A Comparative Analysis on Special Economic Zones: The Case of Korea and Tanzania

Abstract

Special Economic Zones (SEZs) are taken to be the second-best solution that triggers rapid economic growth and development. They have emerged as a popular strategy adopted by various countries, particularly developing countries, to increase trade competitiveness. SEZs are also believed to attract huge foreign investment (FDI), domestic investment, generate employments, promote export activities and transfer technology. Through the establishment of economic zones, South Korea’s export activities, industrial sectors and economy in general grew at a very fast rate. This paper evaluates strategies and policies that were used in establishment of the economic zones in South Korea. The paper also analyzes the initial conditions that were present before and after the establishment of these zones. The study traces the historical background of Korea’s Masan FTZ (1970-2011) and Tanzania’s Benjamin William Mkapa SEZ (2006-20011). A comparative case study is employed to analyze the initial conditions in both countries and subsequently draw lessons that may be applied to develop Tanzanian’s SEZs. The role of SEZs is unsustainable; however the benefits derived from it are not worthy to be disregarded