on the chinese miracle:
If real wages and the share of wages in national income have fallen sharply in recent times, and if inequalities have risen dramatically at the same time, the answer to the riddle lies in this quiet accretion, cashed in on by China-based corporations who have set the pace. The logic of capital has inveigled the entire world into a race of totalitarianisms--which inevitably enrich the few and pauperize the many in every country.
(...) Democracy is a nuisance for capitalism. The success of China should demonstrate even to the most ardent of liberals that capitalism works most efficiently under despotic conditions. If capitalism coexisted with democracy in the Western world for some decades, the rise of China shows it up for what it was: a coincidence of history brought into relief by the fight for freedom and human rights by large sections of the working population of the West since the early days of 19th century British Chartism. The gains of working classes were consolidated by the institutionalization of the welfare state since Bismarck's Germany first brought in social legislation in the 1880s. They took a big step forward with the implementation of Roosevelt's New Deal in the US in the 1940s. Much of this was made possible, needless to say, by the spoils of war and imperialism, which enabled Western elites to maintain labor aristocracies within their own geographical boundaries. A prosperous domestic social peace was arranged on the ample backs of Third World super-exploitation of labor--and maintained internationally through arm-twisting "multi-lateral" agencies like the IMF, the World Bank, GATT and the WTO.
(...) What history is revealing now is something altogether different: that far from being the precondition for political freedom, capitalism may be the growing thorn in the flesh of democracy, a thorn that democracy nourishes in the very core of its body-politic, a juggernaut of tyranny, remorselessly hungry for power both within and outside the country, without which its appetite for profits, growth and expansion cannot be met. As capital has had to bare its fangs, the dove of freedom and democracy has flown out of the window.
(...) To subscribe exclusively to the growth imperative is to be necessarily forced to sideline all other social or political goals and sign on to the charter of (global) corporate tyranny. The private interest--the hunt for ever higher profits, justified by the promise to grow, invest and employ--is the public interest. No need to distinguish between the two any more. Thus, unsurprisingly, as the unfolding logic of capital has revealed its despotic character, even liberalism has lurched feebly towards a quiet grave.
(...) To keep the World Bank happy the government has to open the door to "development" projects of doubtful social value and destructive environmental effects. To find the ear of the WTO it has had to sell the rural poor down the river, allow subsidized Western imports of foodgrains, remove price supports for farmers and dismantle the public distribution system, thus (especially given the collapse of rural public investment in infrastructure, one of the consequences of IMF-diktat) making it ever more likely that more and more people will find agriculture an unviable option over a period of time--and will be willing to sell their land to corporations or the government.
(...) "When I expand, it is always in a capital-intensive, and not in a labor-intensive direction." - Dinesh Hinduja, to Edward Luce of The Financial Times.
(...) That employment in India was growing more rapidly in the 1980s, when the economy was growing much more slowly than it is today, is of little account. That the entire private organized sector of the economy has generated fewer than a million jobs during the past 16 years (and still employs less than 9 million people), when over 12 million people are getting added to the Indian workforce every year should make our policy-makers worried whether we will be a sustainable society at all in the future--whether we will not dissipate ourselves in a welter of frustrated social violence, the kind that Star TV had the misfortune of experiencing in Mumbai the other day. None of this seems to alarm them.
(...) 22-year-olds fed on the dreams of unabashed consumerism are not going to sit idly and watch the rich race past in their speeding cars. Thus, it was not surprising when an ex-Union Minister was so taken by a 2000 visit to Shenzhen, China, where a Special Economic Zone has generated huge amounts of unprecedented wealth during the past generation. 20-30% has been the annual rate of growth, sustained over a quarter century. Over 10 million people have found employment in an area the size of Jaipur. The city has generated 14% of China's exports. [BUT...] among Chinese economic planners, Shenzhen's recipe is increasingly seen as all but irrelevant: too harsh, too wasteful, too polluted, too dependent on the churning, ceaseless turnover of migrant labor. "This path is now a dead end," said Zhao Xiao, an economist and former adviser to the Chinese State CouncilAfter cataloguing the city's problems, he said, "Governments can't count on the beauty of investment covering up 100 other kinds of ugliness." As the limits of the Shenzhen model have grown more and more apparent, other cities in China's relatively developed east are increasingly trying to differentiate themselves, emphasizing better working and living conditions for factory workers or paying more attention to the environment. "Some inland cities have started to provide migrants social security, including pension and other insurance," said Wang Chunguang, an expert in class mobility at the Chinese Academy of Social Sciences in Beijing. "In Chengdu, in Sichuan Province, residency controls are loosening up and education for migrant children is getting more attention."
(...) The province of Guangdong, where Shenzhen is located, recorded 10,000 protests last year--in what is known to the world as a totalitarian society.
(...) The answers are to be found in the peculiarities of the Indian situation and the utterly odd world in which our corporate and policy-making elites find themselves today. The economy has been growing at a internationally impressive 8-9% for about 5 years now. ... However, there is immense corporate frustration--still--right here at home in India. Some of the cheapest labor in the world is at their command. And yet, because of the inconvenience of democracy they can't be hired and fired in sync with the impulses of the business cycle, as it happens in China. Some of the most readily accessible natural resources are at their disposal. Except that there is the nuisance of bureaucracy in the shape of clearance of industrial projects by pollution control boards and the Union Ministry of Environment and Forests. They have firm control over the hearts and minds of politicians. But, from their point of view, there are still too many taxes to be paid. There is infrastructure in the country, but it is either in the city and already burdened or it is near fertile agricultural land (and must be somehow acquired: the reason that the conflict between agriculture and industry is arising in SEZ land acquisition in the first place). And so on.
(...) SEZs offer a relief from this entire nettle of hurdles. All that can't be attempted in the civilized world outside will be the norm in SEZs. American corporations routinely abuse labor and the environment in Shenzhen in ways unacceptable to the Western world (though no one seems to mind the cheap shoes and clothing). In India, SEZs will provide a profitable refuge from the Indian Constitution, an effective waiver from democracy. The Development Commissioner and the SEZ Authority will have overwhelming powers, making local, provincial, national and international laws all but irrelevant. "Little Chinas" and Shenzhens can be developed.
(...) What else does it mean? Recent concessions (like the liberalization of foreign direct investment in real estate), the rush of builders and developers to acquire SEZ land, the fact that only 50% of the area under an SEZ has to be dedicated to processing (whose definition is stretched liberally to include everything from mining to agriculture), the fact that industrialists are all too often being granted land well in excess of their production requirements (whether Tata in Singur or Reliance in Dadri) all point in the direction of an engineered real estate boom through SEZ growth. Huge amounts of capital are pouring into the real estate market, both from within India and abroad. Returns of 30, 40, even 100 per cent in many segments of the market are becoming common--making Indian real estate markets one of the most attractive places anywhere to invest for global finance capital.
(...) With private airports, luxury housing, super-deluxe hotels, world-class shopping malls and multiplex plazas, SEZs offer us a window into the world of corporate consumer dreams. They also portend the end of effective democracy in this country. The surrounding sea of human misery and squalor is bound to give rise to repeated and violent rebellions. Which is why the private armies of security guards are being trained and readied for approaching inevitabilities.
(...) There are a thousand alternatives to this impasse. But to discover them and forge the collective imagination and will to develop them in practice will require a thriving public culture of democracy--precisely that which SEZs are being created to undermine. Globalization, far from bringing freedom to the world, is taking it away--in the name of freedom.
Showing posts with label maquila. Show all posts
Showing posts with label maquila. Show all posts
Monday, April 23, 2007
Friday, April 20, 2007
from envio, january 2002:
[trickle down] The most defined feature of the new government’s economic design is that the motor force of economic growth during its five-year term will be large-scale foreign investment, followed by national private business investment. This growth strategy is based on the very traditional idea that the benefits of the big investments will trickle down to the others.
(...) These two investments reflect the new government’s priority areas: tourism and the assembly plants known as maquiladoras, which process imported materials for re-export and are exempt from import and export taxes. The latter will be given particular priority because this type of operation seems to be of greatest interest to the investors currently sniffing around.
(...) [employment] With all polls showing unemployment as the social problem most affecting the population over the past decade, Bolaños’ campaign promise to create new jobs sparked particularly high expectations. Like its predecessor, the current government is counting on the maquila industrial parks—commonly referred to as free zones—as the quickest way to mass-create the longed-for jobs. Indeed, when Alemán took office, around eight thousand people were employed in the maquiladoras; today, according to the Central Bank, that figure has climbed to nearly forty thousand. Nonetheless, his seemingly exclusive reliance on big investors is questionable considering that small urban and rural businesses still provide the bulk of Nicaragua’s jobs and the government has no clear plan for this sector.
(...) Bolaños is offering investors two advantages. The first is competitive prices—"starting with the cost of our labor force," to use his words. The second is security, at least compared to most of the other Central American countries vying for tourists and maquila investors. In his opening speech at the investment forum, Bolaños told the audience that "Nicaragua is a safe country, its people very warm and welcoming. We have one of the lowest crime rates in Latin America, and the public safety we can offer today is the envy of our neighbors north and south. There are no kidnappings or violent crimes against tourists or investors here, and the tourists who come don’t have to listen to special instructions about security beyond the dictates of common sense."
(...) [the future of agriculture?] The most noteworthy aspect of this government’s economic strategy is that agriculture, for nearly two hundred years the kingpin of the national economy and the source of the new President’s own wealth, has been left in the dust. It seems to be viewed as a problem rather than a solution, a sector that drags on the economy rather than driving it forward.
(...) [credit] In Nicaragua, private commercial banks do not work with the rural productive sectors. The bulk of their credit portfolios is dedicated to financing consumption. An individual can easily get a loan to buy one of the plethora of luxury 4-wheel-drive vehicles clogging Managua streets today, but faces often insurmountable obstacles when applying for a loan to plant papayas for export. Around five years ago, the World Bank set up a program to extend private banking services to the countryside, providing a US$30,000 subsidy to the banks for each branch they opened in rural areas. The banks jumped at the offer, but did precisely the opposite of what the World Bank intended: they used these branches to attract the savings of the rural population and thus increase their capacity to finance consumer loans in the cities, providing no credits for any rural productive activities.
