In a recent comprehensive econometric study on the SEZ policies in China and India, Leong(2007) investigates the impact of opening up the Chinese and Indian economy on economic growth in these countries using new panel data sets for both the national economies and the regional economies of China. The policy change to a more liberalized economy is explicitly identified using instrumental variables. The results provide support that export growth does have a positive and statistically significant effect on economic growth in these countries. However, the growth rates of these countries are export and FDI inelastic, in the sense that a one percentage point increase in growth rate of export or FDI will have a less than one percentage point increase in economic growth rate of these countries. In the case of the Chinese regions, the presence of export processing zones may exert positive effect on the regional growth rate but the increase in regional growth is even more export inelastic than at the national level. The result dispel the popular view that adopting a policy of more openness in the economy has a “multiplier” effect on economic growth. Of the two phases of liberalization in both countries, the second stage is statistically significant. One possible reason is that the scale of liberalization is greater in the second phase. Additionally, increasing the number of SEZs has very negligible effect on economic growth. Taken together, these results suggest that what contributes to greater growth is a greater scale of liberalization, rather than increasing the number of SEZs.
According to World Bank estimates, as 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).
Currently, India has 1022 units in operations in 9 functional SEZs, each an average size of . 8 Export Processing Zones (EPZs) have been converted into SEZs. These are fully functional. All these SEZs are in various parts of the country in the private/joint sectors or by the State Government. But this process of planning and development is under question, as the states in which the SEZs have been approved are facing intense protests, from the farming community, accusing the government of forcibly snatching fertile land from them, at heavily discounted prices as against the prevailing prices in the commercial real estate industry. Also some reputed companies like Bajaj and others have commented against this policy and have suggested using barren and wasteland for setting up of SEZs.the special economic zones
Attempts to set up a Special Economic Zone in Nandigram have led to protests by villagers in the area. A Parliamentary Committee to study and give recommendations on SEZs has said that no further SEZs be notified unless the existing law is amended to incorporate the changes related to the land acquisitions.
Other economic zones include the China-Pakistan economic zone open only to Chinese investors and also the future crown jewel of Pakistan, Gwadar.
There are also talks of creating a Japanese city for foreign investors from Japan only.
There has also been new SEZ proposed on the currently under construction Sialkot-Lahore motorway, Qatar has proposed an investment for $1 billion in a new SEZ along the motorway.
There is also a new zone under construction in Faislababd, which will be the biggest industrial estate of Pakistan when complete, it has sections for each country and the first phrase is already complete with a special Chinese zone in it.
|NCEEZ Syvash||Autonomous Republic of Crimea||1996||5 years|
|Slavutych||Slavutych, Kiev Oblast||2,000 ha||30.06.1998||till 01.01.2020|
|Azov||Mariupol, Donetsk Oblast||315 ha||21.07.1998||60 years|
|Donetsk||Donetsk, Donetsk Oblast||466 ha||21.07.1998||60 years|
|Zakarpattia||Uzhhorodskyi Raion and Mukachivskyi Raion, Zakarpattia Oblast||737 ha||09.01.1999||30 years|
|Yavoriv||Yavorivskyi Raion, Lviv Oblast||116,000 ha||17.02.1999||till 01.01.2020|
|Interport Kovel||Kovel, Volyn Oblast||57 ha||01.01.2000||20 years|
|Kurortopolis Truskavets||Truskavets, Lviv Oblast||774 ha||01.01.2000||20 years|
|Mykolaiv||Mykolaiv, Mykolaiv Oblast, shipyard territory, and adjoining area||865 ha||01.01.2000||30 years|
|Port Krym||Kerch, Autonomous Republic of Crimea||27 ha||01.01.2000||30 years|
|Porto-Franco||Odessa, part of Odessa Trade Sea Port's territory||32 ha||01.01.2000||25 years|
|Reni||Reni, Odessa Oblast||94 ha||17.05.2000||30 years|
|* Initially planned time of operation given. All zones were shut down on March 31, 2005.|
NCEEZ — Nouth-Crimean Experimental Economic Zone.