Economic and social impact of export processing zones: the case of Malaysia

Multinational Enterprises Programme Working Paper No. 66

Export processing zones (EPZs) or free zones as they are called in Malaysia have played an important role in promoting manufactured exports. The Malaysian Government enacted the Investment Incentive Act in 1968 to promote the growth and development of labour-intensive export-oriented industrializaton. However, it was not until 1971 that the Free Trade Zone Act was passed to create EPZs, which were especially attractive to foreign investors.