Download - SEZ case studies
SEZ case studies7th Working Group Meeting on Investment Zones in Iraq
Anders Jönsson, Southeast Asia Division, GRSMike Pfister, Investment Division, DAFParis, France17 February 2015
Disclaimer
This presentation is not a result of OECD research and represents the insights and opinions of the presenters only.
The 1995 reforms catalysed a remarkable transformation both of SEZs and the economy as a whole.
1995: 16 economic zones
Characteristics: EPZA authorityMostly public zonesNo substantial delegation of authority to EPZA to interact with zone residentsUnclear and conflicting goals
SEZ Act of 1995
Major reforms:Move towards private sector zone developmentPEZA, under DTI, took over the functions of EPZADual mandate: Promotion and regulationClear focus on employment creation, export generation, and FDI promotion
2008: 166 economic zones
Successes:61 industrial estates, 99 IT parks, 5 tourism zones, 1 medical parkFrom 9.6 bn PHP investment in 1994 to 133.7 bn PHP in 20083500% growth since 1994
One-stop shop• Permits for building, occupancy,
import, export and exemptions from local government requirements
• Special non-immigrant visas• Harmonised customs through
PEZA-BOC MOA• Environmental clearance through
PEZA-DENR MOA• Approval takes one business day• Transparent and immediate
incentive allocation
One-stop shop plus• PEZA availability 24/7• DG interacts directly with residents• PEZA investment promotion and
zone stakeholder advocacy• Commitment to transparent, graft-
free administration
PEZA services go far beyond simple administration.
Key success factors for SEZs in the Philippines include good governance and private sector inclusion.
Requirements KSF of the Philippines
Clear objectives Clear focus on FDI and diversification
Adapted to market demands
Most zones developed by the private sectorPEZA has a supervising and co-ordinating role
Delegation and delimitation of authority
PEZA has far-reaching authority and autonomy to issue licenses and interact with zone residentsPrivate sector takes care of non-state functionsClear institutional structureClear financing roles
Low transaction costs for zone residents
Excellent infrastructureLowered cost of regulatory complianceFocus on cost reduction and just-in-time deliveries at PEZA
Access to labour Availability of skilled labourStaff training support through PEZA
Efficient promotion PEZA promotes zones overall, and private operators promote specific opportunities
Strong political support SEZs have a strong role in all national economic planning instruments.
Overall economic challenges• Sustained 6-9% growth over the past decade
under President Noynoy Aquino; • But growth driven largely by resource
allocation – overall TFP growth slightly negative;
• Main driver: BPO – but employment not substantial, especially for non-skilled employees;
• Manufacturing in decline; • Lack of a „missing middle“ of competitive,
exporting medium-sized companies; • Graft remains pervasive; • Dependence on remittances and highly volatile
and integrated sectors of the economy; • Brain-drain – although the Filipino work force
is highly educated relative to its level of economic development, many opt to seek employment abroad.
Challenges for SEZs• Pervasive lack of domestic linkages apart from
employment due to; Legal obstacles; Weak domestic entrepreneurship (cf.
Malaysia).• Difficulty in generalising SEZ reforms to the rest
of the economy, creating incresingyl isolated enclaves;
• Increasing problems of graft and contraband; • Decline of labour-intensive activities, such as
light manufacturing.
But substantial structural obstacles remain over the next decade.