FTZ Lifecycle Development in Malaysian Industrialisation

Abstract

It is widely acknowledged that Free Trade Zones (FTZs), or Export Processing Zones (EPZs), have stimulated the export-oriented industrialisation in many developing countries. This study examines Malaysian government industrial policy in relation to FTZ development, which is often considered successful. Malaysian government has long been highly active to conduct industrial policy in which a number of incentives and requirements are provided. FTZ lifecycle approach is proposed to evaluate the policy effectiveness. The policies are highly successful in attracting a number of large transnational corporations (TNCs); however, there is little evidence to conclude that policies to support local suppliers have been helpful.