Special Economic Zones in the OIC Region:
Learning from Experience
59
with the Tianjin Economic-Technological Development Area (TEDA) Investment Holdings
group.
Box 17 - Egypt TEDA Zone – Chinese Investment 50 51
4.5 Challenges of SEZ Development in OIC Member Countries
4.5.1 Key Challenges within OIC Member Countries
In terms of economic performance, SEZs within sub-Saharan African (SSA) OIC Member
Countries have performed comparatively worse than other in other regions, with some zones
struggling to generate positive employment generation and export performance. Whilst not
specific to OIC Member Countries, the following data in demonstrates the economic
performance of SSA zones compared to selected regions.
50 Zeng, (2015) Global Experiences with Special Economic Zones: Focus on China and Africa. World Bank.
51 Bräutigam, D.A. and X. Tang. (2013) Going Global in Groups: Structural Transformation and China’s Special Economic Zones
Overseas
By 2013 it was recorded that the TEDA zone had attracted 49 companies, with 38 operational
generating a workforce of approximately 1,000 workers and total investments of $358 million.
Companies located within the zone either sell within the domestic market, export to China or serve
other third party countries.
The zone’s partnership arrangement has been more successful than other examples of Chinese
investment in African SEZs due to balanced joint ownership agreements, including 25% from
Egyptian parties including banks and state owned enterprises, and clear management and
organisational structures. The management structure is tiered and includes a high level joint China-
Egypt Task Force for the zone. Additionally the zone has an individual Egyptian SEZ Authority which
operates under the Prime Minister, there is a licensed JV (Main Development Company) which has
authority to develop the zone and a development company (Egypt TEDA) which executes what has
been licensed to the Main Development Company.
Given the close relationship in operating, developing and managing the zone, there are also active
joint marketing activities both in China and in other global markets.
The zone has also benefited from a clear structured legal framework with regards to labour and
suppliers which states that one foreign employee is allowed for every nine Egyptians employed. It
is estimated that the first stage of the TEDA zone has generated 1,800 local workers of which
approximately 5% are Chinese.