(...) [strategy for poverty] If very few resources have been invested in the productive sector in the past decade, the Poverty Reduction Strategy, now an official World Bank-approved document that the new government is committed to implement, does not appear particularly concerned with production either, mentioning it only in very general terms. The strategy’s main objective is to create a social safety net that will use subsidies to alleviate (not reduce) the poverty of the most vulnerable population. The strategy does not propose incorporating the poor into the national economic project. Based on a very traditional mentality, it assumes that the poor will automatically be pulled in as the large, modern sector of the economy grows.
(...) [on GDP] In 1990, the annual per capita GDP was equivalent to US$454. Today it is US$484. In other words, eleven years after the war, during which Nicaragua has been receiving an annual average of US$500 million in foreign cooperation, the income of each Nicaraguan has only grown US$30! If that is not shocking enough, it must be remembered that this figure only expresses a mathematic or artificial reality, homogenizing the head count of not only both babies and the retired, but also the very rich and the very poor. It in no way reflects real income distribution, which is profoundly inequitable in Nicaragua and becoming more skewed with every passing day.
(...) [poverty] International analysts calculate that a country’s economy must grow at least 7% a year to effectively reduce that country’s poverty. During the reactivation period of the past seven years, Nicaragua’s economy grew an average of 4.5% annually.
[trickle down] The most defined feature of the new government’s economic design is that the motor force of economic growth during its five-year term will be large-scale foreign investment, followed by national private business investment. This growth strategy is based on the very traditional idea that the benefits of the big investments will trickle down to the others.
(...) These two investments reflect the new government’s priority areas: tourism and the assembly plants known as maquiladoras, which process imported materials for re-export and are exempt from import and export taxes. The latter will be given particular priority because this type of operation seems to be of greatest interest to the investors currently sniffing around.
(...) [employment] With all polls showing unemployment as the social problem most affecting the population over the past decade, Bolaños’ campaign promise to create new jobs sparked particularly high expectations. Like its predecessor, the current government is counting on the maquila industrial parks—commonly referred to as free zones—as the quickest way to mass-create the longed-for jobs. Indeed, when Alemán took office, around eight thousand people were employed in the maquiladoras; today, according to the Central Bank, that figure has climbed to nearly forty thousand. Nonetheless, his seemingly exclusive reliance on big investors is questionable considering that small urban and rural businesses still provide the bulk of Nicaragua’s jobs and the government has no clear plan for this sector.
(...) Bolaños is offering investors two advantages. The first is competitive prices—"starting with the cost of our labor force," to use his words. The second is security, at least compared to most of the other Central American countries vying for tourists and maquila investors. In his opening speech at the investment forum, Bolaños told the audience that "Nicaragua is a safe country, its people very warm and welcoming. We have one of the lowest crime rates in Latin America, and the public safety we can offer today is the envy of our neighbors north and south. There are no kidnappings or violent crimes against tourists or investors here, and the tourists who come don’t have to listen to special instructions about security beyond the dictates of common sense."
(...) [the future of agriculture?] The most noteworthy aspect of this government’s economic strategy is that agriculture, for nearly two hundred years the kingpin of the national economy and the source of the new President’s own wealth, has been left in the dust. It seems to be viewed as a problem rather than a solution, a sector that drags on the economy rather than driving it forward.
(...) [credit] In Nicaragua, private commercial banks do not work with the rural productive sectors. The bulk of their credit portfolios is dedicated to financing consumption. An individual can easily get a loan to buy one of the plethora of luxury 4-wheel-drive vehicles clogging Managua streets today, but faces often insurmountable obstacles when applying for a loan to plant papayas for export. Around five years ago, the World Bank set up a program to extend private banking services to the countryside, providing a US$30,000 subsidy to the banks for each branch they opened in rural areas. The banks jumped at the offer, but did precisely the opposite of what the World Bank intended: they used these branches to attract the savings of the rural population and thus increase their capacity to finance consumer loans in the cities, providing no credits for any rural productive activities.
(...) [strategy for poverty] If very few resources have been invested in the productive sector in the past decade, the Poverty Reduction Strategy, now an official World Bank-approved document that the new government is committed to implement, does not appear particularly concerned with production either, mentioning it only in very general terms. The strategy’s main objective is to create a social safety net that will use subsidies to alleviate (not reduce) the poverty of the most vulnerable population. The strategy does not propose incorporating the poor into the national economic project. Based on a very traditional mentality, it assumes that the poor will automatically be pulled in as the large, modern sector of the economy grows.
(...) [on GDP] In 1990, the annual per capita GDP was equivalent to US$454. Today it is US$484. In other words, eleven years after the war, during which Nicaragua has been receiving an annual average of US$500 million in foreign cooperation, the income of each Nicaraguan has only grown US$30! If that is not shocking enough, it must be remembered that this figure only expresses a mathematic or artificial reality, homogenizing the head count of not only both babies and the retired, but also the very rich and the very poor. It in no way reflects real income distribution, which is profoundly inequitable in Nicaragua and becoming more skewed with every passing day.
(...) [poverty] International analysts calculate that a country’s economy must grow at least 7% a year to effectively reduce that country’s poverty. During the reactivation period of the past seven years, Nicaragua’s economy grew an average of 4.5% annually.
from envio, september 1992:
Everyone recognizes that this poor showing is primarily due to the country's high degree of instability, but not all sectors agree on what causes that instability. The government and the right wing lay the blame on rebellious Sandinista workers and armed rural groups of impatient and battle-hungry former soldiers. But they do not admit that behind these rebellions lies the government's own economic plan, which is driving these sectors to desperation.
(...) [investment] Some say that foreign investment is good in and of itself: the capital it brings to the country can help in times of crisis of domestic capital; it offers new jobs; and it can bring new technology. But the history of Nicaragua's Atlantic Coast demonstrates the weakness of these criteria. For many years, the coast was at the mercy of foreign companies that exploited the region's natural resources, plowing nothing back into the local economy, then simply picked up and left when the resources were exhausted.
(...) Governments want to attract investment because it will supposedly bring foreign exchange into the country. But this is not guaranteed unless the government takes care to do so: in many cases, investors simply borrow money from the recipient country to build or buy their assets. In addition, there should be control over the repatriation of capital. Nicaragua's law—which curiously only applies to those who choose to accept the rights and obligations it stipulates—allows capital repatriation after three years.
(...) What would be a good investment? On the one hand, raw materials extracted from Nicaragua should not be exported as such; the industry that processes those materials and increases their value should also be located in Nicaragua. And industry, on the other hand, should acquire the majority of its inputs from raw materials produced or extracted in Nicaragua. Instead of operating in isolated enclaves, such integration of economic processes, from raw material extraction to industrial processing, would tie each individual production process into others, producing a multiplier effect in the economy. This means, for example, that cotton itself should not be exported, but that cloth, thread and even clothing should be produced here and exported; and an industry that produces clothing should not import cloth or cotton but purchase its inputs from local producers.
(...) [on a violent culture?] Instability is not caused by those who protest; protest is a predictable response to instability. If the government and big business insist on blaming the Sandinistas for the results of their own policies, they should be more accurate: the FSLN played an important role in heightening the people's capacity to protest in an effective organized fashion. Since Nicaraguan officials often cite Chile as this government's model for economic policy and growth, perhaps they see the "problem" in attracting investment here as simply the lack of an ironhanded Pinochet.
(...) [FTZ at this time] the cost of renting space in the zone is cheaper here than in Honduras; workers' wages are much lower here than in Costa Rica; and Nicaraguan workers have a reputation for being more productive than either Honduran or Costa Rican workers. Zamora also mentioned that problems with electric power in the Dominican Republic are even greater than in Nicaragua. ... The six existing companies together occupy 25,000 square meters, almost all the space currently available. Only 26% of the 57-hectare industrial park has been constructed. New construction and remodeling, which will be undertaken with a $7.6 million loan from the Inter-American Economic Integration Bank, will bring the total to about 35%. The National Penitentiary System, says Zamora, has agreed to abandon the 8,600 square meters within the zone that it is currently using as a prison by the middle of this year.
(...) This means that maquila industry, as a whole, has very contradictory consequences—it can offer jobs where there are none, yet, by nature, it works against any improvement in workers' wages. The Costa Rican example also demonstrates how easily it can pack up and move on if it gets better "advantages" elsewhere.
In addition, investors in maquila prefer authoritarian governments where there are no unions or they have no power. None of the three private companies in the Free Trade zone has a union. Though Latino said that he would accept any "reasonable" workers' organization in Crecen, he had previously referred to workers interested in forming a union as "rebels," who, according to him, "left on their own."
(...) [skills] Zamora also claims that maquila plants will bring free worker training in new technologies and the transfer of technology to Nicaragua. This, however, is a somewhat absurd assertion. Maquila plants by definition only do piecework—one small part of an assembly process—in the host country. If workers learn a new skill, it is one with very limited use, as is any new technology that an industry would import.
(...) [question of integration] Zamora also asserts that over time there will be "vertical integration" with the local economy, that is, that the maquila plants will begin to purchase some part of their inputs from the domestic market. But while this is true in a few cases, there is no vertical integration in the vast majority. Purchasing inputs from the local economy could interfere with mobility, and the very nature of maquila plants is that they are highly mobile enterprises. If conditions suddenly look better in another country, it is easy to move. The kinds of conditions that could encourage such a move include rising wages, active unions or effective worker health and safety laws—conditions to which we would hope Nicaragua aspires. Because of the "attraction" to investors of conditions that could include a dangerous work place or the abuse of workers' rights, many activists are fighting internationally for a "social charter" that would make it more difficult for transnationals to compete "on the backs of the workers."
