Industrialisation Impacts

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RECENT CARIBBEAN INDUSTRIALIZATION TRENDS ANDTHEIR IMPACTS ON HOUSEHOLD W ELL-BEING

paper prepared forthe annual meeting ofthe Caribbean Studies Association (CSA)Jam aica, Ma y 24-29, 1993

THOMAS KLAKDepartment of G eography, Miam i Universi ty , Oxford, OH 45056phon e: 513-529-4049; FA X: 513-529-3841ema il: tcklak@ miavxl.acs.muohio.edu


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Export m anufacturing and touri sm, w hen m easured by recent growth in fore ignexchange earnings and em ployment , are the most dynam ic economic sec tors in theCaribbe an. This paper cri t ically exam ines industrial trends , while others have evaluatedCaribbean tour ism in para l le l fa shion (Be l is le 1984; Cox & Em bree 1991; W eaver 1991) . Asto the nu m erical s ignif icance of indu str ia l exports , by 1988 , their per capita US d ol lar valuefor e ight representative Caribbean coun tries was four t imes the 1976 level (Klak and Ru l li1993) . Job growth in E xport Process ing Zon es (EPZs) , enc laves e s tabli shed to accomm odateforeign-owne d industries , was s imilarly s trong. Em ploym ent nearly trebled in Jamaica from1975 to 1988-9, whi le a t the same t ime in the Dom inican Republ ic i t grew from 6,500 toover 112 ,000 (Schoepf le & Perez-L6p ez 1992 p142) . 4The fo llowing discuss ion m oves sys temat ica l ly through Figure 1 . The f igure makesconnect ions betw een proce sses related to Caribb ean industrial izat ion that , i f they hav e beenstudied at a l l , are usual ly studied sep arately . The text highl ights the roles of issues andproblems in the num bered boxes , and re la t ions depic ted by the arrows . A qu ick g lance acrossFigure 1 w i ll l ike ly suggest a rather un wie ldy se t o f re la t ions . Upon second g lance , however ,the f igure should also suggest that a basic a im of the pape r is to identify connections betw eena wide variety of trends, including issues of depend ence, debt , investmen t, c lass , and gen der,a l l imp l icated in the developm ent process . The app roach here is sweepin gly inclusive , to as ignif icant degree in react ion to the bulk of the l i terature that has focused on such com ponen tissues as the debt cr is is (Girvan & Bern al 1982) , US trad e pol icy toward the region(Newfarm er 1986; Schoepfle & Perez-LOp ez 1989) , industr ia l -technological change (G oss &Con wa y 1992) , and case stud ies (Long 1983) . As perfectly respectab le as the topical ly-focused w ork i s in add ress ing those se l ec ted i s sues , each i s sue i s f ramed an d constra ined bya larger interconnected and re inforcing system o f inf luences . I t is the inf luence of aninterconnected system th at this paper a ims to highl ight . In the course of exploring thesystemic s tructure and interconne ct ions of the curren t industrial developm ent m odel , i tbecom es very apparent wh ere there are s ignif icant gaps in empirical docum entation. Theframe wor k therefore is most useful in ident i fying priorit ies for emp irically-based research.

Tw o related characterist ics of the framew ork - i ts high level of genera l ity and itsindisputab ly pessim ist ic assessmen t - deserve com m ent at the outset . First , the discussion oftrends and connections betw een pol it ical, economic an d socia l processes is intentional lypitched at a b road, region-w ide level . I t is not regional ly-scaled as an attem pt to develop anal l-encom passing explanation, as that would be inap propriate g iven the variety of country-specif ic experiences . That sa id, there are a lso com m on constraints , di lem m as, and pol ic ies

4 Job growth in Barbado s between those two years was s imi lar to that o f Jamaica .How ever, export industr ia l act iv ity in Barba dos actual ly peaked in 1983 and has s incefal len off dram atically . The t im ing corresponds w ith the CBI program and theproli ferat ion of comp arable industrial export platforms across the Caribbea n payingw orkers substan tia l ly less than ha lf of earnings in Barb ados. As of 1988, averagehour ly earnings in Barbados ' EPZ s were s t il l US$2.10 , but s ince then the Barbad iangovernm ent , at tem pting to attract industry, has devalued the currency and therebyreduced t he average w age t o U S$1 . 83 (K l ak R ul li 1993; H os t en- C ra i g 1992 p10 7 ).

