SEZ Development in South Africa: A Case Study of Coega SEZ

AbstractThis paper analyzes the major advantages and problems of Coega special economic zone (SEZ), the earliest and largest SEZ in South Africa, adopting the research method of a case study. The author observes and analyzes the three main participants in the development and construction of Coega SEZ, namely the government, SEZ operator (Coega Development Corporation), and SEZ enterprises, so as to clarify the attribution of the problems and provide suggestions. How the South African government at all levels understands and operates the SEZ would have a significant impact on the development of Coega, which is also the concern of investors. The multi-party system in South Africa has generated complicated partisan politics, in which different parties at all levels are formulated in the administrative system, subsequently leading to a cumbersome process of administrative procedures and policy implementation. Issues like overprotective labor laws for employees, aggressive labor unions, and frequent strikes will reduce enthusiasm from investors. In addition, deep-rooted poverty and educational plights in South Africa also reduce the competitiveness of the talent market to some extent. For the South African government and relevant authorities that are responsible for designing SEZ strategies for better development, the following issues should be their major concerns, including what the development paths of SEZs are, what roles and functions they can play at each stage of the development itself, as well as how they and the management committees can form complementary mechanisms so as to better serve zone enterprises and facilitate multiple interactions among enterprises, between enterprises and management committees, and between enterprises and government departments, eventually improving the core competitiveness and comparative advantages of Coega SEZ.