The potential for export processing zones: lessons from East Asia

Abstract

The experience of East and Southeast Asia confirms that the role of export processing zones in promoting manufactured exports is at best minor; the effective means of promoting exports is to ensure that the economic policy environment within the country is conducive to efficient production for export. This paper reviews the features of government policy most likely to contribute to export promotion. The potential for export processing zones in the Pacific Island countries are unlikely to be able to attract internationally mobile, labour-intensive manufacturing firms to invest in the zones unless these firms are heavily subsidised and/or given access to highly protected domestic markets. Either of these outcomes would be undesirable. Show more