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across the Caribbean, owing to hom ogenizing features such as foreign debt, IMF agreem ents,trade policies from core countries, EPZ prom otion, and regional economic integration policy(CARICO M ; W ill 1991) . In fact , many countr ies across the Third W orld face s imi lardevelopmen t obstacles and challenges that should b e appreciated, lest geographically-specif icresearch fail to recognize how the globa l polit ical econom y shapes cond itions in theperiphery. Fail ing to appreciate the comm on threads of developmen t problems and policies inThird W orld contexts is , in m y judgem ent, worse than over-generalizing (see Corbridge1988) , particularly wh en, as in the present case, the genera lizations are to be com plem entedby m ore detailed and focused research. The prim ary intent in the present paper, however, isto establish a broad regional framew ork against which to assess the more nuanced industrialpolicies , records, and social impacts in individual countries. The constraints andinterconnections outlined by Figure 1 provide a backdrop to exam ine a problem such asJamaica's performance at "walking a tightrope" between locally-beneficial industrial policiesand those suitable to outside polit ical and econ om ic interests (Richardson 1 992 p191) . Localworkers seek higher w ages but these reduce Jam aica's abil ity to comp ete for foreignindustrial investment. Grow th in productivity would allow for increases in both w ages andprofits , but it is ham pered by sw eat-shop cond itions, reduced state social service provisions,including education an d health care, and falling living standards. 5Second, the assessm ent of industrial trends is pessimistic because it reflects the vastmajority of the l iterature that is empirically-based, as opposed to the considerable amoun tthat is promotional or w ishful (e.g . , compare W arr 1989 to Tu itt 1991). The d iscuss ioninterconnects the various problems identified in the literature related to Caribbeanindustrialization (e .g. , indebtedness, educational and industrial investment, wa ges andemp loyment) . These trends resonate w ith each other, thereby yielding an especially dismissoverall picture of Caribbean industrialization that is less apparent when examining theindividual components .Despite the severe constraints against Caribbean industria l development, how ever,things are not eq ually bad nor hopeless in all places. And, the policies of certain countrieshave cult ivated such things as local industrial l inkages m ore than the average. In response tothis variation, future research should extend to incorporate empirically-detailed material aboutCaribbean industrial processes that wil l complemen t and m odify the framewo rk, and specifyit for particular countries.2 . BR I EF R EVI EW O F T H E PR E- 1 9 80 CO NT EXT

This paper focuses on interconnected problems and issues of C aribbean industr ia lpol icy and deve lopm ent from the 1980s onw ard. Widespread poverty and deve lopment po l icyconstraints obviously did not emerge in 1980, although that year does m ark the start of along recess ion from wh ich the region is by no m eans ful ly recovered (Klak 1992b). Only afew of the m ore salient antecedent conditions that have led to m ore recent industrial trends

5 In fact , the Jam aican governm ent reports that productivity per work er, measured inl ocal currency , f e ll by 25% between 1975 and 1989 (LARR C 1990b) .3


