economic
zones STIMULATING DEVELOPMENT
URBAN ECONOMICS: IN THE ZONE
You can’t force economic prosperity and relevance on a locality, or turn a once-underdeveloped area into a thriving commercial hub over night. But careful planning and design could act as a catalyst for change.
In October 2010, the Associated Chamber of Commerce and Industry of India (Assocham) submitted a paper on the growth strategy for Uttar Pradesh to the state’s chief minister. It predicted that, by using so-called special economic zones (SEZs) to support sectors with export potential, it could increase gross state domestic product (GSDP) by 64 per cent by 2020. It’s a bold claim but one that is backed up by the short yet successful history of the use of SEZs to stimulate economic development. Pioneered in India in the 1960s and then further developed in China under Deng’s government in the 1980s, SEZs saw huge tracts of undeveloped land earmarked and ring-fenced for industrial use. Infrastructure was built, thousands of rural dwellers moved in to provide labour and special incentives were created to attract as much inward investment as possible. Shenzen in China was the first globally recognised major economic zone. Some measure of its success comes from the fact that it went from a fishing village on the Guangdong coast to an industrial city of nine million people in less than 30 years, purely on the back of planned investment in chemical and electronic production. It now boasts eight provinces, an industrial and software park, and even has its own stock exchange. According to Robert Zoellick, president of the World
Bank, SEZs played a key role in China’s move from a poor agrarian economy to one of the world’s largest manufacturing centres. “Special economic zones were a test-bed for economic reforms, for attracting foreign direct investment, for catalysing development of industrial
clusters, and for attracting new technologies and adopting new management practices,” he said in September 2010. “Even though their importance has diminished over time, a recent World Bank study estimates that, as of 2007, SEZs still accounted for about 22 per cent of national GDP, about 46 per cent of FDI and about 60 per cent of exports – and generated in excess of 30 million jobs.” Celebrating its 30th anniversary this year, President Hu
Jintao hailed the success of Shenzhen as a “miracle in the world’s history of industrialisation, urbanisation and modernisation,” adding that it had “contributed significantly to China’s opening up and reform”. The president urged future SEZs to be bold in reform and innovation in their roles as the “first movers”. He was right to encourage new thinking. Times have changed and the centrally planned zones dedicated to industry have evolved to a new type of economic zoning. “It used to be mono-functional and focused on one type
of industry,” says Roger Savage, associate director with Atkins. “The Chinese experiment essentially involved putting together a package of incentives to encourage inward investment and letting it develop along a single track.” But the lessons learned in some early Chinese zones – with inflexible infrastructure, minimal social amenities and pollution issues – have prompted planners to adjust. “Planners have realised that they need to develop services and communities to support these zones, and that means they need to be more integrated in the range of amenities and activities they offer residents, with more attention paid to the quality of the environment,” says Savage.
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