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Idea: "Country-in-a-country" special economic zone

The reason for outsourcing is usually cheaper labour costs.But the people who are doing this work are actually having a good quality of life. Because in real terms even though their wages are lower ( eg: in Bengaluru, India) compared to a developed country ( eg:USA), the cost of living is lower as well. At same time jobs are lost in USA. If americans unemployed due to outsourcing can go and work in India they have beter quality of life. But this is always not possible ,due to family commitments , distance etc.

My proposal is special economic zone similar to Charter city , but in reverse. This will be in a developed county ( Say USA). To start with set aside a few thousand hectares of land in say florida for this economic zone - call it CIC ( country in country). It will be a replica of eg: Bengaluru. It will have offices, houses,schools, health care , shopping , entertainment , banks etc. The crucial issue it will have indian rupee as currency. With all these similar to the Indian city , the cost of living and working should be on par with Bengaluru. Now companies can establish call centres in these CIC zones. The pay for call centre operatives will be same as in Bengaluru and paid in indian rupees. So from the company's point of view this call centre on american land costs the same as if it were to be in India.

But the people employed here will be americans who chose to move to this mini India in USA. They have jobs, relatively good earnings as cost of living is less with all amenities. Most people would stay and work in this CIC zone say for one or two years and then move on to jobs in america.
It is bringing american jobs to america while maintaining standard of living and cutting through the barriers of currency exchange rate etc.

It appears to be a win win situation.

But I have a feeling that there must be a fundamental flaw in this idea. I hope somebody who knows these things will be able to point it out.
thanks

Topics: economics society
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  • Nov 19 2012: It is a noble idea and a very good one to kick start a discussion.

    Apologies for pointing the negatives. But it is impractical purely for the very reason of its establishment - the ECONOMIC one. It will cost a lot more to replicate a city in a developed country than a developing one.
    The scenario under consideration is too narrow - using a singular outsourcing issue from a particular country. As this would mean creating many different CICs for each outsourcing issue (eg. China for mfg, etc.)
    Also, will these SEZ areas be dynamic as to adopt other currencies as other countries come up with cheaper and better solutions/services in future (eg. Vietnam, Myanmar, etc.).
    Then there is this whole arena of Political Will and considering soft costs (eg. environment pollution control costs, parallel economy costs, etc.)

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