Chinas first special economic zone world bank documents. While a number of explanations may be offered for east asias economic success, many observers are convinced that an outwardlooking development strategy, particularly a dynamic export sector, has been a. Special economic zones in asian market economies special economic zones sezs have proliferated rapidly during the past decade and are set to multiply in the next embracing not only asia and europe but also special economic zones in asian market economies special economic zones in asian market economies connie carter, andrew harding on. Industrial islands or vehicles for diversification. The east asian experience of economic development and cooperation economic development in east asia has followed a remarkable pattern, unlike any other developing regions in the world. Asian consumers becoming most powerful economic force in. The zone is called special zone for asian headquarters and it has been in operation since 2011. In southeast asia, economic expansion rates have remained robust although the trends by country have somewhat diverged. Dec 08, 2015 while mainstream economic development across asia remains focused on building and maintaining infrastructure, providing better public services, and creating a positive business environment, many countries, including regional heavyweights like india, have returned to the concept of special economic zones sezs as a core element in their. Accumulation versus assimilation the impressive economic performance of many asian economies. The results indicate that export and fdi growth have positive and statistically significant effects on economic growth in these. Located on the mainland, the government of china grants its special economic zones sezs more free market oriented economic policies and flexible governmental measures, compared to the planned economy elsewhere. The analytical framework is that provided by hausmann, rodrik, and velasco 2005. Past, present, and future asian economic growth in historical context let us turn back the clock and reflect on the history of asian economic growth.
May 09, 2017 on the plus side, largerthanexpected fiscal stimulus in the united states or stronger business and consumer confidence in advanced economies could provide a further boost to asias exports and growth. Global experiences with special economic zones with a. To encourage businesses to set up in the zone, financial policies are. The sources of east asian economic growth revisited. Economic integration in northeast asia until the 1990s, the three main countries of northeast asia china, japan, and south koreawere distinguished from most other major trading nations by their nonparticipation in regional economic arrangements. A special economic zone is an area in which the business and trade laws are different from the rest of the country.
The stability of financial markets in emerging economies in general was eroded, but asian stock and foreign exchange markets remained relatively immune chart 2. The indian government continues to focus on growth in the manufacturing sector through investment promotion zones such as sezs. As the government of china opened the economy, it was able to direct the flow of. African leaders launched a continental freetrade zone on sunday that if successful would unite 1. Even advanced economies, including australia and canada could become affected. In 2014, aec was collectively the third largest economy in asia and the seventh largest in the world.
Learn vocabulary, terms, and more with flashcards, games, and other study tools. The regional integrations objective is to create a competitive market of over 600 million people in asean countries. The east asian experience of economic development and. A new look at special economic zones in asia asian. Many nations have relied heavily on their sezs, and are considered to be a vital ingredient in a developing countrys economic strategy. This paper generically uses the term special economic zone to encompass. Haldar 1 assistant professor, department of economics, womens college, agartala, tripura,india 2associate professor, department of economics, jadavpur university, kolkata, india abstract in this paper we estimate the proximate. The asian crisis and the world economy address by alassane d. Western balkan economies underwent a structural shift from consumptionfuelled to investmentbased and exportoriented growth. This section highlights the foundations of asian economic growth at a time when western economies are struggling and points out challenges that have to be tackled by asian economies such as capital market liberalization, inflation and intraregional trade to achieve their full potential. Asian exportled economies such as hong kong and singapore. Focus on asean 10 countries and conduct indepth analysis cover both macroeconomic and structural issues and their interactions monitor the progress towards an asean single market and the impact of integration on growth and stability combine both regional initiatives and country specific. To avoid the usual eclipse of smaller east asian economies, look away for a moment from chinas reformsinduced slower growth and japans monetary blind alleys. Economic integration in northeast asia until the 1990s, the three main countries of northeast asiachina, japan, and south koreawere distinguished from most other major trading nations by their nonparticipation in regional economic arrangements.
The results indicate that export and fdi growth have positive and statistically significant effects on economic. In recent years, the increasingly prosperous east asian economies of japan, hong kong, singapore, korea, and taiwan have been hailed as models of achievement for other emerging economies. Sep 15, 2012 this paper investigates the role of special economic zones sezs in liberalizing the chinese and indian economies and their impact on economic growth. Widespread as this development may be, zone activity is still relatively concentrated, with less than a dozen countries accounting for the majority of zone employment and exports generated.
