In 2015, the world had nearly 4,300 Special Economic Zones (SEZs) in existence and the number is only increasing with the passage of time. China established its first SEZs in 1980. The success of these SEZs, and in particular that of Shenzhen, inspired other countries to follow suit. India set up its first Asian SEZ in Kandla in 1965, followed by Singapore, Malaysia, and the Philippines, all of whom started their SEZs between 1968 and 1972.
Nowadays, ASEAN Member States have widely adopted the SEZs model, establishing more than 1,000 SEZs and recognizing their vital role in the development of the ASEAN Economic Community. In December 2015, Japan adopted the Law on National Strategic Special Zones as a part of the regulatory reform and more generally as part of “Abenomics”, the economic policies advocated by Prime Minister Shinzo Abe in 2012. In 2016, the Dubai Multi Commodities Centre was awarded “Global Free Zones of the Year” for the second year running, thanks to the constant support given by the United Arab Emirates to its investors. In 2017, the Vietnamese Planning and Investment Minister announced the establishment of three ‘outstanding’ SEZs in the north, centre and south of the country. These offered investors greater incentives and fewer restrictions than those available to date in the country. Thus, as more countries in the ASEAN region understood the potential benefits of SEZs to international trade and FDI inflow, the number of SEZs increased substantially. SEZs were increasingly being accepted for their benefits to the development of domestic institutions, policymaking and reform.