Question

In Labor Studies: Define "export processing zone."

Answer 1

Export Processing Zones (EPZ) are like Free Trade Zones(FTZs)EpZ , which are generally undertaken by the developing countries, in order to make their economies export centric rather than import centric. EPZ is a way to integrate the developing economies into the Global Supply Chain. Through EPZs the developing countries try to promote industrial and commercial exports by offering duty free taxes, tax holidays, expediating licenses or business permits, and developing infrastructure etc.

These EPZ are areas in the country which are developed to attract foreign investments from MNCs, expansion of industrial base, Introduction of Technology, and creating supply management linkages with the domestic economies. The EPZs have certain resources in the form of cheap labour and natural resources to induce the foreign investors to invest in these export oriented units. Having EPZs can prove to be beneficial for the countries as it can increase the country's foreign reserves, induce investments in the form of FIIs and FDIs, help the country expand its market globally, create new employment opportunities and introduce new technologies in the country.