Special Economic Zones are the shopping malls of the nation state

By George ELIOT 

Shopping malls in a city and the Special Economics Zones (SEZ) in a country are two sides of the same coin:

Shopping malls are seen as attractive for both businesses and customers because of a range of factors:
A) Malls are bustling hubs of economic activity, as agglomeration effects draw in both tenants and customers in large numbers. This helps ensure that a buyer can find what they are looking for.
B) Being centrally-managed, malls provide favourable and consistent conditions for doing business (as opposed to chaotic market places, high streets with variable quality of shops and service, and seasonal fairs).
C) Shopping malls are safe spaces, which is particularly attractive in countries with high crime rates.

SEZ have a similar set of advantages that make them attractive locations for doing business at national level and internationally:
A) SEZ are bustling hubs of economic activity as their size creates agglomeration effects that draw in both companies and workers.
B) The conditions for doing business in a SEZ are typically better and more consistent than in the country as a whole (otherwise they would not be "special"). Tax incentives, less burdensome customs procedures and business-friendly regulations draw in investment from within the country and from abroad. 
C) SEZ are safer spaces for doing business: not only by ensuring the physical safety of the people who live and work on their territory but also by providing more robust guarantees for the property rights of asset owners.

These advantages of the mall within a city and of a SEZ within a country are much more prominent if the city and the country are less developed and more chaotic. The bigger the differential, the bigger the value of setting up shopping malls in a city and SEZ in a country.

Shopping mall (Source: Wikipedia)




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