October 22, 2021
Introduction
Special Economic Zones (SEZs) in their various forms are growing globally, particularly in developing countries. According to UNCTAD estimates, there are over 5,000 SEZs in the world, over 90 percent of which are in developing countries. As many first generation areas often pursue an investment attraction strategy focused on low wages and lax working conditions, SEZs have been criticised for failing to meet adequate social and environmental standards. Recent UNCTAD research presents the economic case for a ‘role reversal’, shifting from a narrow focus on cost benefits to becoming champions of sustainability.
In this context, UNCTAD recently presented the SDG Model Area Framework which functions as a menu of options to orient SEZs towards the 2030 Agenda for Sustainable Development, with the key objective of ensuring that SEZs work for the SDGs.
Session Highlights
The session mainly concentrated on a paradigm shift of the SEZs, from privileged enclaves to widespread benefits. In terms of achieving the 2050 agenda, the world is now placed in a more difficult position due to the on-going pandemic. The progress towards SDGs especially in developing countries has been wiped out and the recovery from this crisis seems uneven. The practice of Eco Industrial Parks (EIP) emerged from the session. An EIP is different from normal SEZs. These are:
- Environmentally sustainable,
- Socially responsible, and
- Economically viable
Global Eco Industrial Parks Programme (GEIPP) can be an effective solution to meet up the target of SDGs. The Panellists mentioned that a synergy must be formed not only between the companies within the free zone but also with the local communities. They emphasised on employment creation, reduction of fossil fuel use and Greenhouse Gases (GHG) emission, encouraging entrepreneurship, quality job and gender equalisation. CSR activities should also be given importance in every free zone. Two kinds of agro-Industrial parks were also discussed in the session. One is having textile and leather industries which are labour intensive, having good scope of job creation for young people. The other one is food parks which require a large processing area and are able to attract huge investments from developed countries.
The session focused on maintaining the ecology within the SEZs, by reusing and recycling products, proper waste management. Water treatment, integration of green vehicles, and the use of renewable energy should be prioritised. E-learning facilities and standardisation of developing an EIP also came up in the discussion for maintaining the international framework. The importance of international partnership was highlighted in the session for knowledge sharing and for investments too. The Panellists also emphasised on the attitude of going beyond the compliance target to achieve a bigger outcome. Dubai Multi Commodities Centre (DMCC), by the Mauritius free port in Dubai won the fDi Markets Global Free Zone of the Year Award.
Opening
- Mr. James X. Zhan, Director, Division on Investment and Enterprise, UNCTAD
On the panel were:
- Ms.NilgünTas, Deputy Director of the Department of Environment, UNIDO
- Mr. Samir Hamrouni,Chief Executive Officer, World Free Zones Organisation
- Mr. Bernd Oellermann, Director of Regional Industrial Development at the South African Ministry of Trade, Industry and Competition
- Mr. Douglas ZhihuaZeng, Senior Economist, World Bank
- Mr. Ahmed Bennis, Secretary General, Africa Economic Zones Organisation
- Mr. Gustavo González de Vega, President, Asociación de Zonas Francas de las Américas
- Mr.DejeneTezera, Director Department of Agribusiness, UNIDO
- Mr. İsmail Erşahin, Executive Director, World Association of Investment Promotion Agencies (WAIPA)
- Dr. Amelia U. Santos-Paulino, Chief of Investment Issues Section, Investment and Enterprise, UNCTAD, fDi Markets Global Free Zone of the Year Award
Judges for the award
- Mr. Richard Bolwijn, Head of Investment Research, Division on Investment and Enterprise, UNCTAD
- Mr. Alex Irwin-Hunt, Global Markets Editor and co-host of Rising Ecosystems Podcast, fDi Intelligence
- Mr. Tony Restall, President & CEO, DSI Group Holdings, Free Zones & Economic Development
- Mr. R. Preston Martin, Co-Founder and CEO, Adrianople Group
Moderator
- Mr. Jacopo Dettoni, Editor, fDi Intelligence, FT Specialist