The journal of asian economics was founded in 1990 by the american committee on asian economic studies acaes as a forum for research on all aspects of the economies of asia. Special economic zones in asian market economies routledge studies in the growth economies of asia volume 65 connie carter, andrew harding on. Economic growth and structural change in south asia. Under the asean economic community aec, a single regional common market of asean countries will be created by 2015. Western balkan economies underwent a structural shift from. The economist offers authoritative insight and opinion on international news, politics, business, finance, science, technology and the connections between them. In a paper entitled common foundations ofeast asian success, peter petri 1997 analyzes different factors that have played a role in the strong economic development of many east asian economies. Economic activities in sezs are primarily driven by market forces and have the following characteristics fias 2008 and npc 2000, regulations on sezs. This paper investigates the role of special economic zones sezs in liberalizing the chinese and indian economies and their impact on economic growth. Association of southeast asian nations asean investment. India has held up in 2018 despite external and domestic headwinds.
While a number of explanations may be offered for east asia s economic success, many observers are convinced that an outwardlooking development strategy, particularly a. Asean is one of the largest economic zones in the world. Special economic zone sez is a specifically delineated dutyfree enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs. Asean has at least 1,600 economic zones of various types. The policy change to a more liberalized economy is identified using sez variables as instrumental variables. A special economic zone sez refers to designated areas in countries with special economic regulations that differ from other areas in the same country. Overall, the resilient private consumption story in. Tianjin economictechnological development area teda. Asian tigers and, more recently, by countries like malaysia, indonesia and china or india. Post1990s east asian economic growth post1990seaegkdidq. A special economic zone sez is an area in which the business and trade laws are different from the rest of the country. The asian economic integration report aeir 2015 was prepared by the regional cooperation and integration division erci of adbs economic research and regional cooperation department ercd, under the overall. Asian economy economist world news, politics, economics.
The first such zones were established in india in 1966, in sri lanka in 1979, and in bangladesh in 1983. China to decide on the creation of these special economic zones is certainly an. Incheon free economic zone, northeast asia economic. Brunei, cambodia, indonesia, laos, malaysia, myanmar, the philippines, singapore, thailand, and vietnam. Chinese, russian, and latin american cases and the use of sezs as an economic development tool tyler curtis, shannon hill, and chih chia lin april 24, 2006 prepared for the international economic development program, ford school of public policy, university of michigan. Sezs attract foreign investment, develop domestic industries and encourage policymaking and reforms. The asian crisis and the world economyaddress by alassane d. Special economic zones sezs have become a popular policy instrument around the world. The truth about tokku special zone japan macro advisors. The journal serves the acaes mission to promote economic research on asia and facilitate engagement between asian economists and their global counterparts.
Special economic zones sezs geographically delimited areas within. States promoting zones have sought to stimulate economic development both within and outside the zone. In this post, we highlight the growth of three particular groups of asian economies since the 1950s. An exclusive economic zone eez is a sea zone prescribed by the 1982 united nations convention on the law of the sea over which a state has special rights regarding the exploration and use of marine resources, including energy production from water and wind. Created after deng xiaoping s economic reforms were implemented in china in 1979, special economic zones are areas where marketdriven capitalist policies are implemented to entice foreign businesses to invest in china. This allows sezs to utilize economic management which is more attractive to foreign and domestic businesses.
The sources of east asian economic growth revisited lawrence j. Had inequality remained stable in asian economies, instead of increasing, growth would have lifted another 240 million people out of poverty between 1990 and 2010. In this paper, we would like to share this experience with the reader, discuss remaining issues, and contribute to the global development strategy debate. Jing ulrich, the managing director and vice chair of the jpmorgan chase asia pacific division, gave her perspective of u. North korean exclusive economic zone flanders marine institute 2019. But now two kinds of special jurisdictions private communities and special economic zones are quietly taking over functions and providing options that traditional polities cannot or will not. Asia is the fastest growing economic region, as well as the largest continental economy by both gdp nominal and ppp in the world. Special economic zones in asian market economies by. Socio economic implications naresh kumar sharma this report of a conference held at the indian institute of advanced study on special economic zones raises doubts about their desirability on different counts. Executive summary an assessment of recent economic growth economic growth in india, pakistan and bangladesh, the three largest economies of south asia, jumped from an average of 5 percent in the 1990s to well above that in 20002008.
Special economic zones are a potentially valuable instrument to facilitate. Travelling to china with a frequency which would be familiar to men like henry paulson, kim jongil stimulated chinese news media to report that north korean special economic zones would indeed create a north korean shenzhen. Ouattara deputy managing director of the international monetary fund at the ministry of finance and planning conference on economic recovery through capital market development. While special economic zones are often treated as an innovative topic in development economics, citywide free zones with goals and methods not too different from those employed in modern zones were in place in gibraltar and singapore as early as 1704 and 1819, respectively. Asia development, financial markets, infrastructure and. Jul 15, 2015 in 2010 and 2011, kim jongil appeared to be making strides toward a more full economic integration with the region of northeast asia.
