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- Special Economic Zones
- When to Use an SEZ
- Constraints
Constraints
At a Glance
- SEZs face many of the same constraints that are present in the wider economy.
- Replicating the success stories of some early SEZs may no longer be possible given the global economy’s changing macroeconomic, technological, and regulatory environment.
Case Studies
- Expenditure Performance Review: Export Promotion in the IDZs (Megan Govender, Yash Ramkolowan, Matthew Stern)
- Special Economic Zones: Lessons for South Africa from International Evidence and Local Experience (Antony Altbeker, Katie McKeown, Ann Bernstein)
Key Resources
Topic Briefing
SEZs, despite their special nature, face many of the same constraints that are present in the broader economy. The size and capability of the domestic economy determine which types of investments are realistic, and the overall business climate may supersede any investment benefits available in zones. Weak investment climates tend to force the use of ever-greater incentives to offset competitiveness gaps and investor risks; this strategy is expensive and may not be sustainable in the long run. Extractive industry value chains are also prone to changes in commodity pricing, which can result in sudden changes in investment levels.