(...) [the various development plans] Using Chile as its model, the Nicaraguan government's priorities, according to Ramírez, lay in agroindustry and the industrialization of natural resources, such as canning fish and processing lumber into plywood or furniture. Other investments, he says, such as in tourism, transportation and maquila, are complementary but not strategic. The government's priorities, therefore, appear to fall precisely in line with "good investment" as described above. But this is contradicted by a document called "Basic Information for the Investor," written by Ramírez' office. It specifically says that "the highest priority is placed on investments in nontraditional agricultural exports," which are not likely to further the country's industrialization and development. While the director of Nicaragua's Non-traditionals Commission, Alvaro Velásquez, told envío of his hopes for establishing plants for making and canning fruit juices, the most common nontraditional crops grown in Central America—such as melons, snow peas and broccoli—involve no industrial processing whatsoever. In addition, while crop diversification in itself is clearly not a bad thing, nontraditional agriculture generally brings with it excessive agrochemical use, with all the health and environmental consequences that generates, as well as significant economic risks, and should hardly be Nicaragua's top investment priority. The November 1991 preliminary version of another Ministry of Economy (MEDE) publication, "General Guidelines for a National Development Strategy 1991-2000," states that development would be based on both natural resource processing and "production processes not integrated at the local level, which form part of multinational production chains and make intensive use of national labor," in other words, maquila industries.
Everyone recognizes that this poor showing is primarily due to the country's high degree of instability, but not all sectors agree on what causes that instability. The government and the right wing lay the blame on rebellious Sandinista workers and armed rural groups of impatient and battle-hungry former soldiers. But they do not admit that behind these rebellions lies the government's own economic plan, which is driving these sectors to desperation.
(...) [investment] Some say that foreign investment is good in and of itself: the capital it brings to the country can help in times of crisis of domestic capital; it offers new jobs; and it can bring new technology. But the history of Nicaragua's Atlantic Coast demonstrates the weakness of these criteria. For many years, the coast was at the mercy of foreign companies that exploited the region's natural resources, plowing nothing back into the local economy, then simply picked up and left when the resources were exhausted.
(...) Governments want to attract investment because it will supposedly bring foreign exchange into the country. But this is not guaranteed unless the government takes care to do so: in many cases, investors simply borrow money from the recipient country to build or buy their assets. In addition, there should be control over the repatriation of capital. Nicaragua's law—which curiously only applies to those who choose to accept the rights and obligations it stipulates—allows capital repatriation after three years.
(...) What would be a good investment? On the one hand, raw materials extracted from Nicaragua should not be exported as such; the industry that processes those materials and increases their value should also be located in Nicaragua. And industry, on the other hand, should acquire the majority of its inputs from raw materials produced or extracted in Nicaragua. Instead of operating in isolated enclaves, such integration of economic processes, from raw material extraction to industrial processing, would tie each individual production process into others, producing a multiplier effect in the economy. This means, for example, that cotton itself should not be exported, but that cloth, thread and even clothing should be produced here and exported; and an industry that produces clothing should not import cloth or cotton but purchase its inputs from local producers.
(...) [on a violent culture?] Instability is not caused by those who protest; protest is a predictable response to instability. If the government and big business insist on blaming the Sandinistas for the results of their own policies, they should be more accurate: the FSLN played an important role in heightening the people's capacity to protest in an effective organized fashion. Since Nicaraguan officials often cite Chile as this government's model for economic policy and growth, perhaps they see the "problem" in attracting investment here as simply the lack of an ironhanded Pinochet.
(...) [FTZ at this time] the cost of renting space in the zone is cheaper here than in Honduras; workers' wages are much lower here than in Costa Rica; and Nicaraguan workers have a reputation for being more productive than either Honduran or Costa Rican workers. Zamora also mentioned that problems with electric power in the Dominican Republic are even greater than in Nicaragua. ... The six existing companies together occupy 25,000 square meters, almost all the space currently available. Only 26% of the 57-hectare industrial park has been constructed. New construction and remodeling, which will be undertaken with a $7.6 million loan from the Inter-American Economic Integration Bank, will bring the total to about 35%. The National Penitentiary System, says Zamora, has agreed to abandon the 8,600 square meters within the zone that it is currently using as a prison by the middle of this year.
(...) This means that maquila industry, as a whole, has very contradictory consequences—it can offer jobs where there are none, yet, by nature, it works against any improvement in workers' wages. The Costa Rican example also demonstrates how easily it can pack up and move on if it gets better "advantages" elsewhere.
In addition, investors in maquila prefer authoritarian governments where there are no unions or they have no power. None of the three private companies in the Free Trade zone has a union. Though Latino said that he would accept any "reasonable" workers' organization in Crecen, he had previously referred to workers interested in forming a union as "rebels," who, according to him, "left on their own."
(...) [skills] Zamora also claims that maquila plants will bring free worker training in new technologies and the transfer of technology to Nicaragua. This, however, is a somewhat absurd assertion. Maquila plants by definition only do piecework—one small part of an assembly process—in the host country. If workers learn a new skill, it is one with very limited use, as is any new technology that an industry would import.
(...) [question of integration] Zamora also asserts that over time there will be "vertical integration" with the local economy, that is, that the maquila plants will begin to purchase some part of their inputs from the domestic market. But while this is true in a few cases, there is no vertical integration in the vast majority. Purchasing inputs from the local economy could interfere with mobility, and the very nature of maquila plants is that they are highly mobile enterprises. If conditions suddenly look better in another country, it is easy to move. The kinds of conditions that could encourage such a move include rising wages, active unions or effective worker health and safety laws—conditions to which we would hope Nicaragua aspires. Because of the "attraction" to investors of conditions that could include a dangerous work place or the abuse of workers' rights, many activists are fighting internationally for a "social charter" that would make it more difficult for transnationals to compete "on the backs of the workers."
(...) [the various development plans] Using Chile as its model, the Nicaraguan government's priorities, according to Ramírez, lay in agroindustry and the industrialization of natural resources, such as canning fish and processing lumber into plywood or furniture. Other investments, he says, such as in tourism, transportation and maquila, are complementary but not strategic. The government's priorities, therefore, appear to fall precisely in line with "good investment" as described above. But this is contradicted by a document called "Basic Information for the Investor," written by Ramírez' office. It specifically says that "the highest priority is placed on investments in nontraditional agricultural exports," which are not likely to further the country's industrialization and development. While the director of Nicaragua's Non-traditionals Commission, Alvaro Velásquez, told envío of his hopes for establishing plants for making and canning fruit juices, the most common nontraditional crops grown in Central America—such as melons, snow peas and broccoli—involve no industrial processing whatsoever. In addition, while crop diversification in itself is clearly not a bad thing, nontraditional agriculture generally brings with it excessive agrochemical use, with all the health and environmental consequences that generates, as well as significant economic risks, and should hardly be Nicaragua's top investment priority. The November 1991 preliminary version of another Ministry of Economy (MEDE) publication, "General Guidelines for a National Development Strategy 1991-2000," states that development would be based on both natural resource processing and "production processes not integrated at the local level, which form part of multinational production chains and make intensive use of national labor," in other words, maquila industries.
from envio, september 1999:
The major source of employment nationwide, the maquila is said to have already created 110,000 jobs, with the possibility of more in the future. As in other countries, the majority of this labor force, approximately 85%, is female and between the ages of 13 and 34. In order to better understand this “world,” we spent time with young maquila workers (14-24 years old) from La Lima and El Progreso. Some of them live in the city and others in the countryside.
(...) [liberation thesis?] Many young people from both urban and rural settings dream of the day they will reach legal age and be able to work in a factory. Provoked by impatience, in many cases brought about by acute economic need, but also by a fascination—especially among young women—with the factory world, many of them find ways to get around the age requirements. There are 14-year-olds who work under false identities, for example. For these young women, the factory is the door to a whole new world. It offers them the opportunity for new experiences and adventures free of parental control—a novelty not permitted them within the family structure. “Female children are subject to stricter controls than male children. My father always says that women belong in the home, and men belong in the streets.”
(...) [internalizing stratification] The plants are organized either by modules or by classic assembly lines. Both systems strive for the highest productivity, which is measured by production targets. In the factory, a worker's value is determined by her or his capacity to produce. “Tell me how much you produce and I'll tell you what you're worth.” In the same vein, operators who reach or come closest to the production targets get better pay, in accordance with an incentive system. (...) Both organizational models create conflict and animosity among the workers, who unconsciously begin to internalize capitalist ideology: “What matters is production, not people.” A woman who doesn't keep up with the rhythm of her production line or module is often pressured by co-workers to leave the group, and in some cases, to leave the factory.
(...) [authority] Very few dare to contradict or answer back a boss, because, as at home, they are used to submitting to parental authority, and the boss is like a parent. The supervisor, on the other hand, plays a role more like that of a big sister. The women recognize that she has a certain amount of authority, but when all is said and done, she's just another “daughter,” so they have the right to question and even buck her. In other words, they experience the factory as a larger version of the home environment, where they are merely “daughters of the house” who have no choice but to accept parental controls unquestioningly. And just like at home, they have their ways of mocking authority and are punished when they get caught.
(...) A culture of fear permeates the maquila environment. Most workers are afraid to stand up to authority, and since the weight of authority is so strongly felt in the factory, they are afraid to seek the help they need to defend their rights. “Why make trouble with the bosses?” is a common response to problems in the workplace, as is “If they don't want to give me anything, just forget it, let them use it to buy altar candles.”
(...) For some of the women, the most important thing they get from working in the factory is economic independence. They are proud of no longer being a burden on their parents and happily acknowledge that the maquila has helped them remain single. “If we had stayed at home, we'd be married and have children by now,” explains one, “because young women who stay alone in the house all day have a lot of time for foolish thoughts.”
(...) The incorporation of youth—both male and female—into assembly plant work has also brought changes to the communities, especially in the countryside. The most noticeable change is the increase in rural-to-urban migration. Once young people leave the peasant world, they usually don't want to return, and even become magnets that attract other relatives and friends to the city. “I'll never go back to live in the country, because we're better off here. We can help our parents more by staying here, too, because every month we send them money. When our other sister is old enough, we're going to bring her here, and among the three of us we can help out more.”