Pecial economic zones in outh sia harvard university. The east asian experience of economic development and cooperation. Mar 10, 2014 asian economic problems, especially in china, may have a domino effect on other emerging markets that depend on the exports of raw materials for economic growth, such as brazil and argentina. Therefore, the transition towards democracy and a market economy is a unique challenge without any precedent in history. As countries in developing asia adjust to shifting global economic realities, new tools to drive development can appear hard to come by. Fed tightening, rising debt levels and political uncertainty are casting a shadow on the outlook for strong global growth. While mainstream economic development across asia remains focused on building and maintaining infrastructure, providing better public services, and creating a positive business environment, many countries, including regional heavyweights like india, have returned to the concept of special economic zones sezs as a core element in their. Maritime boundaries and exclusive economic zones 200nm, version 11. Marine regions north korean exclusive economic zone eez. In the plan for special zone for asian headquarters, the local government of tokyo already requested a number of deregulation measures such as simplifying the procedure of immigration examination and increasing quota for foreign physician. In order words, sez is a geographical region that has economic laws different from a countrys typical economic laws. The potential of manufacturing and industrialization in africa.
Progress, emerging challenges, and future directions. Despite three decades of research on economic zones, many important questions remain unanswered. As economy grows, north koreas grip on society is tested. Special economic zones in asian market economies routledge. These zones have become an increasingly important element of world trade, contributing further to world capital movement and shipping expansion fias, 2008. Apr 11, 2017 for the last several centuries, nationstates have dominated the political landscape, and set all the rules for everyone inside them. These zones, ranging from free trade zones, export processing zones, it parks to mega special economic zones, have played a significant. China economic relations at a forum of global business leaders and. An economic integration zone for the east african community. Lau and jungsoo park stanford university and the state university of new york at buffalo abstract kim and lau 1994a, 1994a found that the postwar economic growth of the east asian newly industrialized economies nieshong kong, south korea, singapore and taiwanwas mostly the. Since 1979, chinas special economic zones sez have been beckoning foreign investors to do business in china. Special economic zones world bank documents world bank group.
Research on the potential of the asian economic zone. Aradhna aggarwal university of delhi mombert hoppe world bank peter walkenhorst world bank abstract bangladesh, india, and sri lanka have a long tradition of operating export processing zones. Obstacles to economic growth in six pacific island countries ron duncan and haruo nakagawa1 chapter 1 introduction this report presents the results of an investigation into the sources of, and obstacles to, economic growth in the small pacific island economies. While chinas economic growth is gradually slowing, gdp growth in india is expected to remain robust. In particular, special economic zones sezs offer a more investorfriendly business environment and are seen as vehicles to attract foreign investment, create employment opportunities, and introduce advanced technology. Doing special economic zones right international growth centre. The asian tigers competitively captured the export market and undersold japanesemade textiles during the 1960s. Rising inequality can dampen the povertyreduction impact of economic growth, and weaken the basis of growth. Special economic zones sezs geographically delimited areas within which governments facilitate industrial activity through fiscal and regulatory incentives and infrastructure support are widely used across most developing and many developed economies. Reforms, such as productive public investment in infrastructure in asean and south asian economies, could help prolong the positive momentum. East and southeast asian economies, by design or by implementation, present many cases of zones focused on specific industries or on economic activities and value chain components that rely on similar factors of production, skills, technologies and market linkages. Economic outlook for southeast asia, china and india 2019. Similarly, weiss and hobson 1995 remind us that the same respected confucian ethics, to which culturalist theories attribute the success of east asian countries and have also been associated for centuries with stagnant economies.
The economic development path of east asia can be described by dividing the region into groups of countries that have followed similar growth paths. Sezs are located within a countrys national borders, and their aims include increased trade balance, employment, increased investment, job creation and effective administration. Zones are concentrated in asia and the pacific mainly china, latin america, and central and eastern europe and central asia. Oct 29, 2012 as one of the central focuses of the korean governments northeast asia economic centralization strategy, the incheon free economic zone ifez was first nationally designated in august, 2003. It was partly the emergence of these cheaper products, as well as the accumulation of capital, that pushed the japanese government into channeling its industries in a different direction and to leave the textile business in the 1960s. Jan 23, 2018 asian companies are becoming critical to investment in the region as well. In fact, contrary to the prescriptions of free market economists, the east asian model suggests that, especially in the early days of development, governments must sometimes judiciously intervene rather than simply liberalize their economies right away. We have started research activities on the potentials of the asian economic zones since fiscal year 20 because of its importance to consider making good use of the evolving asian economies in terms of thinking about our future growth strategy. Report on the potentials of the asian economic zones. With a focus on china and africa the special economic zones sezs can be an effective instrument to promote industrialization if implemented properly in the right context, as shown in some of the emerging countries, particularly those in east asia. How special economic zones are quietly advancing freedom. Asias dynamic economies continue to lead global growth imf. Casanova 7 iskandar malaysia and malaysias dualistie political economy 124 tey tsun hang. Institutional characteristics of sezs in south asia export processing zones in south asia have a long tradition.