Thus the world multifibre agreement which is, in principle, an agreement for protection of the industry of the industrialized countries, could be distorted by this same industry thanks to the limited displacement of production towards the FTZs. The consequences of this little capitalist game are borne entirely by the In the misery zone THE Caribbean region has become an important assembly point in the course of the 1980s, thanks to a succession of devaluations than a fifth of them in Haiti. ROBERT HELDER
HIS spectacular growth is essentially due to the success of the Free Trade Zones (FTZs) in the Dominican Republic. Between 1984 to 1989, their number has passed from four to seventeen and the number of people employed has grown from 25,000 to 110,000. This last figure is bigger than that of industries manufacturing for the local market or that of the sugar industry, both stagnant since the beginning of the 1980s. It represents 5% of total employment in the country. In 1988, value added in the FTZs reached 15% of value added by the whole of the manufacturing sector. Exports from the FTZs reached $517 million, more than a third of commodity exports.
The reasons for this growth are many; proximity to the United States; exemption from US customs duties for many workers of the FTZs.
The governments which open the FTZs are making themselves a party to a virtual slave trade. The almost total absence of rights for the workers concerned must generally go hand in hand with strong states, so as to maintain social peace and guarantee the violence of the exploitation. * 1. Cited in "L'industrialisation du développement", Pierre Salama and Patrick Tissier, souséditions Maspero, Paris 1982. 2. The partial delocalization of production concems, in general, the intermediary stages of production (assembly, and so on) and allows these products to keep the label Made in France or Made in Germany. This type of organization of the production process allows firms to produce at least cost and sell at the highest price. products under the Reagan Plan; relative political stability; total freedom from taxes; and above all, as the promotion brochures boast, "cheap and abundant labour".
The Dominican FTZs attract investors above all because of a very high rate of exploitation of labour. The minimum salary applicable in the zones is currently 650 pesos a month, that is around £50/$100. The working week is at least 44 hours. Conditions of work are in general very bad, the rhythms imposed by piece work very high. Despite the recognition of trade union rights in the rest of the country, in the FTZs repression of trade union activities is absolute. Workers are recruited after police surveillance of any previous trade union or political activity. The Slighte atiem is a loganizayon and iate 19 lective action is followed by immediate
December 10, 1990 • #196 International Viewpoint and the implementation in 1984 of the "Reagan Plan"
(Caribbean Basin Initiative). Since that time, the number of
Free Trade Zones in this region has almost doubled to more than 60. They employed less than 100,000 people in 1984, half of them in Haiti - in 1989 they employed nearly 200,000, less and the implementation in 1984 of the "Reagan Plan"
(Caribbean Basin Initiative). Since that time, the number of
Free Trade Zones in this region has almost doubled to more than 60. They employed less than 100,000 people in 1984, half of them in Haiti - in 1989 they employed nearly 200,000, less
FREE TRADE ZONES dismissal without any right of appeal.
Three quarters of jobs in the zones are
The share of Free Zones in Dominican exports held by women. The factory bosses particularly appreciate their dexterity in assembly tasks (mainly garments, shoes and electronics) and their relative docility, a consequence of their dominated situation in a particularly patriarchal society. The majority of these women are young -between 16 and 24 — and remain only for some years in the workshops, whether because of maternity or the attrition of work. In brief, the FTZs are areas of intense repression and exploitation!.
Nevertheless, the development of the FTZs does not constitute a path to capitalist development, contrary to the claims of the ruling class and the bourgeois economists?.
One of their chief claims is that enterprises in the FTZs have created jobs. In fact they have wasted the labour force in tasks which could be automated according to existing technical knowledge. The rapid turnover of the workforce is a proof of this waste — their labour power is used up in a few years.
Moreover, these jobs are very precarious. Any change in the social or political climate can lead to the foreign enterprises, or the mother companies transferring their orders to another competing country, or moving their workshops from the FTZs at little cost. This is what Haiti has experienced since the fall of Duvalier in 1986, despite the efforts of the military, Washington and Paris to preserve the social order.
### Wave of departures
Also, it is enough for one or several of the competing countries on the FTZ market to devalue their currency sufficiently to provoke a wave of departures. The electronics exports of Barbados, which reached $150 million in 1984, have thus been reduced to nothing in three years. Finally, progress in automation of industrial production can render these jobs no longer profitable, at least without a further lowering of real salaries. Since 1970, when the first Dominican FTZ was created, the minimum real monthly salary has fallen from $58 to $23.
The FTZS were supposed to generate an inflow of foreign currency. In fact, the net revenues of foreign currency from this activity, that is to say the added value in the Dominican FTZs, rose to only $129 million in 1988. For an average of 80,000 jobs in the course of the year 1988, this represented only $1612 a year per job.
Again, the FTZs were supposed to facilitate the transfer of technology favourable to the industrialization of the country. In fact, the transfer is insignificant. By definition, industries with a high intensity of labour do not tend to integrate modern technologies. The weakness of investment 20 indicates clearly that the Free Trade Zone enterprises are sweatshops and not indus-
1975 In Millions % of $ National exports 887 97 Sugar products 594 65 Coffee 34 4 Tobacco 34 4 Cocoa 25 3 Minerals 149 16 Others 50 5 FTZ exports 27 3 Total exports 914 100 tries; $3318 per worker in the shoe industries, $5379 in clothes manufacture, $9057 in electronics?
The average investment in the industries of the United States is at least ten times higher than this figure. The time devoted to genuine training of workers is in general not more than a few weeks. The attitude of the Dominican state is moreover in line with the adoption of this mode of "under-development" — it is progressively abandoning its responsibility for education, the standard of which has been in spectacular decline for nearly ten years.
The FTZs, it was claimed, would stimulate economic activity in the rest of the country through the purchase of goods and services.
In fact, purchases from the local economy by the FTZs are practically nil. Pieces for assembly, like, for example, fabrics or electronics components, are produced at least cost and with least risks in the more advanced countries. Even the enterprises which have been installed for 15 years or more in the Dominican Republic have not begun to integrate themselves in the local economy.
To sum up, the expansion of the FTZs in the Dominican Republic took place only because the country has, through its
1980 1000 n Millions n Millions % % of $ 960 89 330 31
52 5
35
51 380 35 111 10 117 1077 100
1988 1000 In Millions % of $ 901 64 178 12 64 5 18 1
64 5 408 29 169 12 517 36 141 100 policy of repression and superexploitation of the workers, placed itself on the lowest rung of the hierarchy in the international division of labour. This does not mean that the country might not one day drop out of the hierarchy, due to competition from the other dominated countries, or from the conjuncture of protectionism, deregulation and automation of the labour force in the imperialist countries.
The only positive gain of the growth of the FTZ in the Dominican Republic is the development of a new sector of the working class. This sector is concentrated -two of the FTZs each employ more than 30,000 workers (San Pedro de Macoris and Santiago).
It is also young in the majority and essentially female. The development of feminist and class struggles will allow it to organize itself and become conscious of its strength. The FTZs thus hold the promise of a renewal of social and political struggles. * 1. See Isis Duarte, "Trabajadores Urbanos en RD", Editora UASD, Santo Domingo, 1986. 2. See A. Abreu et al, "Las Zonas Francas Industriales", Centro de Orientacion Economica, Santo Domingo. 3. Francisco Moya Espinal, "Zonas Francas Industriales y Empresas Multinacionalese RD", Working Paper no. 46, project OIT.
International Viewpoint #196 • December 10, 1990