Special Economic Zone

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{rate, high, increase}
{country, population, people}
{area, part, region}
{law, state, case}
{city, large, area}
{area, community, home}
{island, water, area}
{government, party, election}
{village, small, smallsup}

A Special Economic Zone (SEZ) is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. "Nationwide" laws may be suspended inside a special economic zone. The category 'SEZ' covers a broad range of more specific zone types, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free Ports, Urban Enterprise Zones and others. Usually the goal of a structure is to increase foreign direct investment by foreign investors, typically an international business or a multinational corporation (MNC).

In the People's Republic of China, Special Economic Zones were founded by the central government under Deng Xiaoping in the early 1980s. The most successful Special Economic Zone in China, Shenzhen, has developed from a small village into a city with a population over 10 million within 20 years. India has also played a significant role in the founding and establishment of Special Economic Zones. It has the largest outsourcing industry in Asia.

Following the Chinese examples, Special Economic Zones have been established in several countries, including Brazil, India, Iran, Jordan, Kazakhstan, Pakistan, the Philippines, Poland, South Korea, Russia, Ukraine, United Arab Emirates, Cambodia, North Korea. Currently, Puno, Peru has been slated to become a "Zona Economica" by its president Alan Garcia.

A single SEZ can contain multiple 'specific' zones within its boundaries. The most prominent examples of this layered approach are Subic Bay Freeport Zone in the Philippines, the Aqaba Special Economic Zone Authority in Jordan, Sricity Multi-product SEZ and Mundra SEZ in India and According to World Bank estimates of 2007 there are more than 3,000 projects taking place in SEZs in 120 countries worldwide.

SEZs have been implemented using a variety of institutional structures across the world ranging from fully public (government operator, government developer, government regulator) to 'fully' private (private operator, private developer, public regulator). In many cases, public sector operators and developers act as quasi-government agencies in that they have a pseudo-corporate institutional structure and have budgetary autonomy. SEZs are often developed under a public-private partnership arrangement, in which the public sector provides some level of support (provision of off-site infrastructure, equity investment, soft loans, bond issues, etc.) to enable a private sector developer to obtain a reasonable rate of return on the project (typically 10-20% depending on risk levels).


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