THE POLITICAL-ECONOMY OF EXPORT PROCESSING ZONES (EPZS) IN DEVELOPING-COUNTRIES - IMPLICATIONS FOR THE ARANDIS EPZ INITIATIVE IN NAMIBIA

The ideology and praxis of EPZs are reviewed, followed by an analysis of the economics of EPZs. Namibia's EPZ incentives are analysed in the context of successful EPZs elsewhere in the world. Although the Arand is EPZ in Namibia has some credible advantages, its fiscal incentives are not really special by international standards. The zone's incentiv es appear suitable for non-mineral processing industries, while the co untry's comparative advantages are in minerals. The conclusion is that EPZs are not of themselves engines of economic development, and must not be sold as such. Traditional investment strategies, eg R&D and joi nt ventures, offer better opportunities for development at about the s ame cost as EPZz.