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experience is the na ture of class relat ions w ithin the Caribbean region's his torical s tructuraldependency. Ab out two-thirds of the C aribbean's 35 m il lion people trace at least partia lancestry to African s laves , while the descenda nts of non-slaves are concentratedgeographical ly on the islands of Cuba and Puerto R ico (Richardson 1992). For reasonsrooted in the bitter experience of centuries of s lavery that lasted through m uch of the 19thcentury, Caribbea n w orkers have n ot accepted capital ist social relat ions without confrontat ion(Thou m i 1989). Ha ving won freedo m , c lass conscious ex-s laves and their descenda nts haveorganized them selves and struggled, in many cases vio lently, for access to land, betterwo rking condit ions and higher wages (Thom as 1988; Sunshine 1988; Richardson 1992).Caribb ean men ar e given greater emphasis than wom en in this interpretat ion because thelatter , partic ipating less in the formal sector , have had less direct expe rience with capital istsoc ia l re la tions (Portes 1985) . Wom en m ore than m en have w orked as sm al l sca le farmers ,as se lf-emp loyed informal traders and producers , and in the hom e (Ma ssiah 1989). Thesignif icance of prim arily male-based w orking c lass mil i tancy for the present topic is that i thas left an im pression of instabili ty that , a long w ith inadequate ski l ls for modern industry, asdiscussed below, discourages foreign industr ia l investment (box 15; New farm er 1986).Caribbean policy a imed at attract ing investors who can choose from am ong a myriad ofThird W orld product ion platform s, including many wh ere work ers have been systematical lyrepressed, as in man y Asian cou ntries , m ust therefore offer greater incentives to increaseprof i tabi li ty . These in turn r educe the C aribbean co untries ' benef i ts from the industry ,including their returns from public investments in such things as prom otion, si tepreparat ions , and infrastructure. The point is that Caribbean governmen ts must hyper-extendthemselves to lure in TNC s, thereby undercutt ing the local accrual of industr ia l benefits .A f i f th contextual i tem is population growth (box 5) . The population grow th rate forthe Caribbean has fa l len markedly in recent decades but , a t 1 .8% a s of 1992 , i s s ti l ls ignif icantly posit ive (UN 1992). Unlike ma ny discussions of underdevelopm ent (for a reviewsee Shrestha & P atterson 1990), I do not wish to place em phasis on the causal central ity ofthe "popu lation explosion" (for a cr it ique, see Yapa 199 1). How ever, in countries wh erem uch of the exist ing population is inadequately serviced, increasing num bers mean an evengreater need for decent em ployment opp ortunit ies, food and shelter . In Jamaica, for example ,wh ere the unem ployment rate rose to 21% by 1988, the population is currently increasing by30,000 per year (Griff ith 1991 p218; NTD B 1993) . This creates more obstac les to successfulindustr ia lizat ion, and, more broadly, greater challenges to developmen t polic ies that wouldm eet social needs.3 . FI SC A L & O T H ER C R I SES O F T H E 1 9 8 0S

The discuss ion now moves to the cr is is condit ions s ince the 1980s . In th is per iod,Caribbean gove rnmen ts have given considerable inf luence over policy to the IM F and otherinternat ional development agen cies in return for f inancial aid to assuage mou nting econom icproblem s (see Figure 1 , "The 1980s C risis") . Despite the po licy efforts to diversifyCaribb ean econo m ies and to attract jobs in the last two deca des, the region as of the late1980s was almo st universally characterized by substant ially higher unem ploymen t than in1970 (box 6; G riff ith 1991). Current structural problems ref lect and am plify those associated

