FAA and Port of Seattle: Leading Us in a Global ‘Race to the Bottom’

Rose Bridger’s latest paper takes a close look at Special Economic Zones (SEZs). Practically speaking, SEZs are an evolved form of entities such as the Port of Seattle, which was a special authority created by the state of Washington, when the Port District Act was passed back in 1911. These entities are designed to empower players who are wealthy and politically connected, while also insulating these players from both accountability and transparency. SEZs are typically supported by governments, and these days often are done in ‘public-private partnership’ with multi-national corporations.
SEZs generally subsidize the major players with:

  • …use of state authority to sieze lands – frequently productive farmland; this is part of the global land-grabbing phenomenon that is displacing rural and indigenous people.
  • …public funding of infrastructure, including airport construction, utilities and surface transportation networks.
  • …allocation of land and other essential resources; and,
  • …of course, generous tax breaks.

Across the globe, thousands of airport-linked SEZs have been developed. These are a form of deregulation targetted at benefitting big-business, and they frequently seed rampant cronyism. The rates and laws within SEZs differ from the surrounding areas; tax breaks and other incentives aim to narrowly benefit investors, while simultaneously aiding the incumbency of elected officials. However, due to weak linkages with the host economy, the benefits of SEZs often fail to extend beyond the boundaries of the designated enclaves. Also, foregone tax revenues put a strain on local government coffers. Non-resident investors take advantage of these tax breaks, but often eventually relocate to alternative sites offering even more generous perks. When this happens, the SEZs languish as useless white elephants. And the impacts upon local residents tend to be negative and extreme: destroyed communities, blighted ‘noise ghettoes’, sleep loss and stress, and diminished health caused by aviation air pollution.

Here’s a PDF copy of Rose’s latest paper (23-pages):

Click on the image below for a scrollable view; the PDF file may be downloaded.

In her conclusion, Rose notes:

“New airport linked economic zones bring the short-term certainties of massive government expenditure on infrastructure and lucrative contracts for construction firms….”
“Airport-linked economic zones accelerate the global ‘race to the bottom’ by providing geographically defined areas where deregulation and tax breaks, to serve the interests of big business, are maximised. The new economic zones must also be viewed within the context of broader economic justice concerns of tax breaks for aviation set to benefit investors, in particular the almost universal tax exemption of aviation fuel for international flights. Allocation of land assets to airports for generation of non-aeronautical revenue is another form of subsidy. Monetisation of airport land banks is accelerating worldwide as aerotropolis style development gathers pace.”