Special Economic Zones in the OIC Region:
Learning from Experience
24
on the continuation or closure of existing SEZs in the context of national economic policy
reforms. In contrast, a number of countries which implemented SEZs more recently from the
1980s and into the 2000s, such as Iran, Kazakhstan, Nigeria, Poland and the UAE, have
increasingly focused on how to enhance their zones' competitiveness in the context of the
thousands of other zones now in operation. One of themost pressing challenges for SEZs globally
therefore, and particularly new ones coming on-stream now, is how to assert a unique
investment proposition that maximises competitiveness and goes beyond standard format
infrastructure provision or increasingly common forms of fiscal incentivisation.
There has also been an emerging trend of cooperation between countries in developing SEZs,
the most notable example being state sponsored economic cooperation between a number of
African countries and China. This cooperation emerged in 2000 following the 1st Ministerial
Conference of the Forum on China-Africa Cooperation (FOCAC) in which China pledged to
facilitate best practice sharing of SEZ development with African countries. 27 In 2015 it was
recorded that SEZs had been developed in six African countries; Algeria, Egypt, Ethiopia,
Mauritius, Nigeria and Zambia. 28 These zones are seen as an important vehicle for the relocation
of Chinese manufacturing activity away from mainland China to Africa and different forms of
financial support are available from the China-Africa Development Fund for investors. Further
interest and investment in Chinese-led SEZ development is likely to grow following adoption of
the ‘One Belt, One Road’ policy in China and its emphasis on cross-border economic cooperation
zones.
A number of key trends, in both industrial and policy terms, are now impacting upon how
countries determine their international trade and FDI polices and these are also increasingly
influencing the development plans for SEZs across many regions. Global industrial trends
include the following29:
 Expanded global production networks and increasing utilisation of systems of niche
international suppliers particularly in higher-value and more specialised manufactured
goods;
 Increasing importance of supply chain management (logistics costs being increasing at
a higher rate than manufacturing costs, particularly in regions poorly served by
infrastructure such as Africa);
27 UNDP, (2015) If Africa Builds Nests, Will the Birds Come? Comparative Study on Special Economic Zones in African and
China.
28 Xiaoyang, T (2015) How do Chinese ‘Special Economic Zones’ Support Economic Transformation in Africa?
29 Global SEZ Team - World Bank Group SEZs as an Institutional Micro Climate (presentation)