Special Economic Zones in the OIC Region:
Learning from Experience
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 Contract manufacturing & outsourcing, as well as more sophisticated segmentation of
production processes across different suppliers, especially in sectors such as Textiles
and Apparel;
 Increasing importance of service industries in many countries’ national economic
diversification programmes and a need to balance service sector growth with evolving
manufacturing specialisation;
 Decline of pure export platforms that involve limited value addition;
 Competitive advantage driven by sales, distribution & customer relationships rather
than low costs of production alone;
 Co-location of sales support with manufacturing to attract integrated manufacturing
clusters; and
 Compliance and CSR polices, environmental regulation and influence of more ‘ethical’
consumption patterns.
In addition, there are a number of policy trends that are also influencing SEZ programmes and
delivery approaches across the globe and these include:
 Global trade integration through WTO;
 Deepening of regional trade blocs and customs unions, particularly in Africa and Asia;
 Global and regional push for harmonization of tax incentives, partly to avoid problems
of ‘tax inversion’;
 Push for harmonization of investment rules;
 Climate change agenda – this includes countries’ evolving polices to develop greater
industrial resilience, as well as investors’ desire to locate production processes in places
that will mitigate the risk of climate change impacts adversely affecting production and
increasing operational costs;
 Environmental and social agenda, as well as ethical and fair trade approaches;
 Liberalization of telecommunications and information technology sectors;
 Crack-down on off-shore tax havens and tax inversion; and
 Trade and supply chain security in the face of political instability, conflict and climate
change related shocks.
Other recent research has suggested that the popularity of SEZs had previously been based in
part on the simplicity and effectiveness of arrangements around tax exemptions for