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with the natural environm ent. Going back as far as the 1500s, climatological and hum an-induced natural disasters have undermined the fragile plantation economies of the Caribbean.Even in C uba, which has the region's best natural environment for sugar cane production,soils are depleted. After centuries of yields, Cuba 's soils, with all the mod ern techno logicalinputs cannot m atch the output w hen the colonial era comm enced. Besides declining fertility,the region as a who le may be experiencing more serious and frequent droughts in recentdecades (box 7). The greater frequency w ould be in part attributable to the loss of anincreasing share of the natural m oisture-retaining flora to additional agricultural export andsubsistence produ ction (Richardson 1992). A greater frequency of w eather-related disasters,including several devastating hurricanes in recent years, may also be attributable to (human-induced or natural) environmental change at a scale larger than the Caribbean region.Whatever their causes, natural disasters in the Caribbean have unquestionablyamp lified the region's trade imbalance an d revenue shortfalls in recent years, and havetherefore required additional foreign loan taking. In the 1980s, the US has cu t sugar importquotas for the Caribbean , which in itself would be enough to increase econom ic hardship.Production problems related to natural disasters have meant that Caribbean countries havehad difficulty filling even their limited quotas (LARRC 1990a). Owing to these variedsources, the reduction of export value from agriculture has exceeded the gains from industry,so that most Caribbean economies are now m ore diverse but with greater trade imbalancesand foreign debt (New farmer 1986; LA RR C 1988 a; Deere et al . 1990). An array of relatedfactors, from poor agricultural yields and prices, to wasted w indfall loans and politicalthinking that seeks industrial exports through TNC investment, have also led to governmentalinsolvency by the 1980s (box 8) . And w hile m uch has b een w ritten attempting to identify thecausal roots of the combination of financial problems in Latin Am erica and the C aribbean(box 8; Golub 19 91), for our purposes these problems p rimarily establish the context fromwhich C aribbean countries have aggressively sought TN C industrial investment during thelast decade. Given the financial crisis, country after Caribbean country has also had littlealternative than to approach the major international development agencies, most prominentlythe IMF, the W orld Bank, the Interamerican Development Ban k (IDB), and USAID, and toseek debt rescheduling, additional loans, and the IM F's 'blessing' (box 9A; M cBain 1990;Killick & Malik 1992; LAR RC 1992d).4 . P ROG R AMS OF P OLI T ICAL- E CON OMI C R E S T R U C T U R I N G

The international developm ent agencies offer temporary debt relief in exchange formajor reorganization of governm ent roles and policies, changes that require subsequentmacro-economic verification for ad ditional aid. Since the 1970s, "structural adjustment" hasinvolved three standard policy changes that are aimed to dow nsize governm ent, to open thedom estic economy further to international trade and investm ent, and to reduce the value ofthe local currency (boxes 9B-9D). In the 1980s, the IM F and kindred agencies added a fourthpolicy compon ent. Countries are now to invite TNC industrial investment by prepa ringextraterritorial sites outside local regulations (EPZ s), offering 10-15 year tax holidays, andallowing unrestricted repatriation of profits (box 9E; Deere et al. 1990). EPZs are intendedto generate much need ed low skill emp loyment and incorpora te the country into the6


