The political deviation or aberration represented by U.S. President Donald Trump’s proposal to establish an economic zone in southern Lebanon bears no resemblance to the concept of border economic zones—the subject of this article—neither in definition, objectives, nor any of their features and characteristics. The zone proposed by Trump is nothing but a disguised and falsified attempt to occupy a cherished part of Lebanese territory. In contrast, a Shared Border Economic Zone (SBEZ), by definition, is bilateral or multilateral, established along the shared geographical border between two or more states, which requires consensus, partnership, trust, and cooperation—none of which exist between Lebanon and the Israeli enemy. Therefore, let us set aside this political-economic sophistry and focus instead on the accurate definition and developmental dimension of joint border economic zones, in terms of their true definition and actual reality.
In the midst of the madness of the bloody international game of nations – with its rapidly globalizing system from “A to Z” – the key players who shape the world’s economic decisions are keen to protect their economic interests and preserve their inherited international influence. This influence manifests either in shaping global policies or in determining the level of societal welfare and destinies, according to a meticulously crafted plan that adjusts continuously to the balance of circumstances of each phase and the requirements of every era.
Based on this fixed international reality and guided by the dynamics of investment flows within the global economic landscape, the approach to “borders” has changed – especially over the past decade – acquiring new developmental dimensions in their broad holistic sense. This transformation has made borders a focal point for international investments and partnerships. It is no exaggeration to say that borders have become – whether intentionally or unintentionally, despite the fierce struggle of “interests” and competition in “engineering” international influence – a “link” rather than a “divide” between geographical regions and contemporary economies. Borders have become a “safe haven” for pioneering forward-looking visions, mobilizing funds, fostering youthful innovations, uniting skilled efforts, refining competencies, facilitating dialogue among diverse cultures and civilizations, and enabling the coexistence of societal concepts and beliefs. Ultimately, these convergences align with the desired global consensus to achieve the Sustainable Development Goals agreed upon internationally since 2015.
One of the initial signs of this transformation is what has come to be internationally known as the “Special Border Economic Zone” (SBEZ), which constitutes one of the instruments of international connectivity within the family of Special Economic Zones. Classified as “bilateral project hubs” located along the borders between states, these zones target a set of activities aimed at enhancing the economic development of border areas as part of a regional development strategy—particularly focusing on infrastructure development, facilitation of logistical services, and easing trade and investment, ultimately establishing bilateral relations between border cities. Consequently, their legal and economic frameworks are distinguished by more precise and robust regulatory provisions and logistical requirements compared to the general framework governing the “parent” Special Economic Zones, especially in terms of governance and infrastructure – both economic and social – thereby strengthening the desired guarantees for both the inhabitants of the border regions on one side and local and international investors on the other.
A careful observer of the international landscape is inevitably struck by the numerous international experiences in this field. We have found it useful to briefly present some of these in the second and third parts of this article, within the limits permitted here, as they represent exemplary models for nations aspiring to live in a world of growth and progress rather than on its margins. We have various objectives in presenting these models, which we will detail in the conclusion.
However, before we explore the Asian continent (Part Two) and then delve into the Gulf experience, finally arriving in Lebanon – the heart of the matter and our concluding destination (Part Three) – we begin in this first part by defining the concept and structure of shared border economic zones.
First: Distinction Between Traditional Special Economic Zones (SEZ) and Border Economic Zones (SBEZ)
Special Economic Zones (SEZ) are typically established within countries, near ports or major cities, with the aim of stimulating investment through tax incentives and advanced infrastructure. In contrast, Border Economic Zones (SBEZ) are inherently bilateral (or multilateral) and located along the shared geographical borders between two or more states.
This border dimension imposes certain specificities, the most prominent of which are:
- Joint or coordinated management across sovereign borders;
- dual infrastructure enabling the connection between transportation and trade networks of both countries; and
- special laws that take into account the duality of legislations and judicial systems.
Thus, Border Special Economic Zones (SBEZ) transform from mere economic projects into political-developmental-social instruments, carrying within them opportunities for integration as well as risks of tension.
There is no doubt that the success of this type of economic zone depends on its ability to provide an integrated logistical network, as no border zone can thrive without equipped crossings and advanced infrastructure that allow the smooth flow of goods and people, alongside maritime and air ports that open horizons and skies.
Hence, it is also important to link Special Economic Zones with main production centers so that they become a link in the supply chain and maximize the benefits of digital transformation. Some countries have begun moving towards the concept of Smart Border SEZs, where artificial intelligence and blockchain technologies are used to accelerate customs procedures and ensure transparency.
