Research Coordinator : Khabirov A.

1. SEZ as tool for welfare improvement of country and raising attractiveness for doing business: review of international experience Research Coordinator: Khabirov A.

2. General definition of SEZ Special economic zoneis adefined territory with special economic conditions (customs, tax, financial and administrative incentives for doing business). Types of SEZ: • Free trade zones; • Industrial-production zones; • Innovation zones; • Services zones; • Complex zones.

3. Goals of SEZ creation: international experience Economic goals: • Enhancement and expansion of foreign economic and foreign trade activity • Attraction of foreign and national investments • Promotion of export of industrial products • Increasing of competitiveness of national production and its economic efficiency Social goals: • Creation of new work places and increasing employment • Training and increasing of qualification of employees Scientific and technical goals: • Active using of modern foreign and domestic technologies • Concentration of scientific and technical personnel, including foreign one, for development of priority sectors

4. Classification of SEZ • 26 types of SEZ • Difficulties to categorize • Criteria for classification: - by character of activity or functional purpose(free trade zone, export processing zone, innovative zone, etc); -by level of integration to world or national economy(extroversiveand introversive); - by sectors (zones for development of certain areas, touristic zones, agro-cities, etc); - by ownership (Government-owned, privateand mixed).

5. International experience • Shenon Airport (Ireland):free entrepreneurship zone (1959), thousand work places created, export/year – $1 bln. • Incheon (Korea):export processing zone and techno city «Songdo» (2008), Eurasian regional center;gross investments – $20,7 bln., work places – 4,84 bln. to 2020 • Batamisland (Indonesia):export processing zone, 22 technoparksand 922 TNCs, totalinvestments- $12,5 bln., expected export per year$5,2 bln.

6. International experience (cont’d) • SEZ Hungary:export processing zone and technoparks, production$6 bln., investmentsmore than$10 bln., growth rates of the enterprisesof SEZ– 50%. • "Expo-Business-Chisinau" (Moldova): free trade and export processing zone, investments $7,5 bln. (1998) • changes in incentives and privileges policies left the SEZ without clear prospects

7. Summaries and recommendations • 1. SEZis aneffective tool for entrance to international production and supply chains • 2. It is crucial that intermediary and trade activities do not prevail in SEZ • 3. Comprehensive approach to SEZ creation process and consideration of geostrategic, political and socio-economic conditions in the country are must. • 4. Geographical and socio-economic situation, political stability are the success factors of SEZ

8. Summaries and recommendations(cont’d) • 5. Transparency and competitiveness in establishment of SEZ • 6. The Government should not interfere in realization of investment projects, but create and monitor rules of game in SEZ • 7. SEZ should be created in defined territory with clear borders and customs posts