Abstract:
Modern-day special economic zones (SEZs) originated as a result of an export-oriented industrialization strategy. Many countries established these zones to attract foreign direct investment and to generate employment. These zones have been used as a tool to experiment policies and have played a major role in the development of various economies like China and Philippines. Where there are many successful SEZ many have failed to achieve their objectives. International literature covers a lot of aspects of failure and success of SEZ but no detailed study has been carried out on the EPZ of Pakistan to identify the issues faced by these zones and loopholes in the policy of Pakistan towards SEZs. Pakistan is opening several SEZs at various locations under CPEC- a joint venture between China and Pakistan. This study's aim is to explore and explain the drivers and barriers for the success of special economic zones in the context of Pakistan. A mix method approach is used to understand the drivers and barriers. A questionnaire comprised of drivers and barriers was filled by 68 respondents. The result shows that Incentives, Government Support Mechanism, and Infrastructure are among the top-ranked drivers with poor backward linkages as a major barrier in the success of the SEZs. Further to validate the results of the questionnaire, 21 in-depth interviews were conducted from academicians, industrialists, specialists, and policymakers. Apart from the drivers mentioned in literature and quantitative survey, interviewees presented new dimension of focus on SMEs and Public-Private partnerships. They believe joint ventures between Pakistan and Chinese firms will bring more opportunities for innovation and technology transfer. This study also provided few gaps, such as identifying missing linkages in global value chains and focusing individual SEZs for policymaking may be looked by future researchers. Further, time and resources did not allow researcher to contact more people who were involved in EPZs and might have given a more in-depth insight into the issues faced.
