Case Study about Economic Development and Working Conditions
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, 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.
Over the past five years, EPZs have grown in terms of their number, in terms of the number of countries offering them, in terms of their size and in terms of the scope of industries they comprise. This expansion has occurred in the face of increasing economic and political opposition to EPZs at the global level. The Agreement on Textiles and Clothing ended the global quota system for apparel, which accounts for more EPZ output than any other. This has already resulted in enormous increases in China’s share of global apparel exports, and huge declines in market share in other countries. Keep reading…
