The Chu Lai Open Economic Zone and Rural Development: Central Planning’s Laboratory for Policy and Institutional Innovation
The Chu Lai Open Economic Zone and Rural Development: Central Planning’s Laboratory for Policy and Institutional Innovation
June 14, 2013
This paper examines the experience of the Chu Lai Open Economic Zone in Quang Nam province to distill some lessons about the performance of EPZs as a policy instrument to stimulate rural development.
The paper argues that local officials have invested too much time and money in the attempt to attract foreign investors rather than concentrating on the domestic private sector. Although foreign investment is desirable, Quang Nam is more likely to emerge as a domestic business hub rather than a production location for major multinational corporations. Local government should focus on the essential task of helping the domestic private sector gain legal and affordable access to land and capital. In addition, the authors recommend further decentralization of authority to local government to enable Chu Lai to engage in policy experiments without the prior approval of central government authorities.