(...) [a new consciousness?] If many of the young women are still short on a sense of nation, development and their place in all this as a class, they do seem to be developing a new sense of themselves in gender terms. The factory is a place where all kinds of women come together, where one finds a wide range of human, particularly female, experience. The convergence of this diversity combined with economic independence might just create the mold for a different model of womanhood in countries like ours. If this is so, it will take a form we cannot yet imagine, at least not here in Honduras, where themaquilaphenomenon is a couple of decades younger than, say, in Mexico, and where women have not had a revolution that began breaking old molds, as they have in neighboring Nicaragua. ... It's a tremendous paradox: at the end of the day, will the maquila’s greatest contribution to Honduras' development be the unfolding of a new gender consciousness among women?
The major source of employment nationwide, the maquila is said to have already created 110,000 jobs, with the possibility of more in the future. As in other countries, the majority of this labor force, approximately 85%, is female and between the ages of 13 and 34. In order to better understand this “world,” we spent time with young maquila workers (14-24 years old) from La Lima and El Progreso. Some of them live in the city and others in the countryside.
(...) [liberation thesis?] Many young people from both urban and rural settings dream of the day they will reach legal age and be able to work in a factory. Provoked by impatience, in many cases brought about by acute economic need, but also by a fascination—especially among young women—with the factory world, many of them find ways to get around the age requirements. There are 14-year-olds who work under false identities, for example. For these young women, the factory is the door to a whole new world. It offers them the opportunity for new experiences and adventures free of parental control—a novelty not permitted them within the family structure. “Female children are subject to stricter controls than male children. My father always says that women belong in the home, and men belong in the streets.”
(...) [internalizing stratification] The plants are organized either by modules or by classic assembly lines. Both systems strive for the highest productivity, which is measured by production targets. In the factory, a worker's value is determined by her or his capacity to produce. “Tell me how much you produce and I'll tell you what you're worth.” In the same vein, operators who reach or come closest to the production targets get better pay, in accordance with an incentive system. (...) Both organizational models create conflict and animosity among the workers, who unconsciously begin to internalize capitalist ideology: “What matters is production, not people.” A woman who doesn't keep up with the rhythm of her production line or module is often pressured by co-workers to leave the group, and in some cases, to leave the factory.
(...) [authority] Very few dare to contradict or answer back a boss, because, as at home, they are used to submitting to parental authority, and the boss is like a parent. The supervisor, on the other hand, plays a role more like that of a big sister. The women recognize that she has a certain amount of authority, but when all is said and done, she's just another “daughter,” so they have the right to question and even buck her. In other words, they experience the factory as a larger version of the home environment, where they are merely “daughters of the house” who have no choice but to accept parental controls unquestioningly. And just like at home, they have their ways of mocking authority and are punished when they get caught.
(...) A culture of fear permeates the maquila environment. Most workers are afraid to stand up to authority, and since the weight of authority is so strongly felt in the factory, they are afraid to seek the help they need to defend their rights. “Why make trouble with the bosses?” is a common response to problems in the workplace, as is “If they don't want to give me anything, just forget it, let them use it to buy altar candles.”
(...) For some of the women, the most important thing they get from working in the factory is economic independence. They are proud of no longer being a burden on their parents and happily acknowledge that the maquila has helped them remain single. “If we had stayed at home, we'd be married and have children by now,” explains one, “because young women who stay alone in the house all day have a lot of time for foolish thoughts.”
(...) The incorporation of youth—both male and female—into assembly plant work has also brought changes to the communities, especially in the countryside. The most noticeable change is the increase in rural-to-urban migration. Once young people leave the peasant world, they usually don't want to return, and even become magnets that attract other relatives and friends to the city. “I'll never go back to live in the country, because we're better off here. We can help our parents more by staying here, too, because every month we send them money. When our other sister is old enough, we're going to bring her here, and among the three of us we can help out more.”
(...) [a new consciousness?] If many of the young women are still short on a sense of nation, development and their place in all this as a class, they do seem to be developing a new sense of themselves in gender terms. The factory is a place where all kinds of women come together, where one finds a wide range of human, particularly female, experience. The convergence of this diversity combined with economic independence might just create the mold for a different model of womanhood in countries like ours. If this is so, it will take a form we cannot yet imagine, at least not here in Honduras, where themaquilaphenomenon is a couple of decades younger than, say, in Mexico, and where women have not had a revolution that began breaking old molds, as they have in neighboring Nicaragua. ... It's a tremendous paradox: at the end of the day, will the maquila’s greatest contribution to Honduras' development be the unfolding of a new gender consciousness among women?
from envio, september 1997:
This exploitation is possible because of the high national unemployment level together with the competition among businesses and countries to produce more at a lower cost. This combines with the state's compliance toward foreign maquila investment as an immediate solution to social problems, ideological defense of the maquilas by the national owners of the industrial parks and the constant threat by the foreign investors that they will fly with their business to more favorable countries—which is why they are called "swallows."
(...) Despite the obvious exploitation, the people who benefit from the workers' wages, and the workers themselves, are satisfied with this source of work. In Christian reflection groups it is not rare to hear prayers thanking God for the arrival of a new factory, and even the greatest critics recognize that it is better to be exploited than unemployed.
[note: not very critical article in general, and exclusively about honduras]
This exploitation is possible because of the high national unemployment level together with the competition among businesses and countries to produce more at a lower cost. This combines with the state's compliance toward foreign maquila investment as an immediate solution to social problems, ideological defense of the maquilas by the national owners of the industrial parks and the constant threat by the foreign investors that they will fly with their business to more favorable countries—which is why they are called "swallows."
(...) Despite the obvious exploitation, the people who benefit from the workers' wages, and the workers themselves, are satisfied with this source of work. In Christian reflection groups it is not rare to hear prayers thanking God for the arrival of a new factory, and even the greatest critics recognize that it is better to be exploited than unemployed.
[note: not very critical article in general, and exclusively about honduras]
from envio, july 2003:
[on urbanization]: The invasion of trans-national companies stimulates migratory movement in various ways. To be more competitive, landowners in poor countries acquire more land, mechanize agricultural work, introduce high-yield seed varieties and apply industrially produced inputs. All of these transnational-inspired novelties make a large part of rural labor redundant and also leave small producers at a disadvantage by reducing the prices of agricultural production. Those displaced seek employment in other areas of the country as well as abroad.
(...) This growing outflow of people from our countryside is considerably reducing the rural population’s overall weight and is a symptom of well-known changes caused by various factors, of which rural unemployment, most recently aggravated by the coffee crisis, is undoubtedly the most drastic.
(...) The penetration of transnational companies and their methods into rural areas undermines the peasant economy’s structures, which are based on reciprocity and established roles, replacing them with a labor market rooted in more individualistic conceptions and private profit, cultural features that trigger the uprooting of peasant populations. The increasing monetization of the economy tends to bring about the disappearance of the traditional institutions based on family networks and community solidarity that have provided the social infrastructure for many other exchanges. Wages as the exclusive mediator of all labor purchases erodes such rural institutions as the practice of bartering for services with no monetary exchange involved. Although this deterioration of the peasant economy’s structures is perhaps not quite so attributable to the transnationals in Nicaragua’s case, it is already palpable.
(...) [free trade zones´ role in this] Some of the maquilas and other foreign companies also produce goods that compete with those manufactured by local industry while familiarizing their workers with certain goods not within their financial reach. In short, these companies displace labor while at the same time whetting the national appetite for a new range of consumer goods. The result is an uprooted population group prone to migrate because it cannot attain the living standard to which it aspires and ideological links have been forged with the places from which the capital originated.
(...) [education as path to mobility] The 2001 living standards survey conducted by Nicaragua’s National Institute of Statistics and Censuses contains figures on almost 900 emigrants, provided by relatives responding to the census. Of the 52 who are university graduates, only 25% are working abroad in jobs that correspond to their professional qualifications. Another 13.5% work as waiters, cooks, nannies and above all salespeople; 19% work as carpenters, cabinetmakers, painters, mechanics, electricians and particularly foremen; and 21% as menial workers, domestics, doormen, launderers, agricultural laborers, security guards and unskilled construction workers.
[on urbanization]: The invasion of trans-national companies stimulates migratory movement in various ways. To be more competitive, landowners in poor countries acquire more land, mechanize agricultural work, introduce high-yield seed varieties and apply industrially produced inputs. All of these transnational-inspired novelties make a large part of rural labor redundant and also leave small producers at a disadvantage by reducing the prices of agricultural production. Those displaced seek employment in other areas of the country as well as abroad.
(...) This growing outflow of people from our countryside is considerably reducing the rural population’s overall weight and is a symptom of well-known changes caused by various factors, of which rural unemployment, most recently aggravated by the coffee crisis, is undoubtedly the most drastic.
(...) The penetration of transnational companies and their methods into rural areas undermines the peasant economy’s structures, which are based on reciprocity and established roles, replacing them with a labor market rooted in more individualistic conceptions and private profit, cultural features that trigger the uprooting of peasant populations. The increasing monetization of the economy tends to bring about the disappearance of the traditional institutions based on family networks and community solidarity that have provided the social infrastructure for many other exchanges. Wages as the exclusive mediator of all labor purchases erodes such rural institutions as the practice of bartering for services with no monetary exchange involved. Although this deterioration of the peasant economy’s structures is perhaps not quite so attributable to the transnationals in Nicaragua’s case, it is already palpable.
(...) [free trade zones´ role in this] Some of the maquilas and other foreign companies also produce goods that compete with those manufactured by local industry while familiarizing their workers with certain goods not within their financial reach. In short, these companies displace labor while at the same time whetting the national appetite for a new range of consumer goods. The result is an uprooted population group prone to migrate because it cannot attain the living standard to which it aspires and ideological links have been forged with the places from which the capital originated.
