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Prof. Peter Muchlinsky Special Economic Zones: A Policy Tool in Search of a New Agenda?
The Special Economic Zone (SEZ) represents a specialised form of investment
incentive regime that has played a significant role in the evolution of
globalised production by multinational enterprises (MNEs). The basic concept
is that of a "dual legal order" which separates a specialised policy enclave
from the rest of the jurisdiction in which the zone is located.[1] It is the
purpose of this paper, first, to consider the nature and origins of the SEZ
concept in section 1 and, secondly, to examine the possible future impact of
the concept on economic and social development. At the economic level the
general trend towards trade and investment liberalisation, and the
introduction, since 1995, of WTO disciplines prohibiting export trade
subsidies, has placed the use of SEZs under increased regulatory strain. In
such an environment, what further use does the SEZ concept have? In
addition, as regards social development, how far can the SEZ concept be used
to lower social standards? Or can it be a vehicle for the protection of
such standards?
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