Special Economic Zone Flashcards, test questions and answers

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What is Special Economic Zone?

A Special Economic Zone (SEZ) is an area within a country that has been designated by the government to have special economic regulations in order to promote foreign direct investment and economic growth. SEZs are often located near ports, airports or international borders for easy access to global markets and provide a range of incentives, such as lower taxes and relaxed labor laws, for businesses to set up operations in the zone. The goal of SEZs is to encourage development in certain regions or industries while improving national economic performance. SEZs can be used to attract foreign investment in areas where there may be poor infrastructure or limited resources. They also provide opportunities for local business owners who want access to global markets but don’t have the resources or expertise necessary to do so independently. This can help drive economic growth in areas with high poverty rates or unemployment levels by creating jobs and providing access to new products and services. In addition, SEZs can reduce red tape associated with doing business abroad, making it easier for companies operating within the zone to export their goods without having to navigate complex customs procedures or other bureaucratic hurdles. This helps reduce costs for companies looking to export goods from within the zone, which helps boost overall competitiveness in global markets. Finally, SEZs are often used as tools for regional development by providing incentives for businesses located within them that create benefits throughout a wider geographic area than just inside the zone itself. These benefits may include improved infrastructure such as roads and power lines that improve connectivity between cities; increased employment opportunities; improved education systems; better healthcare facilities; and increased wages due both increased competition among employers as well as higher quality standards required by businesses seeking discounted taxes through their presence in an SEZ. By creating these positive externalities beyond its borders, an SEZ can have far-reaching effects on a region’s overall prosperity.