(...) [education as path to mobility] The 2001 living standards survey conducted by Nicaragua’s National Institute of Statistics and Censuses contains figures on almost 900 emigrants, provided by relatives responding to the census. Of the 52 who are university graduates, only 25% are working abroad in jobs that correspond to their professional qualifications. Another 13.5% work as waiters, cooks, nannies and above all salespeople; 19% work as carpenters, cabinetmakers, painters, mechanics, electricians and particularly foremen; and 21% as menial workers, domestics, doormen, launderers, agricultural laborers, security guards and unskilled construction workers.
from envio, july 2005:
[stability with pillage] Violeta Chamorro’s government liquidated almost all of the state-run industrial and agricultural companies, even selling off the railway system’s trains and tracks for scrap metal, paying people to rip up the rails. Arnoldo Alemán’s government sold off the state electricity and telephone companies at derisory prices and pillaged the public coffers. And Enrique Bolaños’ government’s budgetary priority is to pay local bankers usurious interest on the treasury bonds issued to cover the enormous fraud perpetrated by the owners of five bankrupt banks. US, Canadian, European and Taiwanese companies conduct a permanent pillage of our national wealth—timber, minerals, and fishing and water resources—while rewarding their workers with miserable wages. The rich don’t pay taxes. And ministers, magistrates, legislators and top public officials from all state branches earn the kind of salaries more associated with developed countries. Yet while all of this has been going on—and it still is—the three governments have enjoyed relative social stability. The reasons for such passivity are complex, interwoven and particular to this country.
(...) [on being organic] They played a leading role in at least two general strikes and several other specific strikes with great national impact. In the words of former CST leader Miguel Ruiz, “We stood up for the Sandinista Front,” which had not managed to put its party-government phase behind it and transform itself into an opposition party and was in the midst of a heated ideological battle between “renovators” and the “orthodox” over its identity and methods of struggle.
(...) [autonomy?] Up until 1997—marked by a failed national strike and roadblocks in April and May—these organizations were the Sandinista movement’s main political arm when it came to defending grassroots interests and maintaining its power bases. A year later, they were practically demobilized as a result of the first pact between Daniel Ortega and Arnoldo Alemán. Beyond their current numbers, what is most striking about all of these organizations is that most still operate according to basically the same model under which they were created. They still act as FSLN “intermediaries” and have leaders who respond to the political interests of the party leadership.
(...) [NGOization] While they do help palliate state deficiencies in areas such as health, education and housing, they have also acted as retaining walls against grassroots discontent towards the government and the system, as people tend to wait for outside charity rather than fight for their rights. Many of these organizations use attractive salaries in dollars and other benefits to contract officials, supposedly to promote citizens’ participation or stimulate grassroots organization. In this way, they turn activists into either professionals or simply employees who obey their bosses’ orders. ... And when it comes to organizing, NGOs very often tend to presume to represent their beneficiaries—or “target population,” as they like to call them—without even consulting them about the decisions being made in their name or their particular political position on any given matter.
(...) [autonomy again?] Above all, the union organizations have been subject to a phenomenon born of their own experience: their leaders on all levels no longer accept party control and have achieved an appreciable degree of autonomy in their protest actions. The most important examples are ANDEN and FETSALUD, each of which launched its own union struggles, including strikes, against the wishes of an important sector of the Sandinista leadership known as the Businesspeople’s Bloc. And each won its struggle, turning a deaf ear to the siren’s song of “governability” from legislators such as Bayardo Arce and prominent figures like Manuel Coronel Kautz. One FETSALUD leader privately said some months ago that “the sin lies not in the fact that we [FETSALUD leaders] are Sandinista activists, but rather that some of us place the dominant interests of the FSLN over and above those of our members.” This phenomenon of autonomy has also occurred among transport cooperatives, which have now turned into powerful businesses. In this case, autonomy has even led them to face off against other sectors of the FSLN, particularly those linked to grassroots organizations.
(...) [part of systematicity: creation of a political class] As a result, they do not exercise control of the business of politics. The political class, meanwhile, consolidates this false popular belief by concealing information and offering half truths to neutralize the people’s social and political awareness, even putting the brakes on any possibility of autonomous organization. Deep down, the political class knows that an aware and organized people would endanger its own privileges.
(...) [and the sandinistas, in this] This contradiction extends to the party’s whole national leadership, which has succumbed to the ferocious laws of the market in which honesty, the vocation for service and personal integrity are disposable merchandise.
(...) [to a more organic future] All of this has generated a profound crisis in the current model of representative democracy, and makes finding a path to participatory democracy more urgent than ever. Núñez sustains that “the political parties, union organizations and social movements have to redeem politics and participate in a new way of doing it. Depoliticization is suicide... Political participation without social and economic participation is an illusion. Political democracy without economic democracy is not enough. The workers have to take the economy and the market.”
(...) [ftz in context] In a country plagued by maquiladora assembly plants with ruthless and despotic owners and managers protected by the state itself, workers prefer to put up and shut up. Most have accepted the confiscation of their right to organize in a union. In this context, the few cases of total rebellion—particularly in Managua’s Las Mercedes Free Trade Zone—stand out more as exceptions than as examples.
(...) Although there is no reliable census, the number of Nicaraguans resident abroad is between 1.2 million and 1.5 million, or around one in every four Nicaraguans. Of these, from 50% to 60% send home money to maintain their families, while the rest have either completely broken their ties or have brought their families over to join them. Calculating an average of five people in each family nucleus, some 700,000 to 900,000 Nicaraguans are living off family remittances.
(...) [social movements combating systematicity] Among the most significant are the peasant marches against hunger and for land, carried out by thousands of families. In two consecutive years, 2003 and 2004, they marched on Managua from the mountains of Matagalpa and Jinotega, forcing the government to negotiate and agree to many of their demands. ... The thousands of victims of Nemagón and other pesticides used for years on banana plantations in the west of the country have provided another example of impressive mobilization. ... Teachers also achieved an overwhelming success with their national strike at the beginning of the year. ... The Consumer Defense Network has also had significant successes, though based on legal actions rather than mobilization. ... But perhaps the greatest political awareness has been displayed in the mobilization of the women’s movement. Thus far, it is the only movement that has gone beyond the scope of its own particular demands to take on national demands against the system and against the anti-democratic results of the Ortega-Alemán pact. Its main leaders have publicly stated that they will not be able to achieve gender equity or sexual and reproductive rights unless they first recover the democratic rights wrested away from the whole population by the top PLC and FSLN leaderships.
(...)
[stability with pillage] Violeta Chamorro’s government liquidated almost all of the state-run industrial and agricultural companies, even selling off the railway system’s trains and tracks for scrap metal, paying people to rip up the rails. Arnoldo Alemán’s government sold off the state electricity and telephone companies at derisory prices and pillaged the public coffers. And Enrique Bolaños’ government’s budgetary priority is to pay local bankers usurious interest on the treasury bonds issued to cover the enormous fraud perpetrated by the owners of five bankrupt banks. US, Canadian, European and Taiwanese companies conduct a permanent pillage of our national wealth—timber, minerals, and fishing and water resources—while rewarding their workers with miserable wages. The rich don’t pay taxes. And ministers, magistrates, legislators and top public officials from all state branches earn the kind of salaries more associated with developed countries. Yet while all of this has been going on—and it still is—the three governments have enjoyed relative social stability. The reasons for such passivity are complex, interwoven and particular to this country.
(...) [on being organic] They played a leading role in at least two general strikes and several other specific strikes with great national impact. In the words of former CST leader Miguel Ruiz, “We stood up for the Sandinista Front,” which had not managed to put its party-government phase behind it and transform itself into an opposition party and was in the midst of a heated ideological battle between “renovators” and the “orthodox” over its identity and methods of struggle.
(...) [autonomy?] Up until 1997—marked by a failed national strike and roadblocks in April and May—these organizations were the Sandinista movement’s main political arm when it came to defending grassroots interests and maintaining its power bases. A year later, they were practically demobilized as a result of the first pact between Daniel Ortega and Arnoldo Alemán. Beyond their current numbers, what is most striking about all of these organizations is that most still operate according to basically the same model under which they were created. They still act as FSLN “intermediaries” and have leaders who respond to the political interests of the party leadership.
(...) [NGOization] While they do help palliate state deficiencies in areas such as health, education and housing, they have also acted as retaining walls against grassroots discontent towards the government and the system, as people tend to wait for outside charity rather than fight for their rights. Many of these organizations use attractive salaries in dollars and other benefits to contract officials, supposedly to promote citizens’ participation or stimulate grassroots organization. In this way, they turn activists into either professionals or simply employees who obey their bosses’ orders. ... And when it comes to organizing, NGOs very often tend to presume to represent their beneficiaries—or “target population,” as they like to call them—without even consulting them about the decisions being made in their name or their particular political position on any given matter.
(...) [autonomy again?] Above all, the union organizations have been subject to a phenomenon born of their own experience: their leaders on all levels no longer accept party control and have achieved an appreciable degree of autonomy in their protest actions. The most important examples are ANDEN and FETSALUD, each of which launched its own union struggles, including strikes, against the wishes of an important sector of the Sandinista leadership known as the Businesspeople’s Bloc. And each won its struggle, turning a deaf ear to the siren’s song of “governability” from legislators such as Bayardo Arce and prominent figures like Manuel Coronel Kautz. One FETSALUD leader privately said some months ago that “the sin lies not in the fact that we [FETSALUD leaders] are Sandinista activists, but rather that some of us place the dominant interests of the FSLN over and above those of our members.” This phenomenon of autonomy has also occurred among transport cooperatives, which have now turned into powerful businesses. In this case, autonomy has even led them to face off against other sectors of the FSLN, particularly those linked to grassroots organizations.
(...) [part of systematicity: creation of a political class] As a result, they do not exercise control of the business of politics. The political class, meanwhile, consolidates this false popular belief by concealing information and offering half truths to neutralize the people’s social and political awareness, even putting the brakes on any possibility of autonomous organization. Deep down, the political class knows that an aware and organized people would endanger its own privileges.
(...) [and the sandinistas, in this] This contradiction extends to the party’s whole national leadership, which has succumbed to the ferocious laws of the market in which honesty, the vocation for service and personal integrity are disposable merchandise.
(...) [to a more organic future] All of this has generated a profound crisis in the current model of representative democracy, and makes finding a path to participatory democracy more urgent than ever. Núñez sustains that “the political parties, union organizations and social movements have to redeem politics and participate in a new way of doing it. Depoliticization is suicide... Political participation without social and economic participation is an illusion. Political democracy without economic democracy is not enough. The workers have to take the economy and the market.”
