Transcript African Free trade zones: financial incentives

African Free trade zones: financial incentives, institutions and
performances by Semedo Gervasio University François Rabelais
Tours France GERCIE
Abstract. This paper deals with SEZS. Three parts are considered.
The first one give an history ,a definition of free trade zones and a
general economic theory. Thereafter we replace this analysis in the
context of African countries. With SAP they create many institutions
in this area, and the question is why low performances in SSA.
Finally we give policy recommendations to improve their functioning
with the new deal in Africa of economic integration and NEPAD.
Introduction
•
•
•
•
With details I will repeat my own objectives. First I observe that with SAP,
the Sub-Saharan African countries (SSA), settled up a mosaic of SEZs such
IFTZs or EPZs whose principal vocation would be the export of
manufactured products.
The multiplicity of such institutions of framing, not having always common
and coordinated objectives deserves to explore the effectiveness of it.
Therefore, we would start with a consequent review of the literature on the
SEZs created in the Developing Countries. A reasoned, critical and updated
history of those zones is thus provided in the first section.
In the second section, we will explore the incentive policies of the African
zones while locating significant factors determining the performances to
export of Less Developed countries (LDCs), including African countries,
before and after the establishment of IFTZs. In this part, we grant a
dominating place to endogenous factors specific to those economies; the
model used takes as a starting point the standard gravitational model. The
sample of our study include SSA countries (Cameroon, Côte d’Ivoire,
Ghana, Kenya, Nigeria, Senegal, Togo), Egypt, Morocco, Tunisia,
Madagascar, Maurice, Iran, Indonesia, Malaysia, Sri-Lanka, Philippines,
Brazil, Dominican Republic, Mexico, Trinidad and Tobago.
Lastly, our objective will be to give a set of recommendations which can be
used by national and regional public authorities in the new paradigm desired
by the African politicians and theorists (NEPAD).
Definitions and numerical importance of the FTZ
• The FTZ is an enclave in a country or a territory devoting the free
trade between established firms and firms operating in the
remainder of the domestic economy, but also between these firms
and the rest of the world. Also, certain activities are exempted of any
tax and do not obey to the regulatory framework imposed to
domestic firms. In a wide conception, Grubel(1982) provided this
definition : “a geographically defined area within which certain types
of economic activity take place without some of the government
taxation and regulation that applies to them in the rest of the
economy”. In this definition, rhetoricians include: the free ports, the
zones of transhipment and fuelling, the storage sections, the zones
of free commercial activity, the IFTZs, the warehousing and trade
facilities entities, customs free zones or free economic zones, the
free trade areas, the industrial and technological parks and finally
the EPZS.
Tables 1 Financial incentives granted in some African special Zones
Country
Benin
Legal status and tax and budgetary incentives
Prescription n°400 (2003). Creating the EPZs. Ordinary customs advantages. 60% of Current assets
resulting from diary indirect taxes on vehicles are assigned to the maintain infrastructure of the zone.
Fiscal advantages: exemption to income tax up to 14 years according to the landlockness and sites chosen
by companies and thereafter the rate is fixed at 20%; the maximum level taxes on wages and dividends
are at 4% during 5ans; exemptions of the Value added tax if a company give a promise to include
progressively local inputs in the productive process of the goods. The sale on the local market is
authorized. Freedoms of dismissal with priority to recruit nationals.
Cameroun Prescription n°90/01 in 1990 of creation of the National office of the EPZ placed under the supervision of
the Ministry for the Industrial Development and Commercial Advantages. Total exemption with the
import and the export. Tax advantages: total exemption for the income tax during 10 years; the rate
applied the eleventh year is 15%. Exemption with perpetuity for the other taxes especially for the internal
inputs. Right to open accounts in currencies within the local banking structure and total exemption of
control on the capital mobility. Not subjection of the companies to the code of the wages defined by the
fair national labour standards act and freedoms of dismissal.
Ghana
Decree of authorization of creation of ones private structure of management of EPZ in July 1995 after
parliamentary debate. Exemption of taxes to the import and export. Free income tax during 10 years and
after it is 8%. The accounts abroad, repatriations of profits are authorized and the freedom of dismissal is
guaranteed. 25 to 30% of the industrial production of the EPZ can be intended for the local market.
Togo
Law n°89-14 of September 89: creation of the Company of Administration of the ZF under the
supervision of the Ministries: Trade of Industry, Transport and Finances. Even standard of exemptions
that in with preferential rates on electricity, water, the telephone... the tax on the wages is 2%. Freedom of
transfer of the capital and dismissal.