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internat ional division of labor for m odern industries . Note that internat ional agen cy-prescribed EPZ policy dovetai ls with longer-term regional efforts to attract industr ia l TNC s,thereby y ie ld ing a hegem onic deve lopm ent mod e l .Repercussions of governm ental down sizing and EPZ prom otion are num erous andrequire the substantia l space devoted to them b elow. Econom ic opening, at a general levelinvolving reduced trade barriers , is a curious contem porary policy g iven that the Caribbeanhistorical ly has been extrem ely trade dependen t (Deere et a l . 1990) . Trade depen dency iscaptured in the his torical adage that ' the Caribbean produ ces what doesn't consum e andconsum es what i t doesn't produ ce' (Richard son 1992) . Given the region's long-termvulnerabil i ty to boom s and busts in the g lobal pol it ical econom y, it would ap pear, in theabstract at least , that one thing the region do es not need m ore of is greater econom icexposure.The related issue of currency devaluation, intended to reduce dem and for imports andtherefore imp rove the trade balance, by definit ion increases the price of im ported good s, andso imm ediate ly increases consum er costs . In fact , a broadly- inc lus ive s tudy of the im pacts o fIMF -st ipulated restructuring agreem ents across 17 Third Wo rld countries , includingDom in ica , the Dom in ican R epubl ic and Jam aica , revea led that one o f the m ost cons is ten teffects is h igher consum er prices and lower l iv ing standards, concentrated am ong the poor(Ki ll ick & M al ik 1992; simi lar ly see P astor 1987) . For heav i ly trade d ependent reg ions suchas the Caribbean , currency devaluat ion trans lates most direct ly and proport ionately intohigher consum er costs and greater impo verishm ent (boxes 10 & 17) . The im pact is long-termgiven the diff iculty of reorienting consump tion toward local ly produced goo ds fo l lowing f ivecenturies of re l iance on impo rts , and considering the p ervasive cultural inf luences of USconsumer ism (Sunsh ine 1988; Richardson 1992) .The im pacts o f government spend ing cu ts are more compl ica ted . Th is owes in par t tothe fact that the distr ibution of the cuts derives from a local pol it ical econom ic context that isnot adequately incorporated into the IM F an d kindred polic ies . In fact , pol icy prescriptionsfrom the international developm ent agencies are notably generic across country contexts(Kil lick & M alik 1992) . There is considerable sentiment in the developme nt comm unity ,publicly art iculated by the l ikes of Harvard Econo mist Jeffrey Sachs , that restructuringpol ic ies can and should be gener ic , and appl ied from contexts as d iverse as Ch i le , M orocco ,Kenya, Jam aica and even R uss ia (Cohen 1992; 1993) . To encourage universa l appl ication ofdeve lopmen t pol icy , USAID, for example , in tent ional ly rotates deve lopment of f icers amo ngi ts regional offices lest they becom e undu ly attached to (and appreciat ive of) place , peopleand cu ltural context (Klak 1992a).To the extent that internat ional developm ent agency prescript ions for governmen tdown sizing do target mo re wasteful bureaucratic e lements while encouraging eff ic ientexpansion of others , the actual implem entation of those policy changes is left to nationalactors . The IM F's operational pol icy specif ical ly restr icts d irect manipulation of the internalaffa irs o f a country (Deere e t a l 1990 p.39 c f ) . The IM F is wel l know n to sof ten or hardenthe f inancial requirements i t s t ipulates to a country depend ing on w hether that country is inor out o f favor of a major donor coun try such as the US (Ki l lick & M al ik 1992) . The IM Fthereby has ind irec t impacts on national pol it ics , yet i t cannot direct ly m anipulate internalgovernm ent policy . On e may del ight in this brake on imp erial ist adventu res . H owe ver, such

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restrict ions also m ean that entrenched com prador and othe r privi leged segm ents of a ThirdW orld country's pol itical economy control the im plementation of the austerity polic ies andwil l continue to protect their own interests during downsizing (Cardoso and Faletto 1979;M iller 1992) . The impacts of such an arrang em ent is il lustrated by Jamaican h ousing policy.The re is less funding of basic shelter ass istance wh ile pow erful bureaucracies rem ain largelyintact , a lthough the y contribute even less than before to m eeting the progress ive social needsfor wh ich they w ere ostens ib ly created (box 12A; K iak 1992a; 1993) .No m atter what the interna l pol itics of s tate social service provis ions m ay be inindividual Caribbean countries , however, austerity program s are very l ikely to reduce thefunding, quan tity, and qu ality of social services . As the president of the C aribbeanDev elopme nt Bank recen t ly described i t , the experience of s tructural adjustment to Caribbeanpeop le has meantlong queues for the purchase o f s taple food, inc luding even those we produceourselves; health services that have run ou t of essentia l m edicines and otherbasic i tem s; schools , espec ia l ly those serv ing the rural poor , that som et imeshave teachers b ut no teaching supplies; famil ies unable to send their chi ldrento school because they can af ford ne i ther lunch nor bus fares .. . (LARR C