(...) [ftz in context] In a country plagued by maquiladora assembly plants with ruthless and despotic owners and managers protected by the state itself, workers prefer to put up and shut up. Most have accepted the confiscation of their right to organize in a union. In this context, the few cases of total rebellion—particularly in Managua’s Las Mercedes Free Trade Zone—stand out more as exceptions than as examples.
(...) Although there is no reliable census, the number of Nicaraguans resident abroad is between 1.2 million and 1.5 million, or around one in every four Nicaraguans. Of these, from 50% to 60% send home money to maintain their families, while the rest have either completely broken their ties or have brought their families over to join them. Calculating an average of five people in each family nucleus, some 700,000 to 900,000 Nicaraguans are living off family remittances.
(...) [social movements combating systematicity] Among the most significant are the peasant marches against hunger and for land, carried out by thousands of families. In two consecutive years, 2003 and 2004, they marched on Managua from the mountains of Matagalpa and Jinotega, forcing the government to negotiate and agree to many of their demands. ... The thousands of victims of Nemagón and other pesticides used for years on banana plantations in the west of the country have provided another example of impressive mobilization. ... Teachers also achieved an overwhelming success with their national strike at the beginning of the year. ... The Consumer Defense Network has also had significant successes, though based on legal actions rather than mobilization. ... But perhaps the greatest political awareness has been displayed in the mobilization of the women’s movement. Thus far, it is the only movement that has gone beyond the scope of its own particular demands to take on national demands against the system and against the anti-democratic results of the Ortega-Alemán pact. Its main leaders have publicly stated that they will not be able to achieve gender equity or sexual and reproductive rights unless they first recover the democratic rights wrested away from the whole population by the top PLC and FSLN leaderships.
(...)
from envio, september 2006:
Bolaños has borne major respon-sibility for this issue for no fewer than ten years and his legacy to his successor is totally negative. His “excuse” for the August blackouts is an apt epitaph for his administration: “It was my fault for getting so enthusiastic about foreign investment to generate jobs that I never thought about how the energy demand would rise.” When Bolaños announced on taking office that he hoped to be remembered as “the best President in Nicaragua’s history,” the country would have been forgiven for expecting something more than this disingenuous myopic oversight and unbridled enthusiasm for energy-guzzling free trade zones.
(...) Montealegre has announced that he will “sow fuel,” extending the cultivation of African palm and sugar cane to produce biodiesel and ethanol, projects already initiated in the country by private enterprise. He has also promised to push through the small renewable energy projects that the outgoing government ignored together with the gigantic Copalar dam, an environmentally destructive mega-project that would evict thousands of people from their communities and towns. Postponed since Somoza’s times, the project has recently been revived by foreign investors and their national partners, who reportedly include bankers, leaders of the ALN, FSLN and PLC, and even top army brass.
(...) [growth:] As the chart below shows, the last two years of Alemán’s government showed a growth blip due to post-Mitch aid, but in Bolaños’ first year the accumulated problems mentioned above took their toll. In the past three years, it has recovered a modest but sustained growth rate, which is ex-pected to continue this year for six different reasons.
First, exports have increased significantly and the prices of coffee, sugar and beef—still the country’s main exports—have improved. This government is also responsible for an important growth in Korean, Taiwan-ese and US investments in the tax-free assembly plants for re-export, known as maquilas, ormaquiladoras, most of which assemble and export garments.
(...) Moreover and unlike anybody else, Bolaños included the total value of the exports from maquiladoras operating in Nicaragua. The rest of the world only counts the value added by the maquila in the country, not the raw materials imported tax free for assem-bly. Doing things correctly, we would end up with $1.1 billion in exports.
(...) That’s not to say that exports haven’t grown or that we haven’t achieved some diversification in our traditional export products. In addi-tion to the traditional coffee we’ve been exporting for a century, we’re now beginning to export organic coffee and gourmet shade-grown coffee, and these new products fetch better prices. Nicaragua is also exporting dairy products, especially to El Salvador, and is beginning to export beans. For all that, however, we’re still mired in the export of raw materials, with little or no value added.
(...) [trade deficit] While export earnings grew, so did import spending, especially in the past couple of years, thanks in part to the rise in oil prices. Even accepting Bolaños’ asser-tion that we exported $1.6 billion in 2005, we imported $3 billion, nearly twice as much. This trade deficit is more or less the same as at the end of the Sandinista government in propor-tional terms. The largest in Latin America, it shows no sign of shrinking, and in fact keeps growing every year in absolute figures.
(...) Emigrants’ remittances resolve many family problems and help stabil-ize the economy, but they also express the misfortune of a country that is expelling so many citizens because it doesn’t offer them jobs or a decent standard of living. Surveys taken in recent years consistently show an incredibly high percentage of Nicara-guans who say they would leave in search of work somewhere else if they could. The Bolaños government’s economic policy, which favors big capital and banks, has increased the emigration of small businesspeople and workers whose only option is to go work hard in some other country and send a little back home.
(...) [credit] The clouds also hang very dark over the credit expansion, another of the factors that have contributed to the economy’s growth and dynamism. The vast bulk of that new credit has financed upper-middle-class housing construction, commerce and above all high ticket consumer items such as vehicles and major household appliances. A full 60% of the loans provided by the country’s banks go for such items, while the entire agricultural sector only gets 10% of the credit supply.
(...) The combined portfolio of all members of Nicaragua’s Association of Micro-Financing Institutions (ASOMIF) is now nearly US$200 million, and 300,000 people have access to that service. But even then, only 32% of these micro-credits get to the rural sector.
(...) [MAQUILAS:] We’re in the situation we’re in because the development strategy is perpetuating and exacerbating the in-equalities. The National Development Plan, with its six or seven “clusters,” is a strategy geared to creating what is fondly called a “business climate” to attract major foreign investors to Nicaragua. Unfortunately, most of the modest number this government has attracted are maquiladoras. Bolaños’ tenacious and sustained orientation has excluded all Nicaraguans linked to small and medium urban and rural businesses, even though they are the majority and generate the majority of productive jobs.
(...) We’re in the situation we’re in because the privileged actors in this story are in the financial system and because the bulk of the remaining investments have gone into improving the infrastructure for foreign investors. The clearest case is investment in free trade zone infrastructure, in other words the maquila industrial parks. Thanks to Bolaños’ strategy, the free trade zones have highways and ports to move their products while peasants don’t even have access roads to get their harvests out to the rural highways.
(...) It’s pathetic to think that the magnet attracting maquila investors to Nicara-gua isn’t even all the tax exemptions and infrastructure they demand of governments, but rather that Nicara-gua offers them its “competitive advan-tage” of the lowest paid labor force in Central America. And now that we’ve signed the Central American Free Trade Agreement, they are guaranteed not only profitability with low salaries but preferential access to the US market.
(...) With his peculiar triumphalism, President Bolaños recently inaugur-ated a huge free trade zone for a new US investment that, in his words, will “revolutionize” the maquila industry in Nicaragua. A very powerful textile group decided to bring its entire blue jeans production to Nicaragua. The maquila will even produce the cloth in Nicaragua, which is a major step up given that maquilas traditionally import all production inputs, cloth included, tax free and only sew the garments here. In addition to producing its entire line of jeans locally, this maquila will thus also foster the resurrection of cotton production in northwest Nicaragua, which is currently in its second year of pilot cotton crops. This new factory expresses the change of strategy of the North’s textile industry in response to Asian compe-tition. There’s nothing new in moving to Nicaragua to slash costs by paying low wages, wresting tax exemptions from the government and then export-ing back to the US market, also tax free, to sell their line to the US consumer at a handsome mark-up, even though the production cost is a fraction of what it would be in the States Such offshore maquila production began in Mexico even before NAFTA. The “revolution” consists of creat-ing an integrated chain from agricul-tural production through to the export of the manufactured product for the first time in history. And it’s no accident that it’s being applied to heavier pieces such as jeans, which would have uncompetitive costs if they had to be transported from China or even if the bolts of denim had to be shipped down from the States. The industrialists of this new strategy say that they’ve already spoken with all presidential candidates and have nothing to fear from any of them. Daniel Ortega dedicated a good part of his opening campaign speech to these investors and lauded the benefits they will bring to Nicaragua.
(...) [overall indicators] The estimated average annual population growth rate since the 1995 census was 2.6% annually, but with the 2005 census, it was discovered to have dropped to 1.8%, presumably ex-plained by the hemorrhage of emi-gration and greater access to and use of birth control methods by women of fertile age. Even with this significant drop, however, the 3.7% projected economic growth for 2006 isn’t nearly enough to generate sufficient jobs and opportunities for all the young people who enter the restricted job market each year and are often forced to leave the country at the first chance.
(...) The estimated average annual population growth rate since the 1995 census was 2.6% annually, but with the 2005 census, it was discovered to have dropped to 1.8%, presumably ex-plained by the hemorrhage of emi-gration and greater access to and use of birth control methods by women of fertile age. Even with this significant drop, however, the 3.7% projected economic growth for 2006 isn’t nearly enough to generate sufficient jobs and opportunities for all the young people who enter the restricted job market each year and are often forced to leave the country at the first chance.
(...) Latin America has the greatest wealth distribution inequalities in the world, and Nicaragua is competing for first place according to the Gini Co-efficient, which measures inequality. On the Gini scale of 0 to 100, in which 0 is absolute equality, Nicaragua has a coefficient of 55, greater than the Latin American average of 52 and nearly double China’s 30. Nicaragua’s official income distribution data show that the wealthiest 20% of households hoard 60% of the national income, while the poorest 20% try to get by on 3%. There’s no way in the world to reduce poverty with this income distribution.
Bolaños has borne major respon-sibility for this issue for no fewer than ten years and his legacy to his successor is totally negative. His “excuse” for the August blackouts is an apt epitaph for his administration: “It was my fault for getting so enthusiastic about foreign investment to generate jobs that I never thought about how the energy demand would rise.” When Bolaños announced on taking office that he hoped to be remembered as “the best President in Nicaragua’s history,” the country would have been forgiven for expecting something more than this disingenuous myopic oversight and unbridled enthusiasm for energy-guzzling free trade zones.
