Can special economic zones drive growth in developing cities?

The Oxford Urbanists/IGC Cities that Work co-host the third part of the panel series for a discussion on the effectiveness of special economic zones in developing cities. Practitioners and researchers from across the Oxford community discuss how SEZs have historically driven economic growth in various geographic contexts, how they can do so in the future.

With the end of the commodity boom, many developing countries are now looking away from natural resources and towards the manufacturing sector as a source of economic growth. In order to do this, many hope to learn lessons from East Asia, where Special Economic Zones (SEZs) played a fundamental role in boosting manufacturing and driving economic transformation. By focusing physical infrastructure and legal reforms in particular zones, East Asian countries have been to productively cluster businesses together – for example the electronics cluster in the Shenzhen Special Economic Zone, China. In 2007 Chinese SEZs accounted for over 20% of the country’s GDP and generated over 30 million jobs (Zeng, 2010).

However, the experience of SEZs outside East Asia has been mixed. Whilst in countries such as Ethiopia, SEZs are increasingly attracting investors and generating jobs, this is far from common. In countries such as Nigeria and South Africa, SEZs have become vastly expensive ‘white elephants’ – either failing to attract any businesses to locate there, or simply using up scarce resources to incentivise existing firms to relocate to the area.
This panel explores in more detail the promise of SEZs, and what the key factors are that determine their success or failure.

Panellists:

Tony Venables – Professor of Economics at the University of Oxford, Director of the Centre for the Analysis of Resource Rich Economies.

Xiaolan Fu – Founding Director of the Technology and Management Centre for Development (TMCD), Professor of Technology and International Development and Fellow of Green Templeton College.

Alejandro Riano – Associate Professor in the School of Economics at University of Nottingham.

For more information about the event, please contact Michael Blake at michael.blake@bsg.ox.ac.uk.