A Note On Export Processing Zones: The Bangladesh Case

Author's Name: Mohammad Zakir Hossain & Mohammad Zulficar Ali
Subject Area: Social Science and Humanities
Subject Business Management
Section Research Paper


Export Processing Zone & Free Trade Zone


The Concept of Export Processing Zone (EPZ) is not new today. It is a special case of Free Trade Zone which combines trade and manufacturing activities of a country. According to the United Nations Industrial Development Organization (UNIDO), the concept of EPZ implies the establishment of modern manufacturing plants inside a customs-bonded industrial estate by offering a suitable package of investment incentives to both foreign and domestic entrepreneurs. The central idea of EPZ is to provide incentives for investment, especially to motivate multinational corporations or companies to use the Zone as a low cost production base for labour intensive components, such as manufacturing, assembling and middle-stage processing for export to home markets or to other world markets. The emphasis obviously is not on the development of domestic manufacturing capability as such, but on the role of multinational companies for processing for export. Therefore, essentially "an EPZ is a foreign enclave with obvious extra territoriality in decision-making by units located in the Zone".

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