WHAT ARE EPZs?

 EPZs are literally :

• industrial zones with special incentives to attract foreign investors
• in which imported materials undergo some degree of processing
• before being exported again.

EPZs have been around for a long time - the Barcelona zone has been highly successful since the early 1900's, and Shannon in Ireland since the late 1950's - but the big boom came in the 1970's and has continued to the present. There are some 2000 zones in the world employing about 27 million people. EPZ policy and practice has evolved considerably however and today the name is no longer an apt description of the strategy. Some of the more significant developments have been:

• attempts by countries to move beyond simple processing activities and to upgrade their zones by encouraging integrated manufacturing using domestic as well as foreign investment;
• countries developing specialised zones such as high-tech or science parks;
• the incentives used to attract investors are often no longer confined to a specific zone or enclave and the entire country, a province or city may qualify as a zone;
• countries may use free trade zones, bonded warehouses and free ports to achieve similar results to an EPZ.

In order to cover all these variations the ILO Special Action Programme on EPZs takes as a working definition of an EPZ any situation in which an incentive is offered to investors, and that investment is primarily for export.