Senegal
Three different statutes were successively voted: Law n°74-06 April 1974 instituting the EPZ of Dakar;
Law 91-30 April 91extending the principle of the EPZ to the whole of the territory (free port); and the
Law of February 2004 defining the statutes of the free company of exports with a potential to export at
80% level of their production. Five freedoms which can exist in a free Zone are accorded for 25 years
renewable duration except for the income tax whose rate is fixed at 15%.
Table 2 : Principal information on a sample of Special Economic Zones
Countries and zones date Type of special Institutions
of Exports
creation into brackets
zones and number framing
(public, starting from
into brackets
mixed or private the EPZ in %
control)
of
total
exports
in
2003
Benin (03)
Burkina Faso(99)
Cameroon (90)
Ivory Coast(86)
Ghana (95)
EPZ (3)
The Chamber of
Commerce (mixed)
Free Trade Zone
(1)
EPZ for factories
turn-key and free
port (2)
Office of foreign
trade (public)
National office of the
EPZ-Ministry
of
industry (public)
EPZ (1)
Promotion centre of
the
private
investments (mixed)
and
Ministry
of
Finances
EPZ (4)
,,
nda
120.895.364
nda
Nda
32%
30%
Madagascar (90)
EPZ (6) including
4
technological
EPZ and industrial
park
195.613.221
328.856.462
Free Trade Board
Zones (Private)
80%
Kenya (90)
Direct
Nnumber Origin of the Branches of industry and markets
investments in of
investors
US dollars in companies
2003
in 2003
Export
Processing
Zones
Authority
(private)
Export
Processing
Free
companies Ministry for Industry
and EPZ (1)
and the Chamber of
Commerce (mixed)
447.000.000
80% 1.655.369.654
40%
nda
Year of SPA
launching
Textiles, services, activities with labour
force; local and regional markets.
89
Activities with labour force ; local and
regional markets.
Food, drinks, industries of wood, tourism,
services; local, regional and European
markets.
86
Ivory Coast, Services, textiles, clothes, wood, drinks,
France,
food, shoes; local, regional, European and
Lebanon
US markets.
81
nda
Burkina,
nda Libye, France
Cameroon,
France, Spain,
44 Italy,
Lebanon.
88
60
Malaysia,
Oil, mines, drinks, textiles, clothes, food.
USA,
Lebanon,
South Africa,
117 China,
England,
Australia,
France, Italy,
Germany
USA,
England,
Hong Kong,
69 China, India,
Sri-Lanka,
Pakistan
84
Clothing, textile, services, agricultural
processing industries, pharmacy, electrical
equipment and tools, electronic products;
local, Regional (Uganda, Tanzania,
Burundi), USA, Europe and Japan.
80
USA, France, Food, services, timber, watches, textiles
Maurice,
and clothes; regional (Indian Ocean),
Hong
Kong USA, European and African markets.
180
(China),
Southeast Asia
89
Malawi (90)
Mali (92)
Morocco (77)
Maurice (75)
Nigeria (90)
EPZ (1)
ZLE(1)
EPZ (2)
Investment
Promotion Agency
(private)
Promotion Centre
of
investments
(public)
Ministry
of
Finances
The whole Island is Export Processing
a special free trade Zones
Authority
zones
(private)
302.625.280
nda
2.962.256
61%
395.000.000
77%
53.734.731
nda
312.000.000
Togo (89)
Ministry of mining
and
Industries
(public)
EPZ (2), free port Authority of the
(1)
Free Zones, Mixed
investment
Company
30%
60.185.082
Tunisia (76)
EPZ (2)
Agency for the
promotion of direct
investments
(public)
60%
626.858.352
Senegal (74)
Free port,
companies
EPZ(1)
free EPZ of Dakar,
and mixed
Company
with significant part
of the Senegalese
government (53%),
Ministries
of
Finances
and
Industry
EPZ (4)
Export Processing
Zone
Authority
(private)
Technological parks Mixed agency
and EPZ (22)
EPZ and industrial Private agency
parks (12)
30%
108.789.619
nda
nda
Iran (90)
Pakistan (74)
Sri Lanka(77)
FTZ and free ports
60%
50% 81.000.000.000
33% 64.000.000.000
USA, South Africa Textiles, clothes; USA and South Africa.
