Special Economic Zone

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Special Economic Zones: Essences and Possibilities

FULL PAPER

Irina Mikhalchenko

Student of 2nd course
University of International Business
050043, Navoi 296-41, Almaty, Kazakhstan
7 727 299928
E-mail: Dirish71113@yahoo.com

Abstract
This paper analyzes necessity and need for creation of special economic zones during the period of formation of a model of an open economy on the example of the Republic of Kazakhstan. Period of fundamental changes in economy during transition from closed to open economic systems is studied. The role, essence and possibilities of special economic zones are considered. The study and analyses of operating special economic zones in Kazakhstan are made. The paper concludes that special economic zones will bring positive impact just in case of deep analyses and study all the possibilities and threats.

Key words: special economic zone, integration, development JEL Classification: F15

Introduction

Today is era of globalization and integration of world economy. Countries all over the world are interconnected. Today is the right time for developing countries to gain potential and economic power, and on the other hand, there are plenty opportunities for developed countries to invest and make profit.

Many developing countries are going through the process of fundamental changes and integration into the world economy. The governments of developing countries should be very careful and forward-looking. There are many ways to stimulate domestic economy and provide economic growth. Special economic zones can serve as an effective instrument of strengthen the national economy through possibilities of external activity.

However, the creation and functioning of special economic zones can bring as positive as negative impacts. World practice shows that hot all special economic zones brought successful results. Formation of a special economic zone should be deeply analyze and studied.

The aim of my work is investigation in necessity and need for creation of special economic zones during the period of formation of a model of an open economy.

The main tasks of my work are follows:

• Consideration of a process of forming of a model of open economy by most developing countries and countries of CIS on the example of Kazakhstan

• Study of essence, purposes and possibilities of special economic zones,

• Analysis of presently operating special economic zones in KazakhstanIn the work textbooks, periodicals, magazines, internet sites and norms of legal base were used.

Tendencies of globalization and formation of an open economy in developing countries on the example of the Republic of Kazakhstan

For the last several decades all countries in the world got engaged in a process of regional integration and globalization. Globalization is a process of strengthening the linkages and interdependencies, covering the economy and other spheres of life in the world scale.[1] Globalization touches all spheres of human life. It influences on politics, culture, laws and especially on economies of countries. XXI century is the time of prosperity of high-tech and information technologies which interconnect people all around the world. Products, resources, finances, ideas freely flow between countries and nations. Governments of all countries perceive the great importance of the development of international relations and foreign policy. Foreign trade relations play one of the major roles in the economic development and sustaining of steady economic growth. According to the World Trade organization the importance of international trade has increased significantly over the last 60 years.

Table #1. Comparison of Growth of World Export, Gross World Product, and World Production [pic]
Source: World Trade Organization (Graph by Tom Hale, July 2003)

The trends of globalization expand the degree of openness of internal markets and...
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