Special Economic Zones in the OIC Region:

Learning from Experience

Depending on the regulatory and legislative framework, SEZs can result in significant direct

employment provision for local workers. SEZs can also generate significant indirect

employment opportunities within local supply chains as companies within the zones source

inputs from outside the zone across the domestic economy. Indirect employment multipliers

range from approximately 0.25 indirect employees per direct employee within Mauritius’ EPZ

to 2.0 indirect employees per direct employee within Honduran SEZs.

In terms of labour force, businesses within SEZs are also more likely to provide employment

opportunities for women than those outside of SEZs given the propensity for targeted business

activities to be non-dependent on manual labour. Previous evidence suggests that female

employees can account for between 60% - 70% of the SEZ workforce globally, with some zones

comprising up to 90% female workforce.

Furthermore, through prioritising and targeting specific types of investors in key sectors, SEZs

can be used as a mechanism for developing and upgrading the local and regional skills base. This

in turn will have an additional positive impact on regional and national competitiveness as well

as poverty alleviation.

Investors can be targeted on the basis that they will create job opportunities with higher level

skill requirements and that this will in turn improve overall skill levels across the local labour

force. Often this process requires complementary activities on the part of the host government,

offering education and skills programmes that help create an appropriate labour supply for the

investor and its associated supply chain. The creation of jobs that have more sophisticated

technical and managerial characteristics are often sought from FDI. In many cases, senior

managerial jobs will have to be filled by nationals of the investor’s origin country, due to a lack

of these skills locally. However, again with appropriate complementary policies, involvement

with educational institutions and obligations placed upon the investor, these skills can also be

developed within the local labour force.

Gokhan Akinci and James Crittle, 'Economic Performance and Impacts', in Gokhan Akinci and James Crittle (eds), Special

Economic Zones: Performance, Lessons Learned, and Implications for Zone Development (WB Group, 2008)

WB Group, 'Fostering Women’s Economic Empowerment Through Special Economic Zones: Comparative Analysis of Eight

Countries and Implications for Governments, Zone Authorities and Businesses' (Report, June 2011)