ABSTRACT
To set the scene and provide a context upon which this volume can be viewed, we underline three important factors. First, during the past three decades, foreign direct investment (FDI) rather
than trade has become the most important vehicle for bringing goods and services to foreign markets and for integrating national production systems (Sauvant 2008: 3). Second, special economic zones (SEZs) have been the most potent
and most successful vehicle for transporting FDI into developing countries and emerging market economies (Graham 2004; Jones et al. 2003; Lall 2000a). Third, global FDI inflows, which were only about US$50 billion during the
early 1980s, reached US$2.09 trillion by the end of 2007 (UNCTAD 2009) but have slowed significantly during the 2008-9 recession (Kedic 2009: 1). However, during the same three decades SEZs have proliferated worldwide, whether as policy incubators or providers of the ideal environment for capitalism and FDI promotion, while only showing signs of becoming somewhat ‘less special’ during the recent recession. China’s FDI inflow experience (Graham 2004; Ota 2003) and emerging
markets such as the Philippines (UNCTAD 2003), Bangladesh and Mexico (Sadni-Jallab and Blanco de Armas 2002), serve as examples to validate the claim that SEZs greatly increase FDI inflows and may help alleviate poverty. However, although both SEZs and FDI inflows are evidenced in developed as well as developing countries, in the past three decades it is developed countries that have accounted for the lion’s share of FDI inflows (UNCTAD 2009), while the proliferation of SEZs has occurred predominantly in developing countries and emerging market economies. Nevertheless, developing countries, especially those in Asia, accounted for some 30 per cent of global FDI inflows in 2006 (ibid.) and, according to the pundits, the Asian SEZs have been the most successful and most prolific (Graham 2004; Ota 2003; World Bank 2008). It is also worth remembering that most of the FDI inflows are in the services sector while agriculture and industrial manufacturing still dominate the economies of most developing countries. In light of these trends, it should be both satisfying and challenging to observe the development of
FDI and modern SEZs and their effect on economic development and poverty alleviation in the new century. The main purpose of this volume is to deconstruct the nature of SEZs
in Asia and examine the ‘specialness’ of their contribution to development in Asia. To this end, the task of this introductory chapter is to explore key definitions that form a backdrop to the contributions in this volume and flag the surprisingly multifaceted nature of the individual contributions.
