Special Economic Zones in the OIC Region:
Learning from Experience
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3 Learning Lessons from Global SEZ Experience
3.1 Introduction
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.
The predominant typology has changed from traditional EPZs to more mixed special economic
zones with multiuse developments incorporating industrial, commercial, residential and even
tourism activities. Some are moving to highly specialised developments focusing on high-end
services such as ICT and biotech. Another trend is to see the increasing importance of private
sector involvement and a move away from purely publically funded schemes.
Critical success factors for SEZs include their ability to attract investment and create jobs, their
ability to deliver structural economic transformation and to catalyse economic reforms; and
their impact on social and environmental objectives.
The ability to attract investment is highlighted by fDi Magazine’s global ranking of economic
zones which awarded Dubai Multi Commodities Centre (DMCC) the title of Global Free Zone of
the Year 2016. One of the judges’ reasons cited was the bespoke nature of the developments
within the Free Zone which are custom made for investing companies. In addition, the zone has
digitised service provision allowing investors to log on to any device anywhere across the globe
to access its services. Setting up a business in the zone has also been streamlined and can now
be undertaken in 15 days whilst business renewals can be undertaken in just four days. Again,
these processes are digitised allowing investors to access the relevant paperwork in hours.25
3.2 Emerging Global Trends
In the last five decades, more than two-thirds of all countries around the world have developed
SEZs and, as noted above, over 3,500 SEZs are now in operation globally. Collectively, these SEZs
account for over 850 billion USD in international exports and provide direct employment for
more than 66 million people worldwide. SEZs have been implemented both in emerging market
economies, including Brazil, China, India, Russia and South Africa (it is less developed countries
that are normally associated with SEZs), as well as in advanced economies, such as Canada,
France, Singapore, the UK and the US26.
In countries which initially developed SEZ formats for industrial growth, from the 1950s to the
1970s, such as India, Indonesia, Ireland, and the Philippines, the ongoing focus has tended to be
25 FdI Magazine, (2016) Global Free Zones of the Year 2016.
26 DLA Piper, (2017) Special Economic Zones Best Practice Guide and Case Study Booklet, manuscript.