Special Economic Zones in South Africa: Reflections from International Debates
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Special Economic Zones in South Africa: Reflections from International Debates Etienne L. Nel & Christian M. Rogerson
Published online: 9 January 2013 # Springer Science+Business Media Dordrecht 2013
Abstract South Africa’s experience with spatial economic interventions has had a chequered history with the Industrial Development Zone programme most recently failing to generate anticipated development. Current policy has shifted to the imminent launch of Special Economic Zones (SEZs) as tools for national (re)industrial development and supporting underdeveloped regions. This paper reflects on recent South African experience with spatial economic interventions and international experience with SEZs paying particular attention to their strengths, weakness and key establishment considerations. It is argued that unfolding South African SEZ planning can be strengthened by learning from the ‘good’ and ‘bad practice’ of international SEZs. Keywords Special Economic Zones . South Africa . Industrial Development Zones
Introduction Special Economic Zones (SEZs) are officially defined in South Africa as “a geographical designated area of a country set aside for specifically targeted economic activities which are then supported through special arrangements (which may include laws) and support systems that are often different from those that apply in the rest of the country”
E. L. Nel (*) Department of Geography, University of Otago, North Dunedin, New Zealand e-mail: [email protected] E. L. Nel : C. M. Rogerson School of Tourism and Hospitality, Faculty of Management, University of Johannesburg, Johannesburg, South Africa C. M. Rogerson e-mail: [email protected] E. L. Nel University of Johannesburg, Johannesburg, South Africa
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(DTI 2012a: 5). More broadly, an SEZ is considered a trade capacity development tool with the goal to promote rapid economic growth by using tax and business incentives to attract foreign investment and technology (Dohrmann 2008; Mishra 2008). Currently SEZs are a key feature of global industrial operations and there are now approximately 3,500 SEZs (or related zones) operating across 130 countries (Farole 2011). China’s economic success of recent decades has a clear association with that country’s over 200 SEZs. Other countries have implemented and replicated parallel zones in the hope of emulating China’s success with some authors stylizing this global phenomenon as ‘zone fever’ (Wong and Tang 2005: 303). Nevertheless, a number of investigations caution that not all SEZs have been successful in attracting investors and that issues of labour exploitation in these zones cannot be overlooked (Brun et al. 2002; Dohrmann 2008; Shah 2008; Farole 2011). The developmental impact of SEZs is contested with some authors regarding them in a positive light as ‘vehicles of globalization’. In particular, it is posited “SEZs can be a very promising strategy for industrialization and employment in Africa’s least developed countries” which also can allow for improvements in
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