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Export processing zones
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Export processing zones
History of EPZ
Disadvantages
The notion of the EPZ may have originated from free trade zones established in major ports such as HongKong, Gibraltar, and Singapore during the nineteenth century. Some of the first free trade zones allowed imports and exports free from custom formalities, so that goods could be re-exported quickly. The EPZ has been used by developing nations since the 1930's to encourage foreign investment.
Unsafe working conditions are a negative factor that are often associated with EPZ's. Workers are expected to work long hours in physically dangerous conditions, including excessive noise and heat, unsafe manufacturing equipment, and uninspected buildings.
In 2006, 130 countries had established over 3500 EPZ's within their borders, with an estimated 66 million workers employed in those EPZ's. Some EPZ's are single factory locations, whereas some, such as the Chinese Special Economic Zones, are so large that they have a resident population.
Conclusion
Disadvantages
So, EPZ is a free trading zone that helps an economy to invite foreign investments. Unfortunately, in spite of creation of new jobs and development of technologies, most of zones is based on a cheap and unsafe working conditions and I suppose it would be great if corporations would be thinking about people first instead of money.
Many economists have concluded that employment in EPZ's means low wages, high work intensity, unsafe working conditions and suppression of labor rights. It is often true that the wages in EPZ' s are higher than those available in rural areas of the same country, especially for women, it is not always the case that wages in EPZ's are higher than those for comparable work outside the EPZ's. Many families in rural areas depend on the wages sent back by female workers within the EPZ.
Export processing zones: definition
These are selected areas in a country that will attract foreign investment to create jobs, expand the industrial base, introduce technology, as well as create backward linkages between the zones and the domestic economy
Advantages
The obvious benefits include the increase in foreign exchange through increased exports, job creation, foreign direct investment (FDI) to the host country, the introduction of technology into the country, and generating backward linkages from the EPZ to the domestic economy.