SPECIAL ECONOMIC ZONES

TOPIC:
SPECIAL ECONOMIC ZONES

INTRODUCTION
Special Economic Zones (SEZs) are considered one of the major elements stimulating rapid
development in countries like China, Poland, South Africa and Malaysia. Global evidence
correlates successful implementation of SEZs with substantial increases in GDP, employment,
trade and technology transfer. The successful execution of any SEZ is dependent on, along with
the socio-economic and political milieu, the prevailing governance structure, administrative
setup and institutional framework.

To encourage businesses to set up in the zone, financial policies are introduced. These policies
typically encompass investing, taxation, trading, quotas, customs and labour regulations.
Additionally, companies may be offered tax holidays, where upon establishing themselves in a
zone, they are granted a period of lower taxation.
The creation of special economic zones by the host country may be motivated by the desire to
attract foreign direct investment (FDI). The benefits a company gains by being in a special
economic zone may mean that it can produce and trade goods at a lower price, aimed at being
globally competitive. In some countries, the zones have been criticized for being little more
than labor camps, with workers denied fundamental labor rights
.
The definition of an SEZ is determined individually by each country. According to the World
Bank in 2008, the modern-day special economic zone typically includes a "geographically
limited area, usually physically secured (fenced-in); single management or administration;
eligibility for benefits based upon physical location within the zone; separate customs area (duty-
free benefits) and streamlined procedures.

Literature review:
The literature suggests that SEZs have the power to bring FDI and new businesses to regions and
to boost exports; and that SEZ based firms perform better than non-SEZ-based firms. However,
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regarding increasing employment and achieving spillovers in the larger region, the literature is
inconclusive. The positive effects of SEZs clearly are interrelated with the contexts in which they
are implemented, that is, the capacities of non-SEZ-based firms and the supporting policies.
Most of the literature that has delved into the analysis of the impacts of SEZs has adopted a case
study approach, mainly as a consequence of the limited availability of cross-country data to
measure SEZ outcomes. Many of these cases are solid analyses of the economic dynamism and
influence of individual zones and provide interesting insights about these zones’ viability and the
characteristics that make them successful. The majority of this research has focused on the most
successful cases. This fact raises questions about the validity of generalizing the factors behind
the success of a specific SEZ, which is embedded in specific economic, social, political, and
legal contexts. Thus, replicating policy and incentive models is tricky. Despite providing very
interesting policy insights, extracting wide-ranging policy implications from this type of
“successes-only” analysis remains risky.

Scope of the study

This study is designed to contribute to Pakistan’s deliberations on its SEZ initiative. It begins by
acknowledging the contribution of SEZs globally to respective GDP, trade and investment levels,
identifying the scope of success. For a comprehensive understanding of both the positive impacts
and challenges associated with SEZs, the study explores international experiences with SEZs
with a particular focus on China. The study then reviews Pakistan’s industrial context by
evaluating on-ground realities, assessing the state of preparedness for SEZs under CPEC and
finally, offering recommendations.

Promising impacts of SEZs

A key question often asked is “Why do we need SEZs?; Why can’t we allow industrial clusters
across country?”. The answer is that internationally, SEZs have contributed to economies by
bringing phenomenal changes in growth rates, boosting regional development, generating
employment opportunities, and providing basic infrastructural foundations by concentrating
related industry at a given focal space. SEZs generate value added product chains by creating
space for new entrants in manufacturing markets. They generate resources for socioeconomic
uplift by improving livelihoods and creating a demand for intermediate goods and services. SEZs
also enhance the productivity and managerial skills of the workforce through exposure to
international best practices. There are also technology transfer spillovers to domestic firms in
identifiable industrial clusters. Overall, evidence suggests, with SEZs the global competitiveness
of a country enhances.

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Types and selection

The term special economic zone can include:

 Free-trade zones (FTZ)

 Export processing zones (EPZ)
 Free economic zones (FZ/ FEZ)
 Industrial parks / estates (IE)
 Free ports
 Bonded logistics parks (BLP)
 Urban enterprise zones

World Bank special economic zone types[5]

Typical Typical
Type Objective Size Markets
Location Activities

<50
Entrepôts and Domestic, re-
FTZ Support trade hectares Port of entry
trade related export
(120 acres)

<100
EPZ Export Manufacturing,
hectares None Mostly export
(traditional) manufacturing processing
(250 acres)

EPZ (single
Export Manufacturing,
Unit/free No minimum Countrywide Mostly export
manufacturing processing
enterprise)

<100
Export Manufacturing, Export,
EPZ (hybrid) hectares None
manufacturing processing domestic
(250 acres)

Free port/SEZ Integrated >1,000 None Multi-use Internal,

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World Bank special economic zone types[5]

Typical Typical
Type Objective Size Markets
Location Activities

hectares
domestic,
development (2,500
export
acres)

Urban <50
Urban
enterprise hectares Urban/rural Multi-use Domestic
revitalization
zone (120 acres)

Challenges
SEZs do not differ from other facilities in industrializing economies. As with any technique
administered used by a globalized economy there are oversights by actors that are not domestic.
Transnational criminal organizations and terrorist groups have taken advantage of Special
Economic Zones and their lack of regulations.

