Flip Side to the The Not-So-Special-Anymore Economic Zones??
A nicely written article on Frontline
summarizing the issues on the great SEZ (Special Economic Zones) debate...mostly from the opposition side. Addresses the issues of revenue loss due to these "duty free enclaves" to the government, the ill effects on the poor and the negative impact on the environment.
To be noted are the following paragraphs that struck me the most:
As much as 75 per cent of the SEZ area can be used for non-core activities, including development of residential or commercial properties, shopping malls and hospitals. Developers will surely use this to make money via the real estate route rather through export promotion. This represents a potentially humongous urban property racket of incalculable dimensions. India will see a multiplication of "Gurgaon-style" development, under the aegis of big builders such as DLF, Marathon, Rahejas, Unitech, City Parks and Dewan.
Neither the international nor the Indian experience with SEZs has been particularly happy. Globally, only a handful of SEZs, of the hundreds that exist, have generated substantial exports, along with significant domestic spin-offs in demand or technology upgradation. For each successful Shannon (Ireland) or Shenzhen (China), there are 10 failures - in the Philippines, Malaysia, Brazil, Mexico, Colombia, Sri Lanka, Bangladesh, why, even India. A 1998 report by the Comptroller and Auditor General (CAG) on export processing zones (EPZs) says: "Customs duty amounting to Rs. 7,500 crores was forgone for achieving net foreign exchange earning of Rs.4,700 crores... ."
Also of concern is the following:
The SEZs will also be socially retrograde. No labour laws will apply to them. Workers will enjoy no freedoms and no rights, including the fundamental right of association and peaceful protest.SEZs will be exempt from environmental impact assessment. They will be under no obligation to employ local people or share profits with them.