mechanisms are normally an important part of political risk insurance schemes. Again, international organizations play an important role here – for example the World Bank –hosted International Centre for the Settlement of Investment Disputes (ICSID).

But the most important institutional channel for managing commitment risk will be the structure of governance of the EIZ. In this context, international best practice suggests a multi-level structure that includes the following components:

1. A **master developer** of the EIZ (responsible for development and operations of the zone), which in turn may parcel out sections of the zone as well as infrastructure to subdevelopers;

2. An **EIZ regulatory authority** , which operates as an autonomous governmental agency overseen by a Board – the regulatory authority may also act as the **local government authority** ; and 3. A **national or supranational government** that oversees the authority Figure 4 illustrates the structure that governs the large-scale SEZ in Aqaba. Here the master developer – the Aqaba Development Corporation (ADC) – is a private shareholding company that was initially established and remains a 50/50 joint venture between the Government of Jordan and the regulatory authority (ASEZA). ADC is governed by a 6-member board of directors. In the case of the EIZ, the master developer could also be formed through some sort of joint venture development corporation established by member states. Alternatively the master developer could be a completely private company or consortium. Indeed, the original intention with the development of Aqaba was to attract a private developer and there remains a plan to eventually shift the ownership to private shareholders.

**Figure 4: Aqaba Special Economic Zone Structure**

**<u>AQABA SPECIAL ECONOMIC ZONE STRUCTURE</u>**

<!-- Start of picture text --> Prime<br>Minister/<br>Cabinet<br><!-- End of picture text --> <!-- Start of picture text --> Prime<br>Minister/<br>Cabinet • Supervises the work of the Authority<br>• Chairs the Authority meeting when present<br>• Independent Government entity that reports directly to the Prime<br>Minister<br>• Is created and vested with its powers by a law<br>• Sets zone rules and regulations<br>ASEZ Authority • Is managed by a Board of Commissioners (total of 6)<br>• Provides one-stop shop administrative services (including<br>administration of customs and taxes)<br>• Can vest its authorities to other entities<br>• Selects, appoints and controls the performance of the private<br>developer(s)/operator(s)<br>Aqaba • Develop and operate/manage the zone, including infrastructure<br>Development development (excluding all sovereign services)<br>Corporation • Provide efficient utility and other services to zone tenants<br>• Market the zone in integrated manner to local and international<br>investors<br>Private • Invest in enabling facilities (e.g. training, labor pool, etc.)<br>Developer(s)/ • Recommended to be a single private sector operator/developer to<br>Operator(s) achieve critical scale and higher efficiency<br><!-- End of picture text --> <!-- Start of picture text --> Private<br>Developer(s)/<br>Operator(s)<br><!-- End of picture text --> _Source: Fakhoury (2011)_ 22