6 UNCTAD, Inward and Outward Foreign Direct Investment Flows, Annual, 1970-2013 (2014)
.
7 Ministry of Treasury, Government of Poland, Special Economic Zones in Poland: A Boost for FDI (2013)
.
8 UNCTAD, Inward and Outward Foreign Direct Investment Flows, Annual, 1970-2013 (2014)
.
9 EY Special Economic Zones Beyond 2020: Analysis of Current Activities and an Outlook for their Existence (2011)
; KPMG, A Guide to Special Economic Zones in Poland (2009)
; UNCTAD, Inward and Outward Foreign Direct Investment Flows, Annual, 1970-2013 (2014)
.
Poland established its SEZ programme in 1995, with FDI incentivisation a key aim of the
programme. It was recorded that between 1970 and 1985 the average annual FDI inflow to
Poland was $US 6.7 billion. Following adoption of the SEZ programme in 1995, the FDI inflows
into Poland totalled $US 158.6 billion over the period to 2010. It was recorded that over this
period FDI in SEZs was in excess of $US 21.9 billion demonstrating the significant contribution
these zones made to FDI inflows following their establishment.