Economic Zones

How Many Special Economic Zones are There?

Estimating the number of SEZs in existence worldwide is a nearly impossible task due to the diversity of definitions and poor data. Despite that, several organizations have attempted to make global maps counting the total number of SEZs in existence.
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June 30, 2020

Introduction


Everyone seems to have the same question about Special Economic Zones (SEZs):

“How many SEZs are there in the world?”

The simple answer is 5,383. Or 10,000. Or 2,700.

The long answer is that it depends who you ask.


Estimates of the Number of SEZs Worldwide


Many different organizations have attempted to create a comprehensive global map and / or database of every existing SEZs. No two databases look alike.

The Startup Societies Foundation has created a free online interactive global SEZ map which you can find here.

Here are some different estimates produced by different organizations at different times attempting to count the number of SEZs worldwide.

Dr. Singa Boyenge via the International Labor Organization (2007): 3,500

World Bank Foreign Investment Advisory Service (2008): 3,000

International Labor Organization (2009): 2,700

Martin Norman via the World Bank Blog (2014): 3,500

Oliver Wyman (2015): 4,300

Brazilian Ministry of the Economy via Reuters (2016): 3,000

FEMOZA - World Free and Special Economic Zones Federation (2017): 1,800

Dr. Tom W. Bell (2017): 4,000 to 10,000

UNCTAD (2018): 5,383

Startup Societies Foundation (2019): 2,149

Other industry organizations such as the World's Free and Economic Zones Federation (FEMOZA) and World Free Zones Organization have their own proprietary world SEZ databases. The databases maintained by these organizations vary widely when compared to publicly available databases, as well as with each other.


Explaining the Discrepancies


Creating a comprehensive list of SEZs around the world might seem like a tedious, albeit technically simple task. In reality, doing so is nearly impossible.

Organizations attempting to create comprehensive SEZ maps and databases must decide whether or not they want to limit themselves to projects explicitly calling themselves “Special Economic Zones.” Doing so excludes many SEZ projects that go by other names. Using broader searches brings up the dilemma of whether or not they should include industrial parks, enterprise zones, foreign trade zones, free trade zones, export processing zones, private cities, development zones, freeports, and the wide variety of other names used in the industry.

There are also many unusual and exotic SEZs. Should single factory export processing zones be counted? What about airports located inside free trade zones? What about business parks with tax incentives but no customs regimes? What about the autonomous areas of native peoples? What about areas with special VISA regimes such as the island of Svalbard in Norway?

Governments vary widely in terms of how they report data. Some governments have standard definitions of SEZs or similar economic zone programs; others do not and zones instead exist in a legally ambiguous area. Furthermore, many governments are unresponsive to scholars studying the subject. Some governments designate zones. Others allow private industries to apply to turn their facilities into SEZs. 

Online research and data mining is also difficult. Many real functioning SEZs with tenants do not have websites and do not appear on Google maps. Conversely, many SEZs which appear online are in reality empty business parks.

The number is constantly in flux. Zones are planned, launched, cancelled, redefined, and phased out. Industry preferences also change over time. In the 1980s, export processing zones were in vogue. In the 2000s, the industry had shifted towards technology parks. Now, the most publicized projects are full fledged charter cities.


Definition Problems


There is no commonly agreed upon definition for an SEZ, and using different definitions means that the results of any surveys vary greatly.

The 2008 World Bank Foreign Investor Advisory Service report on SEZs is one of the most authoritative sources, and uses the following definition:

Special Economic Zones must have the following characteristics:

-A geographically delimited area, usually physically secured (fenced-in)

-A single management / administration organization 

-Tenants eligible for fiscal and regulatory benefits based upon their physical location within the zone

-A separate customs area (with duty-free benefits) and streamlined import / export procedures

Another authoritative source, the United Nations Conference on Trade and Development’s 2019 World Investment Report, offers a different definition:

“Geographically delimited areas within which governments facilitate industrial activity through fiscal and regulatory incentives and infrastructure support.”

The broader UNCTAD definition would include a charter city project with tax and regulatory incentives but no special customs regime, while the World Bank definition would not.

Differing Methods


The methods used to create zone databases vary widely.

Many organizations like the World Bank’s FIAS partner with industry organizations to come up with their numbers. To obtain the figure of 3,000 SEZs worldwide for their 2008 report, they partnered with WEPZA to create their own proprietary database.

Other organizations, like the Startup Societies Foundation, used open source internet intelligence which produced more accurate data than the other methods, but produced a smaller incomplete set of SEZs.

Yet others simply reconcile the various statistics to create approximations of their own.


Conclusion


Creating a comprehensive map or database of SEZs is extremely difficult. This does not mean that the task is pointless and wasteful. Instead, it simply means that most SEZ statistics must be understood as approximations rather than facts.

So how many Special Economic Zones are there worldwide?

Nobody knows for sure.


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