SEZ What ? - I

SEZ (Special Economic Zone) is the flavour of season.
Counteries who in past decades followed and (failed in the process) various shades of communism and socialism in order to create egalatarian society based on distribution of wealth have realized to some extent that "there is no such thing as free lunch" (or TINSTAFL as Robert Heinlein put).

The result is the rush to embrace globalization and foreign investment. It is in this context that SEZ are seen as vehicle of growth. I do not think that establishing SEZ is a particularly bad idea.
Developing counteries have a certain percentage among its intellectuals and decision makers which can only be called socialist baggage. Particularly in a country like India which is democratic (and therefore susceptible to blackmail by pressure groups) the concept of free markets can not be introduced all of a sudden, SEZ acts a carrier of capitalism and neutralizes the red elements. But it is here that for me the usefulness of SEZ ends, that is as more or less political instrument against entrenched socialism.

That is what worries me, while decision makers may have realized that socialism is not implementable, they are still afflicted by a more basic and serious delusion, which is that of central planning. Central planning is more basic because it appeals to the basic instinct of domination, the obvious implication to central planning is that there are some guys who know better and hence economic activities is best left to their judgement. During the halcyon days of socialism these wise guys decided what should be the quota for scooters, what should be the quota for cement. Now these wise guys decide which areas should be marked as economic zone.

Therefore for them SEZ is not a tool but a policy, extent of central planning might have diminshed but it still remains bedrock of economics in India.