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Special Economic Zones in Africa
Box 2.1
Colon Free Zone, Panama On the Atlantic side of the Panama Canal, the Colon Free Zone occupies an area of 400 hectares. At the nexus of Central, North, and South America and the Caribbean, linking the U.S. eastern and western seaboards, it was opened in 1948 to capitalize on canal traffic and the trade opportunities it presented. The zone offers a liberal trading environment, permitting logistics and trading activities, both wholesale and retail. Its initial focus was trade with South America, but the economic liberalization and greater regional integration of South America has turned Colon into a prominent regional multimodal logistics platform (maritime, rail, air, and road) and trade center. The zone is visited every year by more than 250,000 people, hosts 2,000 enterprises, employs more than 15,000 persons, and imports and exports over $US10 billion of commodities annually. The zone is owned by the state and operated by a semi-autonomous parastatal. Source: http://www.colonfreezone.com, accessed in May 2010.
The honor of being the first EPZ is usually given to the Shannon Free Zone in Ireland, created in 1958. Shannon provided the basic “grammar� for EPZs, which was replicated across a vast swath of the developing world in the subsequent decades: a fenced-in territory of several hectares offering developed industrial land for rent/lease, situated outside the country’s custom territory, benefiting from investment and operational incentives, and supported by simplified administrative procedures. EPZ activities were initially focused exclusively on export markets; investment was restricted to foreign capital; and activities were limited to manufacturing. EPZs have evolved dramatically since the 1990s, and the types of activities permitted have expanded significantly. 3. Free enterprises (FEs) or single factory/single unit free zones: This is a variation on the FZ/EPZ in which individual enterprises are provided with FZ/EPZ status and allowed to locate anywhere on the national territory or in a designated part of the territory (see Box 2.3). In some countries, FEs and FZs/EPZs coexist. The U.S. Foreign Trade Zone system provides certain enterprises with a free trade zone (FTZ) status called subzone. This status applies to existing enterprises that wish to have the benefits of the FTZ system but whose relocation costs would be too high or to new enterprises that have a compelling reason not to