Special Economic Zones in the Indonesia-Malaysia-Thailand Growth Triangle: Opportunities for Collaboration

Since its inception in 1993, the Indonesia–Malaysia–Thailand Growth Triangle (IMT-GT) subregional program has attained remarkable economic growth and shared regional prosperity through concerted policy interventions. Yet, there is a mismatch between the actual achievements and declared objectives. To address this gap, a high priority is given to the development of regional and cross-border production networks using special economic zones (SEZs), special border economic zones (SBEZs), and other production sites as the key tools. The expert report authored by Aradhna Aggarwal and commissioned by the Asian Development Bank (ADB) takes stock of the IMT-GT SEZs and other economic zones, reviews the extent to which these are integrated into national development agendas of the member states, reviews their performance, identifies challenges, and offers recommendations for policy makers to support their active clustering and specialization efforts in the subregion. The study makes three major contributions to the existing literature on economic zones, particularly SEZs. First, it harmonizes the data on economic zones in the IMT-GT member countries. Second, it develops a framework to assess the mainstreaming of the subregional agenda into national and subnational development agendas and proposes a strategy to implement it successfully. Third and most important, it proposes a strategic framework for the success of economic zones in the subregion. While doing so, it underlines the relevance of the collaborative approach for the subregional economic zones and highlights how the outbreak of the COVID-19 pandemic has further underscored the need for the collaborative approach to economic zones.