80
Germany, France, Agriculture, mines, tourism, metals, wood,
17 Denmark
leathers, textiles; local and regional
82
50
France,
63 Switzerland, USA,
England
Maurice, France,
England,
South
513 Africa,
India,
Malaysia,
Hong
Kong (China)
72 USA,
England,
Europe, Nigeria
45 France, Lebanon,
Ethiopia,
Italy,
South South Korea
Spain, USA, Hong
Kong (Clouded),
Ivory Coast
2503 Tunisia,
USA,
France, Germany,
Italy,
Belgium,
Netherlands,
Russia,
Libya,
Japan, Sweden
52 Senegal, Lebanon,
France (13)
Textiles,
clothing,
leathers,
shoes,
agricultural processing industries and
services; Europe, the USA
Textiles, clothes, apparels and sophisticated
tools, biomedical materials, electronic
products, watches…; Asia, Europe, Africa,
North and South America
80
nda
Agricultural processing industries, oil, gas,
mines and communication; local and
regional
Synthetic shoes, final assembly of
computers, hair, industrial adhesive,
cosmetics, cassette radio, horticulture,
vegetable oil; USA, Europe, local and
regional markets.
83
Electronics industries and mechanics,
textiles, clothes, leathers, shoes, tourism,
services, pencils
78
Local and regional markets
(WAMU)
80
81
2035 France, Germany, Electronics,
chemistry,
oil-chemistry
None
Iran,
Emirates, industries.
Turkey
403 The , Europe, , , , Textiles, electronics, sophisticated tools, None
clothes…
402 The , Europe, Textile, leathers, clothes, sophisticated None
South Asia I, ,
tools, tea, drinks, agro-industries, tourism,
services
Collective Welfare and economic theory
•
In economic theory, the free zone approach is between the analysis of the
subsidy and the analysis of the consequences of tariffs and non tariffs
barriers. For economists like Hamada (1974), the theory subjacent is a
theory of the second best. Naturally the neo-classic analysis (Young and
Miyagiwa, 1987) disputes this result to him; the EPZ is of course Welfare
improving. In their framework, in a presence of a massive Harris-Todaro
unemployment, the national income of the host country will increases as a
result of the removing of tariffs on imported intermediate inputs and capital
goods in the IFTZ. We still believe that empirical studies are necessary to
give some highlights and policies recommendations. Nevertheless, and at
first, the history of the LDCs since the middle of the Sixties can be mobilized
to analyse their outward-looking policies.
Assembly plants, FDI subcontacting, policies in the North and Five
freedoms in LDCs
•
•
•
The international Division of labour between developed countries and
DCs goes on major transformations with the oil crisis of 1973. The International
Division of the Product Process (IDPP) or the phenomena of the Sharing
Production returns account of this transformation of the North-South
relationships. The localisation of offshore assembly plants in the LDCs by
MNCs by FD Ior by subcontracting is the outstanding stage of this process.
Also, interest groups in North conduct their governments to take measures to
reinforce their competitiveness or to limit delocalisation of footloose industries
States of the DCs grant five freedoms [1] necessary to the establishment of the
firms mainly in the arranged EPZ. Lastly, the international organizations
(UNCTAD,UNIDO)
finance
studies
to
encourage
this
activity
[1] Dismissal, repatriation of the profits and transfers of capital, imports and
exports with weak or non-existent customs duties, exemption compared to the
corporation tax and indirect taxes and free use of the infrastructures (roads,
railroads, ports, airstrips, telecommunications, water…).
Successes are not always possible everywhere
•
•
For SEAsian countries : full success on international markets, growth
and employment were realized. They increase and enlarge their
spectrum of comparative advantages. their early openness, their land
distribution policies to avoid crops defaults and international
dependence on foods imports, their clear definition of property rights
can explain their performances.
In Mexico, where the preference for the promotion of export is not
clear, maquiladoras industries dominated by the American
multinational firms, did not give the awaited hopes, but the situation
for the other countries of Latin America is still much more critical
taking into consideration macroeconomic indicators like the growth of
the national income, exports behaviour and the rate of unemployment.
• The success of the four tigers is not checked, as much during
the same period, in countries like the Philippines and Morocco,
beginning their industrial activity with the automobile assembly
plant centred on sales into their domestic market.
Conclusions about the reasoned history of EPZs
•
The duplication of this experiment should not be taken everywhere. The
application of suitable measures - incentives with export, free entry for the
imports, wage braking... - does not ensure immediately and inevitably
qualified heads of enterprises, an improvement of labour force and links
between the sector of export and the remainder of the economy. The
linkage effects can be weak because the EPZS have limited cycles of life, or
are enclaves in certain countries, where the institutional organization is
missing. Moreover, the production in a EPZ is sometimes episodically curt
according to risks and to the nature of subcontracting or according to the
requirement of relocation felt by the multinational firms[1] (Mouhoud, 1989).
