Date sent: Tue, 18 May 1999 15:38:39 -0400
Send reply to: Forum on Labor in the Global Economy [EMAIL PROTECTED]
From: Charles Brown [EMAIL PROTECTED]
Subject:maquiladoras
To: [EMAIL PROTECTED]
A forward
CB
(
Christopher Parkes on the problems resulting from the rapid growth of
the maquiladora industrial zone
The need for economic development, long neglected in favour of raw
economic growth and often ignored because of urgent short-term demands,
is more pressing than ever in the cities strung out along the US-Mexico
border. Expansion of the maquiladora industries to the south shows no
sign of slowing, while population growth continues on both sides,
threatening the region with infrastructural and environmental crisis.
Although Mexico's maquilas - which pay no tariffs on imported goods and
components destined for re-export - are due to lose this key competitive
advantage in less than two years, their numbers and payrolls are
continuing to increase. According to Jim Gerber, an economics professor
at San Diego State University, the rise in the number of businesses in
most Mexican border communities has exceeded historic rates for the past
two years. The average number of employees has increased from 240 in
1993, when the North American Free Trade Agreement was enacted and the
end of the tariff waivers was fixed for January 1 2001, to 330 at the
end of last year. The companies have also grown more sophisticated,
having graduated from unskilled assembly plants to integrated operations
with design and research facilities. As Mr Gerber notes in a new study,
the pattern is not that of a sector dependent for its survival on
customs concessions. Noting that the number of maquiladora
establishments is growing even faster in areas far from the border, Mr
Gerber suggests the sector is becoming incorporated into the mainstream
of Mexican manufacturing. Although the maquiladoras will, technically,
no longer exist after the withdrawal of their incentives, their legacy
will last. Thanks to foreign investment of capital and expertise, he
says, one result could be "a profound modernisation of the entire
manufacturing sectors". Another element will be dynamic growth in the
north of Mexico, where there were 3,051 factories at the end of last
year - a third more than when Nafta took effect. While this spells
relative prosperity for northern Mexico, it will also bring strains both
north and south of the border. According to a paper presented at a
cross-border meeting of US and Mexican government officials this week,
the population of the border region is likely to balloon by 2020 to 25m
people from 11m today. Even in the "best case" scenario, a further 5m
people will join those already clustered in cross-border communities
such as San Diego/Tijuana and Calexico/Mexicali. Mexican numbers will
increase faster, driven by migration and a higher birth rate, while
growth from the US side is expected to continue to be driven by the
steady drift into the Sun Belt states. The trends "portend serious
problems for border communities in terms of infrastructure deficits,
availability of water and energy, and negative environmental impacts on
water, air and natural areas," says the paper from the Southwest Center
for Environmental Research and Policy. "Most border communities are not
prepared to deal with even the best case scenario." Although both sides
have seen substantial job growth, unemployment in some parts in the US
is routinely in double figures, and low wages (prosperous San Diego is
the main exception) mean that many workers require substantial public
assistance. "Thus, many of these jobs require a public subsidy and
consume more taxes than they generate," the report says. In most places,
the inhabitants also consume more water than nature provides. In an
essentially arid-to-desert environment, San Diego imports 90 per cent of
its water, and Tijuana 95 per cent. At Sierra Vista near the border
between Arizona and Sonora, the aquifer has been pumped to such an
extent that the land above has subsided. As for policy solutions, the
Southwest Center touches a sensitive spot with the suggestion for
co-operation such as that seen in Europe, where "anchored by the
European Community and focused on a common purpose by the expanding
single market, this region has experienced a great increase in
trans-border planning efforts and projects." However, while economic
disparities have blurred in Europe, they could not be starker than at
the Mexican border. Even though the southern regions of California,
Arizona, New Mexico and Texas are the poorest part of the US, pay rates
and quality of life are still substantially higher than next door in
Mexico, where the national average hourly compensation in wages and
benefits for a production worker is $1.75, according to federal data. It
will
