SEZ

A Special Economic Zone (SEZ) is a geographically delimited area within a country in which economic regulations, investment incentives, and administrative procedures differ from those of the rest of the economy. SEZs aim to attract foreign and domestic investment, boost exports, and spur industrial development by offering tax concessions, simplified customs, and access to dedicated infrastructure. They often host manufacturing, processing, or service activities and may be run by government agencies, private developers, or public-private partnerships.

The modern SEZ concept emerged in the late 20th century as governments sought growth through export-oriented development. China popularized SEZs in the early 1980s, beginning with Shenzhen, as a testbed for reforms and foreign investment. Since then, many countries have established SEZs or zones with similar goals under different names, such as export processing zones or free-trade zones.

Typical features include tax holidays or reduced rates, exemptions or streamlined duties on imported inputs, simplified customs, faster permitting, and improved infrastructure. SEZs are often governed by specialized authorities and may permit regulatory flexibilities, with zones sometimes focused on manufacturing, logistics, high-value services, or technology sectors.

Economic effects vary by country and zone. Proponents cite higher investment, job creation, technology transfer, and regional development, while critics note potential revenue losses, weak linkages to the wider economy, and concerns about labor rights or environmental impact if oversight is lax. Notable examples include China's early zones such as Shenzhen and extensive programs in other regions.