PROBLEM IDENTIFICATION/NEED:
To facilitate rapid economic growth by leveraging tax incentive to attract foreign investment and
spark technological advancement in background area Ali Pur head panjnand that is connected
with C-PEC also want to generate business industry and institutional area that help to improve
poor economy of this area and also stabilized industry failure in Pakistan because the reason of
industry failure in Pakistan a shortage of skilled and trained workers in the industrial sector.
Without a skilled workforce, industries struggle to adopt advanced technologies and
improve productivity.

AIM AND OBJECTIVE

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To grow ali pur and all around business industry for the economy of Pakistan. Pakistan having
GDP last year 1.262 trillion at the end of the 2023 .SEZs have contributed to economies by
bringing phenomenal changes in growth rates, boosting regional development, generating
employment opportunities, and providing basic infrastructural foundations by concentrating
related industry at a given focal space.

 To Anchor for attracting FDI Growth Contribution.

 To Industrial Development.
 To Employment generation.
 To Technology Transfer and Productivity enhancement.
 To Increase in Exports.
 To Skill Development & Capacity Building.
 To Development of Pakistani Brands.
 To Development of Vendor Industry & Supply Chain

LIMITATION:
Textile industry:
The textile industry is the largest and most significant industry followed by the agriculture
industry, which is the backbone of the country's economy. The information technology industry
is rapidly growing, while the construction industry has also been picking up pace in recent years

Cotton industry:
Pakistan occupied the fourth position among the cotton growers of the world, the first three being
India, China and USA

Trading:
Trading companies are businesses working with different kinds of products which are sold
for consumer, business, or government purposes. Trading companies buy a specialized range of
products, maintain a stock or a shop, and deliver products to customers.
Different kinds of practical conditions make for many kinds of business. Usually two kinds of
businesses are defined in trading.
Importers or wholesalers maintain a stock and deliver products to shops or large end customers.
They work in a large geographical area, while their customers, the shops, work in smaller areas
and often in just a small neighborhood.
Today "trading company" mainly refers to global B2B traders, highly specialized in one goods
category and with a strong logistic organization. Changes in practical conditions such as

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faster distribution, computing and modern marketing have led to changes in their business
models.
Warehouse:
A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers,
exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings
in industrial parks on the outskirts of cities, towns, or villages

Institute:
The goal of any technical institution is to produce skilled, globally competent professionals
through quality technical education and to prepare them for immediate employment. Industries
engross these knowledgeable professionals and enhance its production capabilities by
contributing the latest technologies. To produce proficient graduates ready for the industry, it is
necessary to know the requirements of the industries through industry-institute interaction.
Hence, a good and vibrant industry institute interaction to promote education and
entrepreneurship is definitely required. To build good rapport between the industry and the
institute, institutes should have Memorandum of Understanding (MoU) with the industries

LIMITATION:
SITE:
Ali pur uch sharif under CPEC

LOCATION:
Head panjnand Alipur

APPROACHES:
C-PEC ,karchi road , uch sharif road ,Head Panjnand land of five rivers , Ali Pur , Sher Sultan ,
Bahawal Pur ,

SITE SURROUNDINGS:
Head Panjnand land of five rivers , Ali Pur , Sher Sultan , Bahawal Pur ,

REASON FOR SELECTING THIS SITE

This site suitable for the business industry and institute for the rural area. From muzaffar garh to
sadaqabad there is no technical institute and any business industry for the poor people and this
site is located in the mid of this area. I also belong to this area this site is mid of the Pakistan and
also give many chances to grow Pakistan economy because the construction of this site.

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PROPOSED CONCLUSION
Muzaffar Garh ,Ali Pur ,Uch Sharif is the lowest backward area of the Pakistan The conclusion
of a special economic zones in this area often involves a business industry and also give
institutional opportunity for the people who deprived from the all surroundings areas Pakistan
business industry is going to be failed due to lake of trading and marketing of the products we
need to attract foreign investor to invest in Pakistan business and also promote technical institute
in Pakistan for the developing of this country we need to improve business and literacy rate .
Before SEZs, Pakistan established IEs and EPZs nation-wide under Statutory Regulatory Orders
(SROs) issued by the Ministry of Industries and Production (MOIP). However, a number of
market failures, like uninterrupted provision of utilities, compromised security and Law & Order
situation, unfavorable conditions to attract FDI and technology transfer and Tax complexities
forced the policy makers to think out of box. Resultantly, in 2012, the SEZ Act was promulgated
under which special incentives are promised to enterprises at notified SEZs in the country.
Moreover, under the China Pakistan Economic Corridor (CPEC) launched in 2015, nine
additional Priority SEZs (PSEZs) were announced jointly by the two governments, but these are
still to be notified in total. Though recently, on March 04, 2020, 10 SEZs (including 3 PSEZs i.e.
Allama Iqbal, Faisalabad (Punjab); Bostan (Balochistan) and Rashakai (KPK)) are approved by
the Prime Minister (to be notified by BOA), following a lag of 4 years from the firstly notified 7
SEZs in 2016.

REFFERENCES
Abbas, Ahsan, and Saira Ali. 2017. “Nine Proposed Priority SEZs under CPEC and SEZ Act; an
Approach to Industrial Development.” CoE CPEC Working Paper No. 016/2017. Retrieved from

https://cpec-centre.pk/wp-content/uploads/2018/04/016.pdf.

Research-Report-Special-Economic-Zones-in-Pakistan-Promises-and-Perils.pdf

https://www.studyiq.com/articles/special-economic-zone/

https://en.wikipedia.org/wiki/Special_economic_zone

world bank.pdf

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