The effect of special economic zones on local economic development: a case study of Dube Tradeport’s agrizone.

Abstract

There have been long-lasting effects on the South African economy due to the history of widespread discrimination. As a result, the democratic government was burdened with periods of low economic growth, a fiscal deficit, spatial inequalities, high poverty levels and excessive unemployment. In an attempt to address these challenges, the democratic government-initiated policies aimed at improving economic growth, reducing poverty and creating job opportunities in order to improve the standard of living of South Africans. Placebased approaches focus on the individual characteristics of regions and their place specificity, and proposes to go beyond the one-size-fits-all development approaches. In this light, many local governments have introduced Local Economic Development (LED) programmes as it has been recognised globally for its presumed potential to address socioeconomic concerns and to promote development in local areas. It is within this context that spatial interventions such as Special economic Zones (SEZs) have gained prominence as key elements of the development terrain, as it can be used as an industrial tool for national development and support in underdeveloped regions. Dube TradePort (DTP), one of the two SEZs in KwaZulu-Natal, is a strategic infrastructure project. DTP is ideally located to attract new investment to the province, creates a highly competitive spatial and operational environment to accommodate international and domestic investment, particularly in manufacturing, assembly, and value-added logistics. the purpose of the study is to explore the contribution of DTP’s AgriZone to local economic development. This study adopts a qualitative approach. There have been 4 interviews conducted with the tenants and management at the AgriZone. The type of interview used for this study was semi-structured interviews. The supporting data was obtained from a site visit and various documents. The interviews were transcribed, and content analysis method was used in order to capture and study the main themes. The study revealed some of the challenges faced by the participants at the AgriZone. These include the adverse climate and ambient weather conditions in Durban, lack product acceptance by the local consumers, limited crop varieties supported by greenhouses, the design and location of the greenhouses as well as logistic challenges. The challenges in terms of exports included high international standards in terms of quality, high import tariffs and the increase in the number of countries that joined the EU, hence there was no need to import these goods from South Africa as it was more expensive and had a longer travel-time.