Apart from these negative aspects, and because of the existence of waves
of new exporting countries, there are bases for an optimism of exports
justifying theoretically that a DCs chose to offer to MNCs and other foreign
firms tax breaks, relaxed legislation, investment in infrastructure, reduction
of red tape or excessive bureaucracy, reduction of duties, absence of labour
union activity, subsidised land. Traditional determinants must meet the firm
interest
•
[1] Return of segment in a developed country following a technological improvement.
Policies of attracting MNCs in African EPZs: the role of
protectionist past and SAPS
•
Before the creation of SEZs, the African countries as a whole, except Maurice, make the
choice of import substitution turned to their domestic market. The public companies are
the supports of such a policy where the private initiative and the markets are subjected to
forms of regulation of the prices and or quantities, even with legally organized rationings.
•
The direct investment is then of a low level except in traditional activities. The level of the domestic
demand, the rate of inflation, the interest rate, the liquid assets ratio measuring the financial development
(M2/GDP), the stability of the exchange rate, the degree of opening to the foreign trade, the share of the
administrative expenditures in the GDP are as many determinant variables on the attraction of the direct
investments and the growth. Bloom and Sachs thought that the isolationist situation of the majority of the
SSA countries- landlocked countries- mainly explains the commercial and financial marginalisation of this
continent. But the geography does not explain all.
Discussions with the private, public and or multilateral organizations within the clubs of Paris and
London, and with specialized organizations of the United Nations (UNCTAD, ONUDI...) started by resulting
in a panoply of commercial reforms aiming softening the operation of the markets, privatising a range of
activities and at setting up policies to attract FDI and outward looking policies. SAPs are one support
•
•
to abandon the past protectionist policies everywhere in Africa.
Despite
old
and
more
recent
experiences
in
the
neighborhood
(Madagascar,Morroco,Tunisia, Madagascar), in SSA contriesthe weight of the past remains
alive, because the politicians and the bureaucrats do not seem persuaded with the idea,
that in the long run, the relaxation of control on the companies would be advantageous for
them; the effectiveness in the allowance of the resources is not included/understood as
being the precondition of a better distribution. Thus, the African countries have evil to
separate old choices safeguarding of the revenues at the origin of an immersizithing
growth.
However all is not negative in Africa
•
•
But we know, if the country risks (extent of the national debt, risks of
risings violent one, unlimited strike, war...) are disproportionate, firms
never establish. So that, incentive policies are not sufficient, and they
need to integrate politic factors and the domestic potential
entrepreneurs who can wok with MNCs.
So that, to think more before acting is relevant. Because, the creation
of value in a modern economy implies a lighting on a multitude of
constraints of management: inciting and evolutionary systems for the
workers and the companies, the packing attracting of the products,
marketing, the distribution, the quality control, the inventory of stocks,
the systems of payment tested and reliable to adapted banking
services, the installation of data-processing tools, communication,
invoicing.
What are now the really performances of SSA countries? FDIs’ results
• Between 1980 and 1984, the annual growth rate of the FDI in the
DCs increased by 1630%, while Africa counts only an increase of
496%. It results from it that the share of Africa in the total of flows of
FDI in direction of the DCs dropped significantly (see table 4). It is
36% between 70-74; it passes to 10% between 80-84 then
stagnates to 3% between 95-04.
• The graph 1 gives the evolution in volume of the FDI (million $),
during this last decade, in the various countries of the sample
retained in our empirical study. The share of the countries of Latin
America has practically triplet and accounts for almost 80% of total
volume. The FDI in Asia fell between 1998 and 2000 following the
financial crisis of 1997, but it appears that the FDI return towards
this area these last years. In addition, the case of the countries of
SSA remains enigmatic, since the volume of the much reduced FDI
before 1995, did not increase during the Asian crisis (backward flow
of the FDI rather towards the Latin America) and is in stagnation.
Why poor results in this side of FDI ?
•
•
The investors are not solely attracted by the natural endowments in factors and the tax
advantages. They are sensitive to other varied economic constraints and institutional
guaranteeing political and social stability in the host country and the African current
situation does not seem to give a particular premium of location of the direct
investment in this continent.
