After a challenging start, the TEDA zone in Egypt now appears to be gaining traction. By 2013, 49 companies have signed contract and 38 are operational, with a total investment of $358 million, and around 1,000 local employees. Banking, catering and customs clearing facilities are available in the zone. Current companies include some selling into the local market, some exporting back to China, and others serving thirdcountry markets. Key success factors are as follows:

**_Experienced partner on the Chinese side:_** While many of the Chinese zones in Africa are led by infrastructure companies, the Egyptian zone is led by TEDA, which is China’s first provincial-level SEZ and currently the largest multi-industry, economic-technology development area in China.

**_Properly structured joint ownership with active local partners:_** While Chinese ownership accounts for at least 75 percent of the project, Egyptian partners have active interest, include banks and state-owned enterprises (SOEs).

**_Clear management and regulatory structure in place:_** There is: (i) a tiered management structure, with an informal high level joint China-Egypt Task Force for the Suez Economic Zone; (ii) an Egyptian SEZ Authority for the zone that operates under the Prime Minister; (iii) a licensed joint-venture―Main Development Company (MDC)―with authority to develop the zone; and (iv) a development company (Egypt TEDA) that executes what has been licensed to the MDC.

**_Active joint marketing:_** Tianjin Municipality supported the State-owned Assets Supervision and Administration Commission (SASAC) to promote SOEs to invest in the zone. TEDA also formed the China-Egypt Commercial Association in Suez that organizes market information seminars and participates in large-scale trade fairs. The Egypt General Authority for Free Zones and Investment (GAFI) and the General Authority for the Economic Zone North-West Gulf of Suez also market the SEZ.

**_Clear legal framework on use of local labor and suppliers:_** Egypt has a clear regime for foreign labor: one foreign employee is allowed for every nine Egyptians employed. The first stage of the TEDA zone has more than 1,800 local workers of which less than 5 percent are Chinese. The general contractor for the zone is an Egyptian company and some of the construction work was subcontracted to local Egyptian companies.

_Source:_ Bräutigam and Tang 2010, 2013.

In conclusion, the concept of SEZ and its impact on economic growth is gaining more and more acceptance globally and the instrument has been widely applied. However, the mixed results of SEZ development in different continents/countries show that it is not a panacea and has to be implemented properly and carefully tailored into a country’s specific situations. It is not necessarily a suitable instrument for any country. Given the complex and heterogeneous environments in which zone programs are implemented, it would be useful to establish a clear framework to guide the operations of SEZs in countries where they are deemed relevant. Such a framework may include the following elements (Farole 2011):

- Ensure that SEZ programs are focused where they can best complement and support comparative advantage, as validated through a detailed strategic planning, feasibility, and master planning process.

- Integrate SEZs as part of a broader package of industrial, trade, and economic development policies.

- Integrate SEZs with support to existing industry clusters rather than as an alternative or greenfield approach to cluster development.

- Ensure high-level political support and broad commitment—including the establishment of an interministerial committee to oversee program development—before launching any program.

20