A Special Economic Zone (SEZ) is a geographically delineated area subject to differentiated regulation and administration from the host country in which it resides, for the purpose of attracting foreign direct investment in economic activity that could not otherwise be achieved.
SEZs have evolved from a relatively simple proposition to an increasingly diverse range of propositions, designed to achieve more specific development objectives. SEZs play varied roles in facilitating national, regional and local economic development and global economic connections, with some remarkably successful in doing so.
There are those however, that are failing to achieve even a fraction of their intended objectives. The sheer number of SEZs, and their uneven success raises two critical questions that this report shall address:
Are SEZs still relevant and effective as a development strategy in this crowded and connected global marketplace? What is required for a SEZ to succeed in such shifting national and global economic conditions?
Saudi Arabia has embarked on an ambitious reform agenda, which is termed as Vision 2030 . The reform agenda aims to transform its economy and society in the coming decade and the program encompasses a broad range of changes: fiscal reform, human capital reforms, and a restructuring of the economy. Vision 2030 also includes improved structural reform, transparency, and a package of economic and social policies.
Saudi Arabia needs to come up with a plan to reduce the dependence on oil and the Government has to act now to diversify its economy and increase revenues. One key option is to privatize state-owned enterprises (SOEs).As it happens, Privatization is a critical aspect of Vision 2030, as well as its National Transformation Policy (NTP) 2020. The program is a response to both medium- and long-term challenges faced by the Kingdom: a rapidly growing population, with high youth unemployment and a reliance on government spending.
For privatization to succeed in Saudi Arabia, it needs to be done right and done well. Our report elaborates on the four key points to consider:
The 2014 slump in oil prices had a significant impact on the finances of Gulf governments; who have in the years since, implemented plans to curb fiscal deficits and diversify economies, most notably through the development of national infrastructure.
These efforts have included a string of Public Private Partnership (PPP) projects going live with regained private sector attention. Without private sector contribution, regional ambitions may well prove unattainable. While Gulf nations have recognised the importance of PPPs, and have laid the foundation for harnessing PPP potential – notably through the establishment of dedicated PPP laws and/or units – the benefits from such efforts may prove short-lived if fundamental challenges in areas such as political consistency, legislation, regulation and communications are not addressed.
Our report takes a look at, how PPP initiatives should continue to focus on the prerequisites for success to avoid becoming short-lived or costly, or both.