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What is the true goal of special economic zones in semi-periphery and periphery countries?Responsesto attract foreign investments from core countriesto attract foreign investments from core countriesto give tax breaks to multinational corporationsto give tax breaks to multinational corporationsto quickly shift from the secondary to tertiary sectorto quickly shift from the secondary to tertiary sectorto provide more infrastructure to multinational corporations

Question

What is the true goal of special economic zones in semi-periphery and periphery countries?Responsesto attract foreign investments from core countriesto attract foreign investments from core countriesto give tax breaks to multinational corporationsto give tax breaks to multinational corporationsto quickly shift from the secondary to tertiary sectorto quickly shift from the secondary to tertiary sectorto provide more infrastructure to multinational corporations

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Solution

The true goal of special economic zones in semi-periphery and periphery countries is multifaceted.

  1. Attract foreign investments from core countries: Special economic zones (SEZs) are often established with the aim of attracting foreign direct investment (FDI). By offering incentives such as tax breaks, simplified customs procedures, and less stringent regulatory measures, these zones can be more attractive to foreign investors.

  2. Give tax breaks to multinational corporations: One of the main incentives offered by SEZs is tax breaks. These can take various forms, such as reduced corporate tax rates, exemptions from import and export duties, and other fiscal incentives. The aim is to make the SEZ a financially attractive place for multinational corporations to do business.

  3. Quickly shift from the secondary to tertiary sector: SEZs can also be used as a tool for economic transition. For example, a country might use an SEZ to shift its economy away from traditional industries (secondary sector) such as manufacturing, towards more service-oriented industries (tertiary sector) such as finance, technology, and retail.

  4. Provide more infrastructure to multinational corporations: In addition to fiscal incentives, SEZs often provide enhanced infrastructure, such as improved transport links, reliable utilities, and high-quality office and factory space. This can make it easier for multinational corporations to set up and operate their businesses in the SEZ.

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These countries exhibit characteristics of both core and periphery. They may have some developed industries, but also rely on resource extraction and cheap labor.

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