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SEZs can play catalytic role in Asia's economic development: ADB

Xinhua, December 8, 2015 Adjust font size:

Special Economic Zones (SEZs) can facilitate trade, investment, and policy reform in Asia at the time the region is experiencing a slowdown in trade, said Asian Development Bank (ADB) in its latest report on Tuesday.

ADB launched its Asian Economic Integration Report 2015 at Lee Kuan Yew School of Public Policy, National University of Singapore with a panel discussion. The latest report examined current trends in trade, finance, migration, remittances and other economic activities in Asia, with a special chapter on the role of SEZs.

ADB report pointed out that the number of SEZs in an economy is positively related to overall export performance in Asia, it also finds that in developing Asia, countries with SEZs attract significantly more Foreign Direct Investment (FDI), with the existence of SEZs corresponding to 82 percent greater FDI levels.

"The expansion in the number of SEZs from about 500 in 1995 to over 4,300 in 2015 shows the strong and rising interest to this form of policy experiment, though the success record is somewhat mixed," said ADB Chief Economist Shang-Jin Wei.

Moreover, successful SEZs are found to have several common features. ADB said SEZs should be an integral part of national development strategy to enhance their nationwide impact. It also requires the fostering of business enabling environments which encourage firms to move up the industrial value chain and to explore growing opportunities in logistics, information and communications technology, and other areas of high technology, knowledge and innovation.

The ADB report said that Asia has become an important source of outbound investment. Asia's outward FDI increased faster than inward FDI, growing 45.3 percent in 2014 compared with 2010, led by both the region's high income and emerging market economies.

ADB also noted that Asia's trade has slowed faster than world trade, and trade growth has been below economic growth since 2012. Structural factors behind the phenomenon include slower expansion of global value chains and China's growth moderation. Enditem