ABSTRACT
The special economic zone (SEZ) represents a specialized form of investment incentive regime that has played a significant role in the evolution of globalized production by multinational enterprises (MNEs). The basic concept is that of a ‘dual legal order’ which separates a specialized policy enclave from the rest of the jurisdiction in which the zone is located (Likosky 2005a: ch. 4). It is the purpose of this chapter, first, to consider the nature and origins of the SEZ concept in the first section and, second, 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 liberalization, 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? These questions will be addressed in the second section of the paper.