Second: The Drivers Behind the Establishment of Border Economic Zones (SBEZ)
Border Economic Zones are neither an isolated concept nor a luxury endeavor; rather, they are directly aligned with the United Nations 2030 Agenda for Sustainable Development. Specifically, they contribute to Goal 8 (decent work and economic growth) by creating employment opportunities and productive activities; Goal 9 (Industry, Innovation, and Infrastructure), through the development of transport networks and modern border crossings; and Goal 17 (Partnerships for the Goals), as they embody bilateral or multilateral cooperation frameworks.
Nowadays, countries are increasingly moving toward the establishment of Border Special Economic Zones for various reasons, all revolving around the pursuit of economic and social prosperity for their populations. This does not exclude the security and political dimensions, which form the twin pillars of stability. In this context, we highlight some of the key motivations driving the creation of shared border economic zones:
- Balanced Development. Border regions are often economically lagging compared to capitals and central hubs. Establishing an SBEZ implies transferring part of the development process to peripheral areas and generating local job opportunities.
- Facilitating Cross-Border Trade. Borders shift from being barriers or dividing walls to smooth gateways for trade and investment, reducing both transport costs and logistical timeframes.
- Regional Integration. In an increasingly bloc-oriented world, Border SEZs have become practical tools for fostering bilateral and regional cooperation. They help mitigate political tensions and establish mutual economic interests.
This naturally leads to a deeper look into the broader dimensions and incentives associated with such cross-border economic initiatives.
Third: The Economic, Social, Institutional, and Legal Dimensions of Border Economic Zones (SBEZ)
Border Economic Zones represent a multidimensional space, where the economic dimension cannot be separated from the social and institutional aspects. From an economic and financial standpoint, a wide range of incentives is typically offered, including tax, customs, and financial facilitations, with the aim of making these zones more attractive to both domestic and foreign capital. Due to their strategic location along borders, these zones become ideal environments for attracting Foreign Direct Investment (FDI), as they grant investors simultaneous access to two markets, thereby enhancing their competitive advantage. Moreover, these zones can play a pivotal role in reshaping regional supply chains, particularly in light of ongoing geopolitical crises that are redrawing the global trade map.
However, these zones are not limited to their economic dimension; any cross-border project is, by nature, also a social and developmental initiative. They contribute to creating new job opportunities for residents of border areas, thereby reducing the pace of internal migration and promoting local development. The success of such zones is measured by their ability to strike a balance between the needs of investors on one hand, and the needs of local populations on the other – whether in terms of services, infrastructure, or environmental protection. In addition, managing cultural and political sensitivities remains a delicate matter, especially in regions with a history of conflict or distinct national identities. It is essential to avoid the perception that such a project favors one side at the expense of the other.
As for the institutional and administrative dimension, it represents the greatest challenge in the implementation of Special Economic Zones. Typically, a bilateral joint council or authority is established to manage the project, which requires a coherent and well-structured governance model. These models vary between the creation of an independent authority with shared powers, or the adoption of separate management systems supported by continuous coordination mechanisms. In all cases, the effectiveness of the project depends on the existence of clear mechanisms for dispute resolution and the ability to overcome bureaucratic conflicts – safeguarding stability, ensuring transparency, and guaranteeing the sustainability of governance.
This brings us to the legal dimension, as the legal and regulatory frameworks are among the most complex and sensitive elements in any attempt to establish Border Economic Zones. The legislative models adopted vary from one country to another: while some states opt to enact special and comprehensive legislation specifically for these zones, others prefer to rely on bilateral agreements that govern operational and procedural details. Nonetheless, the challenges remain significant – chief among them are the duality of judicial systems, the divergence in commercial, tax, and labor laws between the two involved states, and the difficulty in establishing clear mechanisms for resolving cross-border disputes. Accordingly, it becomes essential for the legal framework to include robust guarantees for investors, such as legal certainty and legislative stability, while also safeguarding the rights and social and environmental interests of local populations.
Conclusion – Promises and Challenges
Ultimately, the ability of Border Economic Zones to endure and transform into genuine engines of joint development hinges on balancing their economic, social, institutional, and legal dimensions. These zones carry significant promises but are simultaneously fraught with complex challenges. If successfully managed, they can become a real added value: a lever for development, a laboratory for economic integration, and a source of political stability.
However, in the event of governance failure or the predominance of political calculations over economic considerations, these zones may turn into hotspots for conflict, corruption, or smuggling. Therefore, the success of such initiatives is not inevitable but rather a choice that depends on strong political will, a robust legal framework, and sound governance mechanisms.
In summary, we are facing a new concept that reshapes the relationship between states by transforming border areas from dividing lines into bridges of cooperation. In the following parts, we will review some Asian experiences (Part Two), then move to the Gulf model, before returning to Lebanon, where the project of the border economic zone with Syria raises sensitive questions about opportunities for success and risks of failure (Part Three and final).
To be continued…