The insufficiency of the public resources, bad economic and political governorship, and
unequal ethnic policies of redistribution of the revenues, religious conflicts, corruption
and the wide capital flights are so many factors with high weight acting on the volume
of FDI. the non economic risks are higher in Africa (institutional problems) and or
because the investors do not have opposite good information and ignore the African
economic area.
•
It remains comparatively with other spaces and by using the indices of Kaufman and
al.. (2006) that the public governorships in ASS in spite of the steps worsened between
1996 and 2005 (see graphs 2 to 5). The most of the African countries in the South of the
Sahara are located in the South-Western quadrant indicating of institutional qualities in
deliquescence. Three indicators of governorship are used here: the indicator of
authority of the Law (Rule of Law), the indicator of effectiveness of the State
(Government Effectiveness) and the indicator of control of the corruption (Control of
Corruption).
Graph. 2 :Role of Law and Government Effectiveness
0,80
MALAYSIA
MAURITIUS
0,60
TUNISIA
TRINIDAD AND TOBAGO
Government Effectiveness 1996
0,40
PHILIPPINES
0,20
INDONESIA
GHANA
BENIN
0,00
MOROCCO
MEXICO
-0,20
BRAZIL
EGYPT
SRI LANKA
SENEGAL
IRAN
-0,40
D. REPUBLIC
PAKISTAN
-0,60
KENYA
BURKINA FASO
TOGO
-0,80
MADAGASCAR
-1,00
CAMEROON
-1,20
NIGERIA
-1,40
-1,50
-1,25
-1,00
-0,75
-0,50
-0,25
0,00
Role of Law 1996
0,25
0,50
0,75
1,00
Graph. 3 Role of Law and Government Effectiveness
1,25
MALAYSIA
1,00
Government Effectivness 2005
0,75
MAURITIUS
0,50
TUNISIA
TRINIDAD AND TOBAGO
0,25
MEXICO
0,00
GHANA
MADAGASCAR
PHILIPPINES
BRAZIL SENEGAL
MOROCCO
-0,25
EGYPT
SRI LANKA
DOMINICAN REPUBLIC
INDONESIA
PAKISTAN
BURKINA FASO
BENIN
IRAN
KENYA
-0,50
-0,75
NIGERIA
CAMEROON
-1,00
-1,25
-1,50
-1,50
TOGO
-1,25
-1,00
-0,75
-0,50
-0,25
0,00
Role of Law 2005
0,25
0,50
0,75
1,00
Graph. 4 :Role of Law and Corruption
MALAYSIA
MAURITIUS
0,50
MADAGASCAR
TRINIDAD AND TOBAGO
MOROCCO
Control of Corruption 1996
0,30
EGYPT
0,10
TUNISIA
BRAZIL
-0,10
SRI LANKA
MEXICO
BURKINA FASO D. REPUBLIC
-0,30
SENEGAL
INDONESIA
-0,50
PHILIPPINES
GHANA
-0,70
IRAN
-0,90
PAKISTAN
TOGO
-1,10
KENYA
CAMEROON
NIGERIA
-1,30
-1,50
-1,50
-1,25
-1,00
-0,75
-0,50
-0,25
0,00
0,25
0,50
0,75
1,00
Rule of Law 1996
Graph. 5 :Role of Law and Corruption
0,50
MAURITIUS
MALAYSIA
Controle of Corruption 2005
0,25
TRINIDAD AND TOBAGO
TUNISIA
BURKINA FASO
MADAGASCAR
0,00
MOROCCO
SENEGAL
BRAZIL
-0,25
MEXICO
SRI LANKA
GHANA
EGYPT
IRAN
-0,50
PHILIPPINES
DOMINICAN REPUBLIC
TOGO
-0,75
INDONESIA
KENYAPAKISTAN
-1,00
BENIN
CAMEROON
NIGERIA
-1,25
-1,50
-1,25
-1,00
-0,75
-0,50
-0,25
0,00
Rule of Law 2005
0,25
0,50
0,75
1,00
Source: D. Kaufmann, A. Kraay et M. Mastruzzi (2006)
The influence of the creation of EPZS on African exports: estimate of
a model
Our model of gravity is written in the following functional form:
Where
Xij is the growth rate of exports from country i to country j.
Yd and Yf are the growth rates of the GDP of each DC and the average of the European Union of 15
members.
IDE : growth rate of the FDI.
FRET = growth rate of freight starting from the countries bound for Europe of 15 (EU15).
VFX is the annual volatility of the euro/dollar exchange rate.
