IDZ overhaul will address faults

After a careful look at the
only partially successful
industrial development zones
(IDZs) programme initiated
in 2000, the government
has come up with a new
scheme designed to rectify
some of the faults that it
has identified in a review
procedure.
The department of trade
and industry (dti) started
IDZs to support industrial
development in the host
regions, and with a special
focus on export-oriented
value-added products. A key
requirement for designating
an IDZ was proximity to
either an international sea or
airport. Consequently, four
IDZs were designated in
Coega in Port Elizabeth, East
London, Richards Bay and
the OR Tambo International
Airport. All are operational
except the Ortia IDZ.
But the general perception
in SA business was that the
IDZs fell short of their ideal
form – primarily because
of a lack of tax and other
incentives to drive industry
involvement.
They were primarily to
encourage geographical
relocation of export
industries to help develop
some of the less prosperous
regions – such as the Coega
IDZ at the new deep-water
port of Ngqura in the
highly under-employed and
economically disadvantaged
Eastern Cape, according
to Nada Reyneke, head of
international trade at the
Johannesburg Chamber of
Commerce and Industry
(JCCI). “But, as these
development regions are
removed from the main
industrial hubs of the
country,” she told FTW,
“they are of limited benefit
to the export industry in
general.”
Minister of trade and
industry, Rob Davies, noted
that, while the IDZs had
displayed some benefits, they
had not succeeded as much
as had been hoped.
The achievements, he
said, included a total of
40 investors attracted into
the IDZs with more than
R11.8 billion in investments
generated and more than 33
000 jobs (both construction
and direct) created. But,
despite these, it was felt
that more could have been
achieved, he added.
The department’s subsequent
review of the IDZ
programme has identified
certain challenges that need
to be addressed in order to
improve their performance
levels.
The result of the review,
according to Davies, has
been the special economic
zones (SEZ) policy and Bill.