COMCEC Trade Outlook 2018
61
 Greater emphasis on intra-OIC trade activities through the development of multilateral
agreements or possible free trade zone agreements,
 Institutional focus on developing soft infrastructure of skills development and of
entrepreneurship,
 Strengthening and development of an exclusive front on new Technologies,
 Promotion of public-private partnerships,
 Development of a data infrastructure, to monitor business dynamics and performance
by size of firms 42.
Moreover, the COMCEC TWG has focused on the theme of Special Economic Zones in the OIC
Member States in its 10th Meeting held on November 2nd, 2017. During the meeting, the
participants deliberated on the global practices and trends in special economic zones and the
current status of the OIC Member Countries regarding the special economic zones.
Special economic zones (SEZ) are important instruments for improving national and regional
economic growth and increasing national income. They enable countries to attract foreign direct
investments, facilitate economic diversification, create employment and deepen as well as
extend industry value chains. According to the research report prepared for this meeting,
through SEZs, governments can facilitate human capital development, generate government
revenue streams, reduce government expenditure on unemployment benefits and provide
markets for domestically produced goods and services. SEZs can also contribute to the host
country’s export rates due to their ability to produce goods and services, which are sold in
foreign markets.
The report reveals that there has been a rapid expansion of SEZs worldwide since 1980s. There
are approximately 242 SEZs operating within 33 OIC Member Countries. Approximately 36% of
SEZs in the OIC Region are Free Trade Zones, while approximately 25% are classified as Export
Processing Zones (EPZ). They are followed by Hybrid EPZs and other types of SEZs with 15%
and 14% respectively.
According to the report, the following challenges are faced by the Member Countries with
respect to the development of SEZs:
 Poor governance and regulatory environment - including ease of doing business,
 Poor business environment,
 Inefficient zone management,
 Unreliable utilities infrastructure,
 Poor quality transport infrastructure.
In order to address these challenges, the Working Group has come up with the following policy
recommendations:
 Designing and programming Special Economic Zones in line with the national economic
strategies for ensuring their complementarity with the national economic growth
targets and industry sector priorities,
 Improving economic performance of SEZ programmes through developing unique
incentives frameworks – fiscal and non-fiscal - which attract investments and foster
effective and efficient business environments,
42 COMCEC Coordination Office, 2013a.