Economic Zones: Learning from Global Experience

The International Finance Corporation and the Foreign Investment Advisory Services (a joint service of the World Bank and IFC), with the financial support of Switzerland’s State Secretariat for Economic Affairs (SECO), hosted a workshop on prospects for Economic Zones in New Delhi, India on April 29-30, 2004.  

Over 125 participants from South Asia participated in the workshop, including senior government officials, private sponsors, developers, operators, potential business owners, financial institutions, and regional government representatives from various countries in the region.  Discussions centered on infrastructure requirements, policy regime, management structure, problems and solutions, location choices, and other key issues. 

The workshop aimed to provide a forum for dialogue by bringing together potential investors, developers, business owners, and policy makers to discuss the prerequisites for attracting private sponsorship and investment in economic zones in the region. Speakers from China, the UAE, the Philippines, Mauritius, Kenya, Costa Rica, and the USA joined experts from IFC, FIAS, and the World Trade Organization in describing the experience of similar zones elsewhere in the world to offer lessons of best practice, illustrate common problems, and focus on avoiding mistakes. The conference summed up its key conclusions.

The workshop was held at the same time as the commissioning of two research papers by FIAS on success factors in the establishment of economic zones around the world. The findings of these papers as well as the results of the workshop will be disseminated shortly in a final report to all interested parties.
Introduction by Mr. Dimitris Tsitsiragos, Director, South Asia, IFC
Address by Mr. C.M. Vasudev, Executive Director for India, World Bank
Address by Mr. S.N. Menon, Special Secretary, Ministry of Commerce
 

DAY 1
 

Session I:  Key Note Presentation:  

Global Experience with Economic Zones – A look at global experience of economic zones, both positive and negative 
by Mr. Kishore Rao, Managing Director, Barents Group, Bearing Point

Session II: Lessons From Around The World  

• An overview of key objectives in establishing economic zones, how they have changed over time. 
• Determinants of locational choice including how regional development policy figured in the choice; the rationale for multiple site selection, and how “security” concerns were dealt with.
• The management structure of economic zones, the role of central political support and local political leadership.  How much independence were they given?
• Reforms to national investment policy undertaken for the pilot economic zone experiments in China and elsewhere.
• The costs of setting up the zones, including how the balance of public / private funding emerged over time.  How was adequate infrastructure put in place?
• Overview of the key elements of success in the SEZs at Jebel Ali and China, main achievements and areas in which the experiment failed and why

Panelists:
Mr. James Crittle, South Asia Regional Program Coordinator, FIAS
Mr. Chuck Heath, Director, International Operations, Jebel Ali Free Zone Authority, Dubai
Mr. Binghui Chen, Vice Chairman, Shanghai Pudong New Area Committee
Mr. Carlos Wong, Costa Rica Export Zone

Session III: Regulatory/Legal/Tax Issues in Implementing Economic Zones, Potential Impact of WTO                                           
Panelists:
Mr. Cyril Shroff, Managing Partner, Amarchand Mangaldas
Ms. Hildegunn Nordas, Counsellor, Economic Research and Statistics Division, WTO
Mr. Gokhan Akinci, Senior Investment Policy Officer, FIAS
 

Session IV: Investment Regimes Conducive to Attracting  Foreign and Domestic Investment: International Experience and Lessons Learned
 

• An overview of the key investment-related policies that make economic zones successful, including those which go beyond the national investment regime, and those which ensure autonomy: land policy; financial, monetary and incentive policy; goods exchange, customs and physical barriers; simplified administrative procedures; and labor / immigration policy.
• How to ensure that domestic investors also benefit, and how benefits are spread to the surrounding economy.

Panelists:
Mr. Raj Makoond, Director, Joint Economic Council, Mauritius
Dr. Lilia de Lima, Director General, Philippine Economic Zone Authority
Mr. Shankarnarayan Rao, Chief General Manager, Exim Bank, India

Session V: The Role of Infrastructure in Economic Zones  

• The state of infrastructure as it relates to the requirements of potential “Zone” regions and export-processing activities (e.g. ports).
• How to finance the infrastructural requirements of Zones, in particular the public private mix, and the importance of building upon existing infrastructure.
• The legal and regulatory framework necessary for the successful provision and management of infrastructure.
• Lessons from the country experience: the importance of infrastructure (both inherited and subsequently constructed).

Panelists:
Mr. Weiliang Yu, Deputy Secretary General of Shenzhen Municipality Government
Mr. Jim O'Gara, Vice President, The Services Group
Mr. Halim Salfiti, General Manager, Al –Tajamouat Industrial City, Jordan
Mr. Anish Nanavaty, Specialist Infrastructure, IDFC   
 

DAY 2  Session I: Financing of Economic Zones 
 

• How to successfully obtain financing for the development of a zone from the perspective of a zone operator and financial institution.
• IFC experience/ examples  

Panelists:
Ms. Jingjing Xu, Managing Director, Global Finance Group
Ms. Denise Leonard, Manager, Advisory Services, IFC
Mr. Ravi Parthasarathy, Vice Chairman and MD, IL&FS
 

Session II: A Tenant’s Perspective

• The value of an anchor tenant in the development of an economic zone.
• How to go about attracting an anchor tenant.
• General tenant requirements

Panelists:
Ms. Margaret Waithaka, Manager New Investments, Export Processing Zone Authority, Kenya
Mr. Jinya Chen, President Delphi, China Operations And General Counsel, Delphi Asia Pacific
Mr. Mehrdad Etemad, Senior Technical Advisor,  SEED
Mr. Annisul Huq, President, Bangladesh Garment Manufacturers Association, Dhaka

Session III: Interactive Panel Discussion with Private Sector Economic Zone Promoters/Policy Makers/Users in Bangladesh  
Panelists:
Mr. Motaher Hussain, Director General, Prime Minister’s Office
Brig. General Md. Zakir Hossain, Executive Chairman, Bangladesh Export Processing Zones Authority                                             
Mr. A.N.M Eusuf, Chairman, KEPZ, Youngone Corporation, 
Ms. Rubana Huq, Managing Director, Mohammadi Group, Dhaka
 

Session IV: Interactive Panel Discussion with Private Sector Economic Zone Promoters/Policy Makers/Users in India
 

Panelists:
Mr. D.K. Mittal, Former Joint Secretary, Ministry of Commerce
Mr. Sidharth Kak, Member (Customs), Central Board of Excise & Customs
Mr. Paul Anthony, Development Commissioner, Cochin Special Economic Zone
Mr. Nikhil Gandhi, Chairman, Mahamumbai SEZ
Mr. Arun Nanda, Executive Director, Mahindra and Mahindra
 

Session V: Interactive Panel Discussion with Private Sector Economic Zone Promoters/Policy Makers/Users in Pakistan
 

Panelists:
Mr. Yasin Tahir, Senior Joint Secretary, Ministry of Commerce
Mr. Pervaiz Akhtar Sankhla, General Manager (Investment Promotion), Export Processing Zones, Ministry of Commerce
Mr. Mohsin Syed, Managing Director, Hybrid Technics (Pvt) Ltd, Lahore
Mr. Ahmed Tabba, Chief Executive, Home Furnishing Ltd, Karachi (presented by Mr. Sudhamo Lal, Central Board of Revenue, Pakistan)

Concluding Remarks by Mr. Dimitris Tsitsiragos, Director South Asia, IFC