(...) Montealegre has announced that he will “sow fuel,” extending the cultivation of African palm and sugar cane to produce biodiesel and ethanol, projects already initiated in the country by private enterprise. He has also promised to push through the small renewable energy projects that the outgoing government ignored together with the gigantic Copalar dam, an environmentally destructive mega-project that would evict thousands of people from their communities and towns. Postponed since Somoza’s times, the project has recently been revived by foreign investors and their national partners, who reportedly include bankers, leaders of the ALN, FSLN and PLC, and even top army brass.
(...) [growth:] As the chart below shows, the last two years of Alemán’s government showed a growth blip due to post-Mitch aid, but in Bolaños’ first year the accumulated problems mentioned above took their toll. In the past three years, it has recovered a modest but sustained growth rate, which is ex-pected to continue this year for six different reasons.
First, exports have increased significantly and the prices of coffee, sugar and beef—still the country’s main exports—have improved. This government is also responsible for an important growth in Korean, Taiwan-ese and US investments in the tax-free assembly plants for re-export, known as maquilas, ormaquiladoras, most of which assemble and export garments.
(...) Moreover and unlike anybody else, Bolaños included the total value of the exports from maquiladoras operating in Nicaragua. The rest of the world only counts the value added by the maquila in the country, not the raw materials imported tax free for assem-bly. Doing things correctly, we would end up with $1.1 billion in exports.
(...) That’s not to say that exports haven’t grown or that we haven’t achieved some diversification in our traditional export products. In addi-tion to the traditional coffee we’ve been exporting for a century, we’re now beginning to export organic coffee and gourmet shade-grown coffee, and these new products fetch better prices. Nicaragua is also exporting dairy products, especially to El Salvador, and is beginning to export beans. For all that, however, we’re still mired in the export of raw materials, with little or no value added.
(...) [trade deficit] While export earnings grew, so did import spending, especially in the past couple of years, thanks in part to the rise in oil prices. Even accepting Bolaños’ asser-tion that we exported $1.6 billion in 2005, we imported $3 billion, nearly twice as much. This trade deficit is more or less the same as at the end of the Sandinista government in propor-tional terms. The largest in Latin America, it shows no sign of shrinking, and in fact keeps growing every year in absolute figures.
(...) Emigrants’ remittances resolve many family problems and help stabil-ize the economy, but they also express the misfortune of a country that is expelling so many citizens because it doesn’t offer them jobs or a decent standard of living. Surveys taken in recent years consistently show an incredibly high percentage of Nicara-guans who say they would leave in search of work somewhere else if they could. The Bolaños government’s economic policy, which favors big capital and banks, has increased the emigration of small businesspeople and workers whose only option is to go work hard in some other country and send a little back home.
(...) [credit] The clouds also hang very dark over the credit expansion, another of the factors that have contributed to the economy’s growth and dynamism. The vast bulk of that new credit has financed upper-middle-class housing construction, commerce and above all high ticket consumer items such as vehicles and major household appliances. A full 60% of the loans provided by the country’s banks go for such items, while the entire agricultural sector only gets 10% of the credit supply.
(...) The combined portfolio of all members of Nicaragua’s Association of Micro-Financing Institutions (ASOMIF) is now nearly US$200 million, and 300,000 people have access to that service. But even then, only 32% of these micro-credits get to the rural sector.
(...) [MAQUILAS:] We’re in the situation we’re in because the development strategy is perpetuating and exacerbating the in-equalities. The National Development Plan, with its six or seven “clusters,” is a strategy geared to creating what is fondly called a “business climate” to attract major foreign investors to Nicaragua. Unfortunately, most of the modest number this government has attracted are maquiladoras. Bolaños’ tenacious and sustained orientation has excluded all Nicaraguans linked to small and medium urban and rural businesses, even though they are the majority and generate the majority of productive jobs.
(...) We’re in the situation we’re in because the privileged actors in this story are in the financial system and because the bulk of the remaining investments have gone into improving the infrastructure for foreign investors. The clearest case is investment in free trade zone infrastructure, in other words the maquila industrial parks. Thanks to Bolaños’ strategy, the free trade zones have highways and ports to move their products while peasants don’t even have access roads to get their harvests out to the rural highways.
(...) It’s pathetic to think that the magnet attracting maquila investors to Nicara-gua isn’t even all the tax exemptions and infrastructure they demand of governments, but rather that Nicara-gua offers them its “competitive advan-tage” of the lowest paid labor force in Central America. And now that we’ve signed the Central American Free Trade Agreement, they are guaranteed not only profitability with low salaries but preferential access to the US market.
(...) With his peculiar triumphalism, President Bolaños recently inaugur-ated a huge free trade zone for a new US investment that, in his words, will “revolutionize” the maquila industry in Nicaragua. A very powerful textile group decided to bring its entire blue jeans production to Nicaragua. The maquila will even produce the cloth in Nicaragua, which is a major step up given that maquilas traditionally import all production inputs, cloth included, tax free and only sew the garments here. In addition to producing its entire line of jeans locally, this maquila will thus also foster the resurrection of cotton production in northwest Nicaragua, which is currently in its second year of pilot cotton crops. This new factory expresses the change of strategy of the North’s textile industry in response to Asian compe-tition. There’s nothing new in moving to Nicaragua to slash costs by paying low wages, wresting tax exemptions from the government and then export-ing back to the US market, also tax free, to sell their line to the US consumer at a handsome mark-up, even though the production cost is a fraction of what it would be in the States Such offshore maquila production began in Mexico even before NAFTA. The “revolution” consists of creat-ing an integrated chain from agricul-tural production through to the export of the manufactured product for the first time in history. And it’s no accident that it’s being applied to heavier pieces such as jeans, which would have uncompetitive costs if they had to be transported from China or even if the bolts of denim had to be shipped down from the States. The industrialists of this new strategy say that they’ve already spoken with all presidential candidates and have nothing to fear from any of them. Daniel Ortega dedicated a good part of his opening campaign speech to these investors and lauded the benefits they will bring to Nicaragua.
(...) [overall indicators] The estimated average annual population growth rate since the 1995 census was 2.6% annually, but with the 2005 census, it was discovered to have dropped to 1.8%, presumably ex-plained by the hemorrhage of emi-gration and greater access to and use of birth control methods by women of fertile age. Even with this significant drop, however, the 3.7% projected economic growth for 2006 isn’t nearly enough to generate sufficient jobs and opportunities for all the young people who enter the restricted job market each year and are often forced to leave the country at the first chance.
(...) The estimated average annual population growth rate since the 1995 census was 2.6% annually, but with the 2005 census, it was discovered to have dropped to 1.8%, presumably ex-plained by the hemorrhage of emi-gration and greater access to and use of birth control methods by women of fertile age. Even with this significant drop, however, the 3.7% projected economic growth for 2006 isn’t nearly enough to generate sufficient jobs and opportunities for all the young people who enter the restricted job market each year and are often forced to leave the country at the first chance.
(...) Latin America has the greatest wealth distribution inequalities in the world, and Nicaragua is competing for first place according to the Gini Co-efficient, which measures inequality. On the Gini scale of 0 to 100, in which 0 is absolute equality, Nicaragua has a coefficient of 55, greater than the Latin American average of 52 and nearly double China’s 30. Nicaragua’s official income distribution data show that the wealthiest 20% of households hoard 60% of the national income, while the poorest 20% try to get by on 3%. There’s no way in the world to reduce poverty with this income distribution.
Wednesday, April 18, 2007
from envio, jan 1994:
Life in Nicaragua today is marked by a push towards the private, the individual and thus an attack on most things collective including in organizational terms. When the Chamorro government took office in 1990, its officials began to talk about the "new era" and the "new economy," preaching the advantages of a free market and the future awaiting Nicaragua as it opened itself up to international trade. It is common to hear the government and politicians of all stripes talking about the need to adapt their strategies economic or political to this new era. Many of the "new" models have as their key foundation something as old as a nearly total faith in the efficiency and moral correctness of the free market. What is new today is how the world has changed, and with it, nearly all the rules of the game.
(...) [history] In the mid 1960s, most of the poor countries of the South still did not have assembly (maquila) plants or free zones producing for the world market. A decade later, the technological innovations taking place in the North led to a new international division of labor and an industrialization of the poorer countries oriented toward new kinds of exports for example, radios, tape recorders, computer chips, blue jeans and sportswear instead of coffee, bananas or sugar. With this new division, the free trade zones emerged. The free trade zones came to the region during the 1970s, within the context of the new Central American Common Market. They were conceived of by the governments as mechanisms to promote development, and the state was seen as playing a key role.
(...) Nicaragua was one of the Central American countries where the installation of a free trade zone was first planned (in 1973), but the zone did not open its doors until 1996, with eight factories and 3,000 workers. There was even a complementary plan to construct a deep water port on the southern Atlantic Coast near Monkey Point, to facilitate exportation of the zone's products to the eastern seaboard of the US by bringing transportation costs down. But the port was never built.
(...) The free trade zones throughout Central America were taking on more importance by 1980 and were integrated first as part of the Caribbean Basin Initiative and later in the Initiative for the Americas, the economic strategies for Latin America promoted by the Reagan Bush administrations. They fit well with the neoliberal model and the structural adjustment programs the international financial institutions were introducing at the regional level. The emphasis was on assembly process of nontraditional exports. According to the study, "Maquilas and Union Organization in Central America," by Roland Membreño and Elsa Guerrero, "our countries are being converted into huge industrial parks, abandoning any pretension of serving to satisfy internal demand."
(...) Although the zona franca was essentially irrelevant to the economy of revolutionary Nicaragua, a small zone did continue to function, producing primarily shoes and clothing. A worker from the ENAVES textile factory confiscated by the revolution and part of the zona franca during the 1980s remembers those years: "There were problems, but there was protection. They gave us meals, including breakfast and dinner, when we had to work extra hours. They also gave us the basic market basket of goods and transportation." The factories in the zone during the 1980s were unionized and state run. Thus their workers benefited both directly, in terms of their actual salaries, and indirectly, through the many subsidies the state guaranteed to the entire population. That is the key difference with the zona franca as currently constituted.
