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Davies invites comment on economic zones

Jan 16 2012 16:30 Sapa

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Pretoria - The draft special economic zones bill, which aims to improve the concept of industrial development zones, is open for public comment, Trade and Industry Minister Rob Davies said on Monday.

"The special economic zones (SEZ) programme is one of the most critical instruments that can be used to advance government's strategic objectives of industrialisation, regional development and job creation," Davies told reporters in Pretoria.

The bill aims to improve on the industrial development zones (IDZ) programme introduced in 2000.

The IDZ programme led to the establishment of four zones: Coega outside Port Elizabeth, East London, Richards Bay and OR Tambo International Airport, which was not yet operational.

A review in 2007 found a number of problems with the IDZs.

Davies said these included a design structure that favoured only a few regions, ad hoc planning, inadequate coordination between government agencies, and inadequate financing arrangements which made long-term planning tricky.

"The special economic zones policy and bill were motivated by the need to urgently address (these) challenges within the broader framework of accelerating industrial development, economic growth and job creation," Davies said.

The SEZ policy will allow for the designation of different types of economic zones. At the moment, the IDZs are export-orientated and therefore found near ports and airports.

However, SEZs would not necessarily have to be export-orientated and could be based anywhere. Davies said SEZs allow for a broader range of activities, such as science and technology parks.

To resolve the problem of ad hoc funding, the bill proposes setting up an SEZ fund which would finance feasibility studies as well as offer incentives. The bill seeks to set out more clearly an approach to governance and planning for economic development zones, Davies said.

It also aims to cut red tape. The existing IDZs would be catered for under the new legislation. Davies said his department intends tabling the bill this year and to have it passed by parliament by the end of the year.
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