INFd and INFf are respectively the rate of inflation of the domestic country and the average rate of inflation
of the countries of the UE15.
IMPt-1 : lagged growth rate of the imports.
Ld and Lf are the growth rates of the working populations in the LDCs and the EU15.
VM is a dummy variable which takes value 0 before the introduction of the zone and value 1 after. Often,
EPZ borns after 1985 with SAP.
To indicate time, we use the notation t and the exporting country is j. In panel and in linear form, the model
with fixed effects becomes:
With
Where the kj are the effects specific to the country j. εt is a random variable of null average and constant
variance (assumption of homoscedasticity).
• No structural changes since the expected effects are checked. In fact the growth rate of the
various exogenous variables: GDP of Europe of the 15, GDP of the DCs, FDIs, and imports of the
DCs and the volatility of the European currency with respect to the dollar influenced the growth
of exports of the countries of our sample.
• However the distance measured by freight does not seem to influence the endogenous
variable; the assumption of borders effects is not then checked.
Table 7 : Panel model estimate by region
Panel A : Asia and Middle East
1975 - 1985
Coefficient
Estimate t-Student
α0
-0.203
(-0.951)
α1
0.885**
(2.055)
α2
5.267*
(2.582)
α3
-0.005
(-0.923)
α4
0.005
(0.114)
α5
-8.580
(-0.966)
α6
0.000
(0.033)
α7
0.099
(0.592)
α8
-5.048
(-0.706)
α9
0.267
(1.284)
Indonesia
-0.031
Iran
0.182
Malaysia
0.015
Pakistan
-0.051
Philippines
0.007
Sri Lanka
-0.131
R² et DW
41,45%
2.590
1986 - 1999
Estimate t-Student
0.157
(1.499)
-0.521**
(-1.929)
0.147
(0.187)
0.016*
(3.145)
1.349
(0.941)
-9.959**
(-1.978)
0.002
(1.401)
0.772*
(7.975)
-0.946
(-0.246)
-0.136**
(-1.926)
0.011
-0.148
0.004
0.037
0.048
0.019
62,05%
2.600
1975 -1999
Estimate t-Student
0.074
(0.799)
0.274
(1.074)
1.249
(1.397)
-0.001
(-0.163)
-0.002
(-0.042)
-5.599
(-0.990)
0.001
(0.596)
0.487*
(5.139)
-1.408
(-0.438)
-0.051
(-0.741)
0.023
-0.083
0.030
0.009
0.033
-0.021
0.318
2.710
•Appreciably increase of export between 1986 and 1999 thanks to the boom of the FDIs. In spite of the
Japanese crisis and taking into account the fact that Europe is not the principal market of destination of their
exports, it is completely acceptable that this growth was drawn by processes of regional and domestic
integration.
•The exception relates to Iran for which there is negative fixed effects, without any doubt related to institutional
instability.
•Characteristics are detectable by country and under-periods. Indonesia more tardily starts its insertion within
the international division of labour like Sri-Lanka; the Philippines and Malaysia begin this process early rather
than the others.
Panel C : Amérique Latine
α0
α1
α2
α3
α4
α5
α6
α7
α8
α9
Brazil
Dominican Republic
Mexico
Trinidad and Tobago
R²
DW
1975 - 1985
0.219
0.391
-4.017
-0.001
-0.266
-5.764
0.001
0.392**
-8.421
-0.030
-0.039
0.004
0.037
-0.007
37,70%
2,49
(0.880)
(0.693)
(-1.197)
(-0.239)
(-0.339)
(-0.385)
(0.495)
(1.983)
(-0.666)
(-0.225)
1986 - 1999
0.045
-0.417
-2.329
0.006
-0.013
-69.275***
0.000
0.694*
17.685
-0.026
-0.007
0.054
-0.022
55,49%
2,37
(0.391)
(-0.760)
(-1.552)
(0.426)
(-1.361)
(-1.747)
(-1.249)
(5.350)
(1.134)
-
1975 -1999
0.075
0.083
-1.875***
0.001
-0.007
-3.297
0.000
0.625*
-2.457
0.037
0.017
0.038
-0.013
-0.044
42,72%
2,33
(0.698)
(0.274)
(-1.593)
(0.295)
(-0.785)
(-0.426)
(-1.196)
(6.257)
(-0.425)
(0.516)
•UE15 growth is not influential; the United States holds a dominating place in trade of these countries, in
particular Mexico.
•If the effects of the FDI are not very significant, that is due partly to their preference for the importsubstitution during the first period before SAP.
