The Potentialities and Sustainability of Export Processing Zones in a Competitve Environment in an Integrated Economy:Evidence from Tanzania

By Joseph S.Kiria

Introduction and Background
Proposed research is literally about potentiality of Export Processing Zones (EPZs) in achieving strategic objectives envisaged in the national vision development objectives in Tanzania. Study explores the potentiality and sustainability of EPZ as a development strategy in the context of linkage with Foreign Direct Investment (FDI) and its benefits in a competitive environment. An understanding of this subject is important for at least four reasons.Firstly, government spends part of its limited budget through fiscal incentives to subsidize EPZs. This is a revenue loss to the governemnt, and such budgetary impact have implications on other government development programmes. Secondly, though EPZs strategy may look impressive, it may be constrained by the level of competiton created by liberalization, therefore, identifying challenges and limitations facing the regime in the competitive environment encouraged by free trade regime is important to enhance its sustainability.Thirdly, there is evidence elsewhere that it is mainly cheap labour and excellent infrastructure but not fiscal incenntives that attract export-oriented FDI.A proof will provide a lesson and new experince in the context of this study.Lastly, Tanzania experience on EPZ has not been explored enough partly due to the newness of the phenomenon in the country. One implication from these arguments is that due to high costs involved in establishing and maintaining EPZs, continuing to rely on the strategy if desired outcomes are not achieved satisfactorily is a wastage of resources.In such circumstances, government should address the obstacles more strategically, or resort to alternative strategies

Tanzania,