Special Economic Zones in the OIC Region:
Learning from Experience
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Box 15 - Malaysian EPZs48
Box 16 - Bangladesh EPZs 49
There has also been notable successes in countries such as Egypt which have managed to
leverage Chinese investment to implement successful SEZ programmes. A good example of this
is the Suez Economic and Trade Cooperation Zone which has been developed in partnership
48 Asian Development Bank (2015) Asian Economic Integration Report 2015: How can Special Economic Zones Catalyze
Economic Development.
49 Bangladesh Export Processing Zones Authority (BEPZA) (2016) BEPZA Annual Report 2015-2016.
Malaysia is one of the most successful OICMember States in terms of achieving industrial evolution
through SEZ development. The Industrial Strategy adopted in 1987 focused on EPZs as growth
poles fromwhich integration with the domestic economy was promoted with the aim of increasing
the volume of domestically sourced products to MNCs within the zones and increasing backward
linkages with the domestic economy. This approach resulted in domestic suppliers acquiring new
skills and competencies.
In addition, MNCs within the EPZs invested in the existing skills and knowledge of their staff
resulting in a high proportion of Malaysians occupying managerial and technical occupations. This
demand for skilled workers and managers also resulted in public/private sector collaboration in
skills development such as the creation of the Penang Skills Development Centre in 1989 in the
Bayan Lepas Free Industrial Zone.
This transfer of technology and knowledge can be observed in the number of Malaysian executives
within MNCs in Malaysia. It is further demonstrated by the gradual movement of research and
development facilities to Malaysia, facilitated by the strength of Malaysian technical staff.
In 2006 it was estimated that SEZs within Malaysia accounted for 72% of FDI, 83% of exports and
5% of employment; predominantly within the E&E sector.
Bangladesh, in 2015, provided employment for approximately 450,000 workers within eight EPZs
which accounted for approximately 20% of total exports (US$ 55.19 billion). In the period 2002-
2008 export values were US$ 11.0bn, compared to a total of US$ 31.7bn between 2009-2015. This
indicates significant growth over recent years of approximately 187%. However, whilst export
values have increased following the introduction of EPZs, it has been noted by some that zone
development has had little success in economic diversification with garment production still the
primary production activity despite aspirations to increase the number of high technology
industrial activities.
Bangladesh has however been very successful in generating employment opportunities for women
with approximately 64% of the zone workforce comprised of women.