A special economic zone, by definition, is an area within a country's national borders and it is created with special business and trade laws to increase trade, investment, and job creation. The primary reason behind setting up such a zone in a country is its desire to attract foreign direct investment. Free zones have been used for centuries to guarantee free storage and exchange along trade routes.
Modern economic zones appeared from the late 1950s in industrial countries. The first was in Shannon Airport in Clare, Ireland. From the 1970s onward, zones providing labor-intensive manufacturing have been established, starting in Latin America and East Asia. The first in China, following the opening of China in 1979 by Deng Xiaoping, was the Shenzhen Special Economic Zone, which encouraged foreign investment and simultaneously accelerated industrialization in this region. These zones attracted investment from multinational corporations.
The Bangladesh government has decided to set up 100 special economic zones in the country both at the public and private levels to give a boost to its economic growth. The construction of these zones is already underway with a completion target of 2030. The government has already planned to allocate 75,000 acres of land for these zones to expedite Bangladesh’s journey to becoming a developed country by 2041. Once completed, these economic zones are expected to create an estimated 10 million jobs, and produce goods and services worth USD40 billion
In a pure economic sense, the economic zones are supposed to serve as energizers to bring growth and development. The jobs created will have multiplier effects in the economy as additional spending by an additional number of workers will generate additional economic activities. The goods and services produced are also supposed to bring additional foreign exchange for the country. Above all, migration of best practices by foreign companies is going to greatly benefit the working conditions, job skills, and labor efficiency in the country.
If implemented, the economic zones will drive the economy like transmitters help power distribution. But risk comes riding on opportunity. Unless proper laws are in place and their execution is ensured, the complexities arising from too many foreign companies in the country might become hard to handle.
Amongst notable issues could be foreign manipulation of the economy and national interests. Certain companies might even work as proxies for their national intelligence agencies to tinker with Bangladesh’s political and strategic goals. Tax issues could become a serious source of channeling excessive amounts of money out of the country for the right or wrong reasons. Health hazards are also likely as a large number of foreign individuals representing their companies could spread certain diseases through immoral activity.
Besides, the increased level of economic activity might also spur the level of crime in the country. A bigger economy, involving a greater number of financial and social transactions, is bound to have its own challenges. More financial and violent crimes are likely to erupt. More labor unrest cannot be ruled out. More environmental and water pollution are real threats. In some countries the zones have been criticized for being little more than labor camps where workers are denied their fundamental labor rights.
While the economic zones are under construction, the authorities concerned have the time to formulate laws and take necessary preparations to tackle the problems mentioned above. It should be seen that our pursuit of economic success does not disrupt social order and wreak havoc on our lives in such a manner that economic gains are offset by unwanted pains. In other words, we must take all precautions so that the fruits of this ambitious initiative will not leave us worse off.