Ageing Populations in the West and their Impact on Healthcare Management
Shock of Gray The term shock of gray refers to the phenomenon of the western societies having older people as a percentage of the total population than the younger people. in other words, the shock experienced by having more retirees and those over 70 years of age and the graying of the population are expected […]
The Rise of Protectionism and What it Means for Globalization
Globalization gone too far? Many experts believe that the pace of globalization had accelerated so much in the period starting from 1990 to 2007 that the global economic crisis that happened in 2008 revealed the drawbacks of too much integration, interconnection, and interdependence. This is seen by many as the inevitable consequence of globalization going […]
Why Wealth Tax has been Abolished All Over the World?
Taxation is a hotly debated subject all over the world. There are supporters of capitalism who already believe that the rich are being taxed too much. On the other hand, there are supporters of socialism who cite increasing wealth disparity and argue that the rich should be taxed even more. The idea that the rich […]
Understanding the Paradigm Shift in the Global Economy
For a long time in the 20th century, the global economy was divided into the developed West and the Third World or the developing economies of Asia and Africa. Any discussion about the economy would invariably be around how many poor people are there in Asia and Africa compared to the affluence that the West […]
From Oxcart to Wal-Mart: Dealing with Duality in Emerging Markets
From Oxcart to Wal-Mart As more and more international retailers make a beeline for emerging markets like India, China, Nigeria, Mexico, and other markets, it is important for these retailers to embrace the chaos and duality that is inherent to these markets. For instance, in India, more than 95% of the retail market is dominated […]
Countries have long since realized the importance of furthering their interest by supporting the International Trade and Exports from in house and actively supporting the industries to become globally competitive. Besides this objective, many governments also aim to promote Foreign Direct Investment into the country and encourage Multi National Companies to set shop and manufacture goods for home consumption as well as Exports. In order to support such initiatives most countries set up Special Economic Zones in their country.
Governments develop certain underdeveloped or rural regions as industrial parks, provide international standard amenities and designate such zones as Special Economic Zones. These areas are normally exempt from most of the normal trade barriers, tariffs and national laws and seek to promote free market export oriented manufacturing activities. There are several sub categories of Special Economic Zones (SEZ) namely Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial Parks, Free Ports etc.
The Governments give preference to large scale manufacturing or assembly units to be set up by Multi National Companies of repute and provide tax holidays as well as waiver of many of the formalities required to be followed by the Companies in the said Zone. Typically the Companies import Raw Materials and manufacture goods locally thus using local cheaper labor and Export the goods outside the Country. Both the Imports and Exports are exempt from Customs Duties and other levies. Only the goods that enter the local market as domestic sale product are taxed. Such manufacturing intensive zones help generate a lot of employment in the rural sector and lead to the overall development of the area and in turn stimulate economic growth in the area. Besides local growth of the area, it helps country earn huge foreign exchange as well.
Ireland was the first country to set up Shannon Free Zone which was followed up quickly by most of the developing countries like Philippines, Malaysia, China, India, Mexico, Costa Rica, Honduras, and Guatemala etc. The list of countries now having adopted EPZ has cross over 100 numbers.
While Jabil Ali FTZ made a huge impact on Dubai and its growth, China has benefited from its most successful SEZ - Shenzhen which helped employ over 10 million people. India has become one of the Asia’s largest outsourcing hubs thanks to establishment of SEZs through out the Country.
Though in many countries the SEZs are implemented by the Governments, quite a few SEZs have been implemented by private parties too as private operator, private developers. Quite a few countries have adopted a mid path of setting up public sector quasi-government agencies with a pseudo corporate institutional structure and autonomy in operations. In some other cases SEZs have also developed on the basis of public-private partnership arrangements.
SEZs can be said to be the precursor for establising liberal market economy and free trade. Today world over more than 3000 FTZs in over 116 countries are employing appx. 43 million people engaged in manufacturing of various consumer items such as clothes, shoes, electronic gadgets, computers and toys etc.
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