FDI, Industrial Hubs, and Latin American Industrialization
Special economic zones are a flexible policy tool to attract foreign direct investment for economic diversification and upgrading. Success, however, is not guaranteed—there are many examples of zones where the cost–benefit analysis does not add up or just never took off. Experience across countries shows that understanding the conditions for setting up special economic zones is key for successful performance, as are complementary trade, education, and infrastructure policies. In addition, emerging technologies, policy repositioning, and sustainability trends reshaping the global business landscape impact special economic zones and their role in attracting investment. In this rapidly changing trade and investment context, Latin American governments and firms can build on these experiences to unlock the potential of nearshoring, increased services trade, e-commerce, new country sources of investment, and sustainability repositioning, while managing potential risks.