•The Dominican Republic and Brazil open more with the international trade and diversify their trade
partners more and more, and thus improve the effects specific to the growth of their exports.
•In Mexico without any doubt, the restructuring of maquiladoras attenuates the specificity of exports.
Characteristics of the African EPzs and performances
•
•
•
•
•
•
The African SEZs do not have all the status of EPZ; they reflect a panoply of
configurations of existing free zones. In the same country, it is possible to find a
multiplicity of organizations with different legal status where the rules are frequently
modified. This ambiguity in trade arrangements and tax does not facilitate the
establishment of the MNCS.
The territorial duality increases the costs of production. Also currency pegs are not neutral
on performances.
EPZs in Africa constitute the last newcomers after a severe debt crisis and without selfsuffciency for crops, foods…
In the majority of cases, the country did not seek to master a segment of production (final
assembly, production of intermediate mixed with local products meeting international
standards). So that some countries like Senegal live drastic failure
The firms located in the African zones seek more to compete with domestic firms and are
not resolutely turned towards export, because the clear option for export is not selected in
Africa.
GSP and AGOA boost African exports, because they are relevant to avoid MFA and other
protection measures in the North. Indian and Chinese businessmen create joint-venture
with Africans to exploit these commercial agreements.
Panel B : SSA
α0
α1
α2
α3
α4
α5
α6
α7
α8
α9
Benin
Cameroon
Ivory Coste
Ghana
Kenya
Madagascar
Mauritius
Nigeria
Senegal
Togo
R² et DW
1975 - 1985
-0.097
0.120
4.369*
-0.002
0.030
-8.352
-0.002
0.407*
2.961
0.064
0.057
0.035
0.080
-0.092
-0.016
0.057
0.025
-0.016
-0.110
37,74%
(-0.989)
(0.372)
(2.803)
(-0.428)
(0.854)
(-1.277)
(-1.182)
(4.123)
(1.032)
(0.842)
2,34
1975 - 1985
-0.102
0.039
0.880
0.000
-0.013
-1.578
0.001
0.635*
0.808
0.077
-0.027
-0.011
-0.003
-0.009
-0.010
0.014
0.047
-0.048
0.007
0.028
41,26%
(-0.778)
(0.149)
(1.131)
(-0.492)
(-0.534)
(-0.090)
(1.103)
(7.418)
(0.165)
(1.089)
2,60
1975 - 1985
-0.027
0.198
1.829*
0.000
0.013
-3.389
-0.001
0.487*
0.869
0.012
-0.049
0.003
0.008
0.018
-0.017
-0.005
0.032
0.004
-0.009
-0.018
32,30%
(-0.515)
(1.025)
(2.608)
(-0.495)
(0.655)
(-0.775)
(-0.980)
(8.005)
(0.586)
(0.366)
2,28
•The dummy indicating EPZ is positive but not significant; the explanation can rise from the strategy even of the investors seeking more to penetrate
the local and regional markets.
•Negative impact of the FDI on the whole period and each under-period.
•The fixed effects are positive for Madagascar and Maurice for the second period translating the improvement of the public policies, the choice of a
larger opening to the international trade. If the same effects are found in addition in Kenya and Togo, it is advisable to notice that these countries do
not escape from institutional instability, and we can assert the brittleness of the results. For the other countries (Benin, Cameroon, Ivory Coast and
Senegal), the performances are negative in a recurring way.
•Ghana makes the exception and this result come out with the success in SAP recognized by the international community, with the respect of the law,
the effectiveness of the State and with the fight against the corruption.
Panel D : North Africa
α0
α1
α2
α3
α4
α5
α6
α7
α8
α9
Egypt
Morocco
Tunisia
R² et DW
1975 - 1985
0.236
0.107
5.305*
-0.100
-1.991**
0.002
-0.001
0.115
-1.785
-0.261
-0.148
0.148
0.074
79,63%
(0.574)
(0.276)
(3.125)
(-0.552)
(-2.517)
(0.984)
(-0.140)
(0.535)
(-0.086)
(-0.464)
2,36
1975 - 1985
-0.055
-0.030
-0.169
2.484
-1.253
0.000
0.007
0.699*
5.672
0.029
-0.048
0.020
48,93%
(-0.437)
(-0.082)
(-0.191)
(0.891)
(-0.755)
(0.408)
(1.566)
(4.333)
(0.498)
-
2,54
1975 - 1985
0.039
(0.426)
0.293
(1.191)
0.903
(1.155)
-0.130*** (-1.955)
-0.869
(-1.491)
0.000
(0.202)
0.006
(1.386)
0.487*
(3.854)
3.683
(0.474)
-0.049
(-1.069)
-0.012
0.011
0.002
46,27%
2,34
•UE15 growth has positive effect on export growth.
