What are Free Economic Zones?
Economic Zones (FEZ) are geographic zones established outside the customs territory of a particular country, where products can be manufactured, stored, processed without the payment of import duties, and with the intention of exporting most of the output. Simply put, the regulations on these zones tend to contain measures that are conducive to foreign direct investment.
Why Free Economic Zones?
A Free Economic Zone (FEZ) is the preferred model for optimal
operations between the public and private sectors. The development, operations, and master planning of the FEZ are vested with the private sector. This includes investment in the core real estate, services infrastructure, construction, management, promotion, etc.
Responsibilities that the private sector cannot or should not provide are vested with the government. Examples of these responsibilities include strategy, policy formulation,registration, regulation, enforcement, and the provision of key public goods.
An FEZ allows companies to streamline operations at a minimal cost, which offers the potential for a larger profit margin. Since the 1990s, the cooperation of the public and private sector has become the preferred institutional model for successful Special Economic Zone (SEZ) programs. The development and operation of the SEZ master planning, investment in the core real estate and services infrastructure, construction, management,
promotion, etc. are vested with the private sector.