Introduction Export processing zones (EPZs) are those regulatory spaces in a country aimed at attracting export-oriented companies by offering these companies special concessions on taxes, tariffs and regulations. Some of the typical special incentives offered under EPZs include: exemption from some or all export taxes; exemption from some or all duties on imports of raw materials or intermediate goods; exemption from direct taxes such as profits taxes, municipal and property taxes; exemption from indirect taxes such as VAT on domestic purchases; exemption from national foreign exchange controls; free profit repatriation for foreign companies; provision of streamlined administrative services especially to facilitate import and export; free provision of enhanced physical infrastructure for production, transport and logistics. (Milberg& Amengual 2008)There are other, less transparent features of EPZs that are sometimes used to provide further incentives for firm investment and export. One is a relaxed regulatory environment, including with respect to the enforcement of labour rights and standards (notably the right to unionize), foreign ownership regulations and on the leasing or purchasing of land. Another feature (although not available to all countries simultaneously) is an undervalued currency that renders costs lower (in foreign currency terms) and raises export competitiveness. According Lettice (2003) EPZs can play a crucial role in the economic and social development of a country. Also that EPZs’ success may be greater if they are implemented as part of an overall trade-oriented reform programme aimed at opening up the whole country rather than treating them as enclaves. Comprehensive incentives are required.
Export Processing Zones have objectives such as promoting domestic economic ties, encourage technology transfer and promoting new industrialization strategy. By the definition of export processing zones is not qualified in any form of forward linkages, but backward contacts are not excluded. The objectives of EPZs are different in countries. For example, in the area of Thailand, decentralization of industry from Bangkok for other purposes, to overcome difficulties traffic congestion and pollution. Most of the export processing zones in the labor-intensive light manufacturing, such as the production of garments, light electrical and electronic product assembly. Industry can easily be re-positioned the standardization of production technology low skilled workers. This is called the free flow of manufacturing. Assigned to the role of export processing zones are different, there is a very large country. In Singapore, export processing zones initially as part of a package aimed at attracting to invest in a strategic location, the economy has to import / export regulations.
Countries with economies in transition, such as South Korea, Malaysia and Thailand initiated export processing zone as the part of shift policy from an inward-looking part to export-oriented. In these only towards one of the more effective steps taken on behalf of the National Export Processing Zone inntegration into the world economy. Through the effective integration of the domestic stage of economic development, export processing zones, they are no longer in Korea enclave. Masan, South Korea, has facilitated the development of the surrounding areas. Philippines and Indonesia on behalf of the inward-looking country's Export Processing Zone create distortions, at least in some respects affect the rest of the introduction economy. China's open-door policy initiated and sustained economic reforms Special Economic Zone (SEZ) in 1979. Initially, China to promote investment in carefully selected areas, without promoting their contact the domestic economy. (Kankesu 2003)
The role of EPZs in IMS-GT
In east and southeast Asia, growth triangles1 are…