Consortium for Economic Policy Research and Advice WCER Canadian Association Institute Working Academy International of Universities for the Economy Center of National Development and Colleges in Transition for Economic Economy Agency of Canada Reform Special Economic Zones Moscow IET 2007 UDC 332.122 BBC 65.046.11 S78 Special Economic Zones / Consortium for Economic Policy Research and Advice – Moscow : IET, 2007. – 247 p. : il. – ISBN 9785932552070 Agency CIP RSL Authors: Prihodko S., Volovik N., Hecht A., Sharpe B., Mandres M. Translated from the Russian by Todorov L. Page setting: Yudichev V. The work is concerned with free economic zones classification and basic principles of operation. Foreign experience of free economic zones creation is regarded. Considerable attention is paid to the his tory of free economic zones organization in Russia. The main causes of failures of their implementation are analyzed. At present the work on creation of special economic zones of main types – industrial and production, innovation and technological, tourist and recreation has started in Russia. The main part of the work is devoted to Canadian experience of regional development. JEL Classification: R0, R1. The research and the publication were undertaken in the framework of CEPRA (Consortium for Economic Policy Re search and Advice) project funded by the Canadian Agency for International Development (CIDA). UDC 332.122 BBC 65.046.11 ISBN 9785932552070 5, Gazetny per., Moscow, 125993 Russia Tel. (495) 6296736, Fax (495) 2038816 [email protected], http://www.iet.ru Table of Contents I. Regional Development in Canada..........................................7 1. An Introduction to Regional Development in Canada................7 2. Canadian Regional Development Programs, Surrogate SEZs .......................................................................7 3. Bibliography ...................................................................... 10 II. Northern Ontario’s Surrogate Special Economic Zone (SEZ), FedNor ................................................................ 13 1. Introduction ....................................................................... 13 2. Governance ....................................................................... 14 3. Regional Programs............................................................. 16 4. Focus of Help..................................................................... 18 5. Financial Sources and Distribution ....................................... 19 6. Indications of Success and Trends Emphasis........................ 20 7. Bibliography ...................................................................... 23 III. Atlantic Canada’s Surrogate SEZ Programs, ACOA........... 25 1. Introduction ....................................................................... 25 2. Governance ....................................................................... 27 3. Structure of Regional Programs........................................... 27 4. Horizontal Initiatives............................................................ 33 5. Focus of Help..................................................................... 35 6. Financial Sources and Distribution ....................................... 36 7. Indications of Success and Trends of Emphasis .................... 40 8. Bibliography ...................................................................... 43 IV. Enterprise Cape Breton Corporation, a Surrogate SEZ Support Entity ................................................................. 46 1. Introduction ....................................................................... 46 2. Governance ....................................................................... 47 3. Structure of Regional Programs........................................... 47 4. Focus of Help..................................................................... 49 5. Financial Sources and Distribution ....................................... 49 6. Indications of Success and Trends of Emphasis .................... 49 7. Bibliography ...................................................................... 51 V. Quebec’s Surrogate SEZ Regional Development Zones, CEDQR ...................................................................... 53 1. Introduction ....................................................................... 53 2. Mandate............................................................................ 54 3. Governance ....................................................................... 55 4. Regions of Quebec............................................................. 57 5. Structure of Regional Programs........................................... 60 6. Horizontal Initiatives............................................................ 64 7. Focus of Help..................................................................... 64 8. Financial Sources and Distributions ..................................... 66 9. Indications of Success and Trends of Emphasis .................... 67 10. Bibliography..................................................................... 72 VI. Western Canada’s Surrogate SEZ Regional Development Zones, WD ........................................................ 75 1. Introduction ....................................................................... 75 2. The British ColumbiaAlberta Trade, Investment, and Labour Mobility Agreement............................................... 76 3. Western Economic Diversification Canada (WD) .................... 78 4. Mandate............................................................................ 78 5. Governance ....................................................................... 79 6. Structure of Regional Programs........................................... 80 7. Focus of Help..................................................................... 83 8. Financial Sources and Distributions ..................................... 84 9. Indications of Success and Trends of Emphasis .................... 85 10. Bibliography..................................................................... 90 VII. U. S. ForeignTrade Zones, Surrogate SEZs .................... 92 1. Introduction ....................................................................... 92 2. Governance ....................................................................... 93 3. Regional Distribution .......................................................... 94 4. Focus and Advantages........................................................ 94 5. Financial Sources and Industrial Sector Distribution .............. 96 6. Indications of Success and Trends of Emphasis .................... 96 7. Bibliography ...................................................................... 97 VIII. Export Processing Zones in Latin America and the Caribbean .................................................................. 99 1. Introduction ....................................................................... 99 2. Establishment .................................................................. 101 3. Legislation ....................................................................... 104 4. Incentives ........................................................................ 104 5. PublicPrivate Partnerships ............................................... 106 6. Relevant Policy Recommendations .................................... 106 7. Bibliography .................................................................... 113 IX. International Experiences of Creation and Functioning of SEZ......................................................... 118 1. Western Europe................................................................ 118 2. Japan .............................................................................. 121 3. SEZ in China .................................................................... 127 4. SEZ in Hungary ................................................................ 130 5. The Portuguese SEZs ....................................................... 134 6. SEZs in Turkey ................................................................. 136 7. SEZs in the Philippines...................................................... 139 8. SEZ in Egypt .................................................................... 142 9. SEZs in India .................................................................... 144 10. SEZs in Iran.................................................................... 146 X. The Background of the Rise of SEZs in Russia ................. 150 XI. Export Processing Zones: Definitions, Concepts, and Typology....................................................... 160 1. Introduction ..................................................................... 160 2. Export Processing Zones (EPZs)........................................ 162 3. Free Trade Zones (FTZs)................................................... 166 4. Special Economic Zones (SEZs) ........................................ 166 5. Maquiladoras................................................................... 167 6. EPZ Typology................................................................... 168 7. EPZ Distribution ............................................................... 169 8. Bibliography .................................................................... 171 Annex 1: Summary of ACOA’s Program Activities .................... 175 XII. Contemporary State and Challenges Facing Development of Special Economic