Special economic zones are typically developed to attract investments, boost exports, create jobs, and facilitate technology transfer. Photo credit: ADB.
Countries in Asia have created special economic zones (SEZs) to increase trade, attract foreign investment, and test and advance economic reforms. In Southeast Asia, SEZs have been at the core of development strategies to boost export-oriented industrialization, create jobs, and promote greater participation in global value chains.
However, not all SEZs are created equal. Some have underperformed or failed because of lack of vision or strategy, regulatory and governance gaps, or poor alignment with the broader development strategy. Those that have done well have moved up the value chain, become hubs of innovation, and were strategically integrated into the wider economy, maximizing spillover effects. Meanwhile, advanced SEZs are included in economic or logistics corridor planning, connecting them with domestic and regional markets and enabling them to contribute to regional and subregional cooperation.
“SEZs are no longer just national initiatives. Increasingly, they are emerging as strategic platforms for regional cooperation and integration,” said Pamela Asis-Layugan, regional cooperation specialist at Asian Development Bank’s (ADB) Southeast Asia Department at a recent workshop on SEZs. “In subregions across ASEAN, such as the Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area (BIMP-EAGA), the Indonesia–Malaysia–Thailand Growth Triangle (IMT-GT), and the Greater Mekong Subregion (GMS), SEZs are intertwined with economic corridors, creating powerful synergies in connectivity, competitiveness, and value chain development.”
ADB organized a 3-day workshop to deepen participants’ understanding of special economic zones as a key driver of subregional cooperation and regional integration.
Transformative power
ADB organized a 3-day workshop on “SEZs as Drivers of Economic Corridors and Value Chains” on 30 July to 1 August in Jakarta in partnership with the Coordinating Ministry for Economic Affairs of Indonesia. The workshop was designed to strengthen the capacities of mid-career and senior officials from BIMP-EAGA, IMT-GT, and GMS.
In his opening remarks, Deputy Minister Edi Prio Pambudi of Indonesia’s Coordinating Ministry for Economic Affairs talked about the transformative power of SEZs.
“SEZs cannot stand alone as isolated enclaves. They must be deeply embedded in regional value chains, underpinned by robust infrastructure, capable institutions, and seamless cross-border cooperation,” he said. “Subregional platforms like BIMP-EAGA, IMT-GT, and GMS are instrumental in aligning national ambitions with regional goals, ensuring no community is left behind. To fully leverage SEZs’ potential, we must integrate them within economic corridors that enable the efficient movement of goods, services, and people. This synergy will be the engine of inclusive and sustainable progress across Southeast Asia.”
The workshop was attended by 26 mid-career and senior officials from BIMP-EAGA, IMT-GT, and GMS.
Opportunities for collaboration
Organized under ADB’s BIMP-EAGA, IMT-GT and GMS Capacity Building Program, or B-I-G Program, the workshop was led by Layugan and Aradhna Aggarwal, senior advisor to the Trade, Technology, and Skills Unit of the National Council of Applied Economic Research in Delhi. It was attended by 26 participants. The workshop aimed to develop an actionable agenda for the development of SEZs and identify opportunities for collaboration.
“Government officials must explore ways to leverage SEZs—particularly those in economic corridors—as platforms for engaging in value chains and production networks and expanding domestic economies beyond national borders,” said Aggarwal. “While SEZ policies and strategies vary by country, knowledge sharing and collaboration can significantly enhance strategic management approaches, refine national strategies, and integrate subregional and regional perspectives.”
An ADB study on SEZs in BIMP-EAGA suggests that a strategy that promotes cooperation alongside competition can turn these economic zones into investment havens and cross border production networks in the subregion. SEZs can be instrumental in creating a single BIMP-EAGA market and production base. Through “coopetition,” the four countries will have access to subregional resources and markets, which they can use to attract more investments into their SEZs. In turn, SEZs contribute to the growth of the national and regional economy through forward and backward linkages.