•Exchange rate volatility has negative effect.
•Tunisia diversified as of the first period its structure of exports by not privileging the European
destination, this is why probably over the second period, and the fixed effects do not penalize this
country.
•The strong dependency of Morocco with the European FDI and the market of the EU have had
for consequences negative effects in second period.
•Egypt, being adapted more and more to the international trade, improved its performances with
export.
EPZS and institutional analysis
•
We start with a definition. the institutional economy is interested in the links
between the behaviour of the agents and nature of the institutions, and in the
link between the evolution of the performance of a country and the
accompanying political, social and administrative structures. The institutions
are composed of: i) a political structure incorporating the political choices
which are expressed, and which need an administration to implement the
ideology and modes of regulation; ii) a structure of rights of ownership
defining the formal incentives; iii) a social structure which defines the
standards and conventions. From this theoretical point of view, the
mechanisms of incentives, compliance with the rule sand political and social
stability guarantee the rights of ownership and the confidence of the investors,
and explain the differences in performances between countries. This is why, for
a whole range of institutions chosen by a country, it is necessary to raise the
questions of their attractiveness, their feasibility and their credibility[1].
[1] As we will confirm it, the African zones in the South of the Sahara were not
as a whole to think, because the studies of their feasibility were hasty; their
attractiveness and their credibility suffered from this erroneous behaviour of
anticipation of the authorities under influence of various organizations and
especially sensitive to the argument of the economic governance requiring the
installation of policies of structural adjustment.
The failure of planned and protectionist mechanisms of economic regulation in the
light of New public Economy
•
•
•
The authorities of such countries are then tempted to more control over the companies at
the origin of the creation of wealth and or to maintain an inefficient and large public sector.
Successful African experiments in privatization as a significant scale of activities per
country are not listed for the Nineties. Perhaps more than elsewhere, strong complicities
between bureaucrats and African politicians prevented the transformation of the budgetary
decisions into completely productive activities, thus they subsidize the range of population
espousing their own social and political preferences. Actually, the programs of
privatization to this point consisted in transferring rights to politicians, chiefs of clans,
persons in charge of religious groups and bureaucrats reconverted as businessmen or
using intermediaries to adapt economic activities. They don’t really assume shareholders’
risks.
New owners of companies domicile their asset abroad and organize widely to capital
flights. They are not searching agreements like joint-ventures to produce locally and with a
clear option to export in a contest of political instability and crimes against private
property.
The companies managing African SEZs are mixed or public (administrative conflicts,
political pressures, many offices are created to respond to the same problem of
establisment of MNCs)
The need of New public policies
•
•
•
•
•
The traditional incentives granted within the framework of the various SEZs
have interest only, if the African countries eliminate the differences between
the various free zones which can co-exist in the country. The territorial duality
is not likely to attract investors. It is preferable to have transparency for the
rules for the EPZ.
African decisions makers need to put away protectionist slogans. More
openness seems to be really necessary
Self-sufficiency is also needed, because SSa are vulnerable to climatic shocks.
Also incomes are distributed unequally; the governments did not have plans
for the storage of food and usually imports products.
Factors determinant on growth release of level of education, wealth, public
infrastructure and new institutions . So that the donors’ countries must support
sectorial decisions in education and particularly professionalisation in a
country or in a regional basis.
In each country, there is urgent to have a single point of contact for MNC based
on private schemes of business and management .
New policies again at the regional, continental and international level
•
•
•
•
•
•
No concurrence between EPZS in the same currency area and or the same
economic union.
Between members states of an economic area, it is possible to define a
specialization of EPZs located in each countries by products according to their
endowments, the level of human capital, the degree of landlessness and to
seek dynamic advantages. No tax wars to attract MNC is needed in this context.
At a regional level a private one stop shop is conceivable to simplify the
procedures for establishment and the management of the zones.
At the continental level with NEPAD, it is question of communication about and
exchanging information about on the experiences gained on the level of each
sub-area. The work of AAFZ is welcome, but the essential is in pragmatism
and new rules of the game base on markets mechanisms clearly identified.
WTO and developed countries have to help more Africa with a positive
discrimination
Association between African investors and newcomers from India, Chian, and
other Economies on Transition are also recommanded.