Assessing preconditions for effective special economic zones’s from a South African local governance perspective

Abstract

The rise to prominence of local governance has fueled the expectation that Foreign Direct Investments (FDI) would be domesticated for industrial development, especially within Special Economic Zones (SEZs). An SEZ is a geographical region that has economic and other laws that are more free-market-oriented than a country’s typical or national laws. For developing countries, SEZs traditionally have had both a policy and an infrastructure rationale. However, the mere existence of benign national regulations does not provide for good environmentally-sensitive governance of FDI for industrialisation, especially within industrial development zones in developing countries, where enforcement responsibility is at the local scale of the municipality. Instead, starved of economic development, most developing countries scramble for the creation of local governance structures in the hope of processing investments within localities. A democratic South Africa’s local governance has evolved into largely national liability due to unending qualified audits. The question is whether local governance is good enough to establish SEZs as conceived by the Department of Trade and Industry. This article provides analysis of the standing of local governance in South Africa’s Eastern Cape Province development zones of Coega and East London to determine degree of implementation of local public administrations linkages involving the complex, absurd and dialectical decisions related to the deficits of good governance occasioned by the absence of government interoperability within the localities of the Industrial Development Zones (IDZs). The article shows that government interoperability within localities, described in the linkages at the local scale, is paramount to the success of the SEZs and could be attained by implementation of a combination of aspects of the One-Stop Shop (OSS) models.