Key Points:

  • South Africa is currently experiencing low growth and job destruction. The objective of the export processing zone (EPZ) is to provide a competitive location for labour-intensive manufacturing activities.
  • An EPZ in the Port Elizabeth area would be an experiment with a new form of economic activity, with considerable potential to enhance exports and create employment. Costs to the government would be limited, as no subsidies would need to be offered.
  • Firms locating in the EPZ would have low labour costs and, relative to other international locations, they would also have access to workers with better training and more experience.
  • The efficiency of the EPZ would be increased if it was developed and managed by a private firm, which would therefore have an interest in ensuring that it succeeds.
  • The EPZ proposal should be seen as part of a broader discussion as to how South Africa could expand and diversify exports and simultaneously create employment for those millions of workers, the unskilled and semi-skilled, who are most in need of employment opportunities
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