This thesis investigates the fiscal and economic impact of Qualifying Industrial Zones (QIZs) on the Jordanian economy. In contrast to other studies, this study assesses costs and benefits of establishing such zones in Jordan. Fiscal as well as economic issues are investigated to clarify the impact of QIZs on the host country.This QIZ agreement pursued political aims more than broad economic goals, as QIZs were designed to ameliorate relations between Israel and Jordan. They were also expected to improve relations between Israel and other Arab countries through the cooperation required to get duty-free access to the USA market.Most countries consider special economic zones, such as QIZs, engines for growth, but empirical evidence from many countries in the world shows that the impact of various economic zones on growth is mixed. It has been assumed that QIZs play a significant role in increasing exports and earning foreign currency. However, ignoring the offsetting effects of imports is misleading. Depending heavily on an export-led growth strategy to stimulate and accelerate economic growth in the country should be viewed in light of increased imports of production inputs.The most important effects resulting from the establishment of QIZs are on employment and poverty. According to this analysis, QIZs contribute positively to the welfare of the poor in the country by increasing employment opportunities for unemployed and unskilled persons.QIZs prove ineffective at creating backward and forward linkages with the local economy.Although some effects may be observable, they are not necessarily large or immediate.Tax incentives are one of the main negative effects of the QIZs on the local economy, as they do not have much influence on investors and thus are a waste of resources. Other factors, like the economic and political stability and the quota and duty-free exports to the USA market, are much more important. The generous incentives that the country offers to attract investors Summary V should be connected to increasing levels and degrees of technological sophistication of the products.As a result of this thesis, a set of policy options were derived. Economic data about the QIZs are impressive, but improvements in political relations are far less so. The history of QIZs was found to be a mixture of failures and successes. It is important to take the actual political situation of the country into account before establishing such zones. The concept of these zones is complex policy instrument to be used in a time of regional conflicts as is the case now. It is more important to establish these zones according to the needs of the country.Establishing QIZs might benefit some areas, but it takes a long time before the gains are visible throughout the whole country. In conclusion, QIZs are but one policy to be considered and the government must still try to find alternatives that better suit the needs of the country. Furthermore, in the absence of the role of tax incentives in the investors' decisions, the QIZs should n...
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.