(...) Looking to reinsert the country into the international market, the "1970s style" maquila reappeared in Nicaragua at the end of 1991. New legislation facilitated investment in this kind of enterprise and the zona franca began to function, as it does in all countries, as a productive enclave, isolated and disconnected from the national economy. Nicaragua's free trade zone is still small and relatively unimportant for the country economically, but the prospects are for significant growth. And that's what the government is aiming for. Government statements about the zone circulating among the foreign business community declare that "the government of Nicaragua offers an attractive package of incentives, to all enterprises that qualify, to establish operations in the free zones of the country."
(...) "Although the Ministry of Labor is supposed to look out for the interests of the workers, the truth is that it represents the interests of these foreign companies. It has rubber stamped firings and mistreatment of the workers," charges Meneses.
(...) "A lot depends on the country's productivity image, and, in spite of everything that's happened here, we have a good reputation," Carlos Zúniga claims. Regarding public services (water, light, etc.), which so often fail to function in Managua, he adds, "We are always working for the institutions to offer better services in the zone. We want special treatment, because if we received the same treatment the rest of the world does, we wouldn't be able to produce."
(...) As part of its package to privatize state enterprises, the Chamorro government closed a number of state textile, clothing, shoe and other factories which set unemployment soaring among women workers, who had been the backbone of the work force in these industries. When the zona franca opened it doors again in 1991, almost all of the women from the closed textile factories sought and found jobs in the zone, working now for foreign employers.
(...) In its US publicity campaign, the Nicaraguan government emphasized how cheaply investors could acquire these factories. Although it spoke and continues to speak of "private" enterprises, the government plays a key role in consolidating the zone. The free trade zones, showcases for the free market, would not exist if not for other mechanisms that promote them, at the expense of other types of economic activity. In a commentary on the nightly "Sin Fronteras" radio program, CRIES economist Adolfo Acevedo destroyed the myth of the so called free market; his words are pertinent to an understanding of the zona franca. "The concept of the free market is ideological. A free market exists nowhere in the world; there is state intervention and regulation everywhere.... In the case of Nicaragua, the market simply does not function for 70 80% of all Nicaraguans. What the market does is deepen social and economic polarization, instead of attenuating it."
(...) "It's not that unions aren't allowed," says Carlos Zúniga, "it's that no place in the world is there a free trade zone that has unions. A union would mean shutting down the zona franca because, quite simply, investment doesn't come in where there are unions. We're working with the Ministry of Labor to resolve all this, so that unions aren't needed here."
(...) According to a study by Ana Silvia Monzón, the characteristics traditionally assigned to women in the social and labor division of society point to "women as a labor reserve that is poorly skilled and therefore cheap, docile and disciplined." This makes women the "perfect" work force for maquila production.
(...) Advertisements in the Nicaraguan newspapers appearing recently read as follows: "Private firm located in the zona franca needs female personnel from 16 to 22 years old." In Central America, women are 90% of the work force of the maquila, which now employs 8% of the economically active female population at the regional level. This is explained in part because the region's most important maquilas are textile plants, an industry that has long been a bastion of female labor. Another reason is of greater concern: businessmen tend to see women, and particularly young women, as ideal workers, more easily manipulated and thus less problematic.
(...) In spite of all these problems, there are always workers who manage to earn fairly well. And what happens to them? They tend to be transferred to other areas inside the factory. "That happened in ENAVES," says Auxiliadora Abarca, "And what happens when they're moving you around every other day is that you never get really good at any one job."
(...) The growing complexity and constant intensification of work in the maquilas takes a serious toll on the women workers. According to Membreño and Guerrero, this method of work hides "a conception of the woman worker, and of human beings in general, which reduces her to a kind of cog on the machine. Thus it becomes so important to control the time, and even the bodies, of the workers."
Life in Nicaragua today is marked by a push towards the private, the individual and thus an attack on most things collective including in organizational terms. When the Chamorro government took office in 1990, its officials began to talk about the "new era" and the "new economy," preaching the advantages of a free market and the future awaiting Nicaragua as it opened itself up to international trade. It is common to hear the government and politicians of all stripes talking about the need to adapt their strategies economic or political to this new era. Many of the "new" models have as their key foundation something as old as a nearly total faith in the efficiency and moral correctness of the free market. What is new today is how the world has changed, and with it, nearly all the rules of the game.
(...) [history] In the mid 1960s, most of the poor countries of the South still did not have assembly (maquila) plants or free zones producing for the world market. A decade later, the technological innovations taking place in the North led to a new international division of labor and an industrialization of the poorer countries oriented toward new kinds of exports for example, radios, tape recorders, computer chips, blue jeans and sportswear instead of coffee, bananas or sugar. With this new division, the free trade zones emerged. The free trade zones came to the region during the 1970s, within the context of the new Central American Common Market. They were conceived of by the governments as mechanisms to promote development, and the state was seen as playing a key role.
(...) Nicaragua was one of the Central American countries where the installation of a free trade zone was first planned (in 1973), but the zone did not open its doors until 1996, with eight factories and 3,000 workers. There was even a complementary plan to construct a deep water port on the southern Atlantic Coast near Monkey Point, to facilitate exportation of the zone's products to the eastern seaboard of the US by bringing transportation costs down. But the port was never built.
(...) The free trade zones throughout Central America were taking on more importance by 1980 and were integrated first as part of the Caribbean Basin Initiative and later in the Initiative for the Americas, the economic strategies for Latin America promoted by the Reagan Bush administrations. They fit well with the neoliberal model and the structural adjustment programs the international financial institutions were introducing at the regional level. The emphasis was on assembly process of nontraditional exports. According to the study, "Maquilas and Union Organization in Central America," by Roland Membreño and Elsa Guerrero, "our countries are being converted into huge industrial parks, abandoning any pretension of serving to satisfy internal demand."
(...) Although the zona franca was essentially irrelevant to the economy of revolutionary Nicaragua, a small zone did continue to function, producing primarily shoes and clothing. A worker from the ENAVES textile factory confiscated by the revolution and part of the zona franca during the 1980s remembers those years: "There were problems, but there was protection. They gave us meals, including breakfast and dinner, when we had to work extra hours. They also gave us the basic market basket of goods and transportation." The factories in the zone during the 1980s were unionized and state run. Thus their workers benefited both directly, in terms of their actual salaries, and indirectly, through the many subsidies the state guaranteed to the entire population. That is the key difference with the zona franca as currently constituted.
(...) Looking to reinsert the country into the international market, the "1970s style" maquila reappeared in Nicaragua at the end of 1991. New legislation facilitated investment in this kind of enterprise and the zona franca began to function, as it does in all countries, as a productive enclave, isolated and disconnected from the national economy. Nicaragua's free trade zone is still small and relatively unimportant for the country economically, but the prospects are for significant growth. And that's what the government is aiming for. Government statements about the zone circulating among the foreign business community declare that "the government of Nicaragua offers an attractive package of incentives, to all enterprises that qualify, to establish operations in the free zones of the country."
(...) "Although the Ministry of Labor is supposed to look out for the interests of the workers, the truth is that it represents the interests of these foreign companies. It has rubber stamped firings and mistreatment of the workers," charges Meneses.
(...) "A lot depends on the country's productivity image, and, in spite of everything that's happened here, we have a good reputation," Carlos Zúniga claims. Regarding public services (water, light, etc.), which so often fail to function in Managua, he adds, "We are always working for the institutions to offer better services in the zone. We want special treatment, because if we received the same treatment the rest of the world does, we wouldn't be able to produce."
(...) As part of its package to privatize state enterprises, the Chamorro government closed a number of state textile, clothing, shoe and other factories which set unemployment soaring among women workers, who had been the backbone of the work force in these industries. When the zona franca opened it doors again in 1991, almost all of the women from the closed textile factories sought and found jobs in the zone, working now for foreign employers.
(...) In its US publicity campaign, the Nicaraguan government emphasized how cheaply investors could acquire these factories. Although it spoke and continues to speak of "private" enterprises, the government plays a key role in consolidating the zone. The free trade zones, showcases for the free market, would not exist if not for other mechanisms that promote them, at the expense of other types of economic activity. In a commentary on the nightly "Sin Fronteras" radio program, CRIES economist Adolfo Acevedo destroyed the myth of the so called free market; his words are pertinent to an understanding of the zona franca. "The concept of the free market is ideological. A free market exists nowhere in the world; there is state intervention and regulation everywhere.... In the case of Nicaragua, the market simply does not function for 70 80% of all Nicaraguans. What the market does is deepen social and economic polarization, instead of attenuating it."
(...) "It's not that unions aren't allowed," says Carlos Zúniga, "it's that no place in the world is there a free trade zone that has unions. A union would mean shutting down the zona franca because, quite simply, investment doesn't come in where there are unions. We're working with the Ministry of Labor to resolve all this, so that unions aren't needed here."
(...) According to a study by Ana Silvia Monzón, the characteristics traditionally assigned to women in the social and labor division of society point to "women as a labor reserve that is poorly skilled and therefore cheap, docile and disciplined." This makes women the "perfect" work force for maquila production.
(...) Advertisements in the Nicaraguan newspapers appearing recently read as follows: "Private firm located in the zona franca needs female personnel from 16 to 22 years old." In Central America, women are 90% of the work force of the maquila, which now employs 8% of the economically active female population at the regional level. This is explained in part because the region's most important maquilas are textile plants, an industry that has long been a bastion of female labor. Another reason is of greater concern: businessmen tend to see women, and particularly young women, as ideal workers, more easily manipulated and thus less problematic.
(...) In spite of all these problems, there are always workers who manage to earn fairly well. And what happens to them? They tend to be transferred to other areas inside the factory. "That happened in ENAVES," says Auxiliadora Abarca, "And what happens when they're moving you around every other day is that you never get really good at any one job."
(...) The growing complexity and constant intensification of work in the maquilas takes a serious toll on the women workers. According to Membreño and Guerrero, this method of work hides "a conception of the woman worker, and of human beings in general, which reduces her to a kind of cog on the machine. Thus it becomes so important to control the time, and even the bodies, of the workers."
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