UN-Habitat & UNCTAD Discussion Paper on Special Economic Zones (SEZs) and Urbanization

July 6, 2020

This paper, by UN-Habitat & UNCTAD, seeks to address the link between SEZs and urbanization and builds on an earlier exchange between experts on this subject in February 2020 at the Tenth Session of the World Urban Forum (WUF10) in Abu Dhabi.

Special Economic Zones (SEZs) continue to be widely used across all regions and seek to achieve different economic policy objectives, with significantly varying degrees of impact. Experience has shown that proximity to urban centers is a key determinant of success for SEZs. At the same time, as policymakers seek to achieve objectives related to the Sustainable Development Goals, the success of SEZs will be increasingly defined in terms of how they can contribute to them and to sustainable urbanization in particular.

The COVID-19 pandemic has brought to light some of the challenges associated with increased urbanization, including densely populated and poorly planned areas. Urban centres have not only been epicenters for the transmission of the COVID-19 virus, but also proved to be particularly challenging settings within which to respond effectively to the pandemic.

Existing inter-urban inequalities are likely to be exacerbated, with the most vulnerable sectors of society, including urban informal sectors, being the hardest hit by the negative economic consequences of the crisis. In a post-pandemic context with a weak global economy and strained government resources, the role of SEZs to contribute to sustainable urbanization will be increasingly challenging but also more critical.