A comparison between export processing zones and industrial development zones with special reference to Walvis Bay and Coega

Hunt, Robin (2005-03)

Theses (MBA)--Stellenbosch University, 2005.

Thesis

ENGLISH ABSTRACT: In order to survive in a global economy, developing nations can no longer rely on their own resources if they wish to prosper, they require outside assistance. Various economic policies and strategies have been adopted over the years in order to encourage foreign capital to contribute to the growth of developing nations. One of the most common of these is the concept of an export promotion zone. This is a dedicated area inside the host country where the host tries to lure foreign investors - usually by providing a range of financial and labour concessions. Namibia instituted an export promotion zone in the mid nineties in Walvis Bay but has met with limited success, as indeed have many of the other countries which have tried this approach. Namibia's immediate neighbour - South Africa - reviewed this and other economic zones with the intent of adopting a policy better suited to the needs of foreign capital. The result was the development of an industrial development zone in Coega outside Port Elizabeth. This study contrasts these two concepts in order to ascertain similarities and differences both in terms of their respective legislation and in terms of the World Association of Investment Promotion Agencies ten criteria for a successful investment environment. The conclusion was that these two policy frameworks are different more in name than in substance, with one crucial exception: South Africa has effectively waived most of the tax concessions generally found in this type of area. It is argued that if the South Africa concept does succeed it will probably be more a function of the country's relative economic size in Africa rather than because of policy differences. Beyond that there is little reason to believe that South Africa will meet with any more success than Namibia barring the acquisition of a major anchor tenant to draw other affiliate industries.

AFRIKAANSE OPSOMMING: Ontwikkelende lande het buitelandse bystand nodig om in 'n wêreld ekonomie te bestaan omdat hulle nie meer op hulle eie reserwe bronne kan staat maak nie. Verskeie strategieë en ekonomiese beleidstoepassings is in die verlede aangewend om buitelandse beleggings te lok ten einde by te dra tot die groei van ontwikkelende nasies. 'n Algemene strategie is die daarstelling van 'n uitvoersone waardeur die land probeer om buitelandse beleggers te lok deur die daarstelling van 'n reeks finansiële- en arbeidstoegewings. Namibië het so 'n uitvoersone in die middel negentigs in Walvis Baai tot stand gebring, met min sukses. Verskeie ander lande het ook nie bevredigende resultate met hierdie metode gehad nie. Suid-Afrika, 'n direkte buurland van Namibië, het hierdie ekonomiese sone en soortgelyke implementerings ondersoek met die doel om die beleid aan te pas en te verbeter om sodoende meer buitelandse kapitaal te lok. Die resultaat was die ontwikkeling en totstandkoming van die industriële ontwikkelingsarea in Coega buite Port Elizabeth. In hierdie studie word die twee konsepte met mekaar vergelyk ten einde die ooreenkomste en verskille uit te lig, beide in terme van wetgewing asook in terme van die Wereld Assosiasie van Bellegingsbevorderings Agentskappe se tien kriterieë vir 'n suksesvolle beleggingsomgewing. Die gevolgtrekking was dat die twee beleidsraamwerke baie min verskil, met die uitsondering dat daar min of geen belasting toegewings gemaak word ten opsigte van implementering van hierdie sones in Suid-Afrika nie. Daar word aangevoer dat indien die Suid-Afrikaanse konsep suksesvol is, dit meer waarskyknlik die gevolg sal wees van die land se relatiewe ekonomiese stand in Afrika, as die gevolg van beleidstoepassing. Behalwe hierdie faktor is daar min rede om te glo dat Suid-Afrika meer suksesvol sal wees as Namibië, tensy 'n industrie gevestig kan word wat as hoeksteen van die ontwikkeling kan dien, wat om die beurt ander verwante industrieë kan lok en ontwikkel.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/50240
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