1992c).Th e negative impact on edu cation is particularly re levant. For exam ple, in the decade from1976-77 to 1986-87 , dur ing which t ime Jam aica reached f ive agreements w i th the IMF, theM inistry of Education's expenditures fe l l quite consistently. The real value of educationalspending d ecl ined by 34% as of the latter date , wh ile matriculat ion of cert ified teachers fe l leven m ore precipitously (M il ler 1992) . Edu cational expenditures in the Dom inican Republic(W orld Bank 1992 p238) and the reg ion in general (Deere e t a l . 1990 p11) have moved inthe sam e direct ion. Drast ic educational cuts do not cult ivate a skil led work force that couldfoster com petit ive local industr ies , attract more technologically sophist icated outs ideindustria l investm ent, or develop local l inkages to TNC s such as comp uter servic ing (box12B; Low enste in 1985).Prescribed governm ent budget cuts are not restr icted to social services, but rather areaime d at reducing the overa ll role of the state , and ha ve been at a suff ic ient aggregate scaleas to require spending reductions across m inistry portfolios . Draw ing on the East Asianhistorical experiences , public investm ent in b o t h educat ion and industry is necessary (but notsuff ic ient) for internationally com petit ive dom estic industr ia l f irms. In the con temporaryideological and f inancial c l im ate , it would be d iff icult for governm ents to invest and fostergrow th in dome stic industry in a way that looks anything l ike the record of the East AsianNICs (box 11A; Gereff i & W yman 1990). Il lustrat ing the problem is the fact that only two(Trinidad & T obago and G uyana) of the twelve countries in the English-speaking Caribbeanemployed any sc ient is ts and engineers in R&D in 1987 , whi le patent deve lopmen t wascom parably l im ited in recent years (box 11B; G rif fi th 1991). Even in Barbad os , which was

precocious in Caribbean export-assem bly policy, f irms inquiring about EPZ s in the mid-1980s found no ava ilable electrical engineers (Low enstein 1985). Th e region's lack of skil ledbusiness managers has m eant that i t has had, as the director of the Caribbean TourismOrga nization recently put i t , "to import a great deal of people wh o man age the major aspectsof [ it s ] econom y" (LARR C 1992a p1) .8


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A context in which C aribbean governm ents are downsizing, privatizing, and reducingthe protection of local f irms and m arkets is r ipe for increased market pen etration by TNCs,as has occurred under similar circumstances in man y parts of the Third W orld (Gwyn ne1990; Griff ith 1990). Hard emp irical evidence to assess the perform ance of Caribbeandom estic industr ies during restructuring is part icularly lacking, how ever. Overw helmingly ,research has focused on extern al industrial policies and investm ent (e .g ., Newfarm er 1986;Schoepfle and Perez-L 6pez 1989). One study of a successful Jam aican industry servicingprimary product export sectors suggests that extra-regional firms control the internationally-com petit ive technology, and C aribbean com panies can gain access to it only in its wa ningyears (Girvan & M arcelle 1990). In the interim prior to more em pirical research on thequest ion of the re lative comp etitiveness of Caribbean f irms, trends suggest that restructuringhas m ade the region i tself less industr ia lly competit ive, and thereby h as further dam pened theprospects for an economic grow th that is internally-based rather than enclave-restr icted(boxes 11C & 11D) .Export Processing Zo nes have proliferated across the Caribbean since the 1970s.Virtually every country now com petes for the same of fshore TNC investment in productassembly operations. Governm ent developm ent agencies are devoted to activit ies such asadvertising their E PZ packages , entertaining prospect ive investors , and preparing industr ia lsites . As a rule, operations attracted to EPZ s are under com petit ive pressures and seek a lowcost environment in which to assemble standardized products with high labor demands suchas clothing and electronic compon ents (box 13A). Thus it is impo rtant to note that TNCs areinvesting in the Caribbean to m inimize production costs , which is contrary to thedevelopm ent interests of the host country. Jobs given to locals in the EP Zs are alm ostent ire ly low to semi-ski ll ed (Long 1983; Deere et a l . 1990) . The p ay l evel s across the regionare general ly about tw ice the local poverty-l evel minimum wage, or $ .58-1 .83 per hourincluding f r inge benef i ts as of 1991 (box 13A; Hos ten-Craig 1992 p 107) .Caribbean gov ernm ents are investing substantial resources in EPZs, but w e have l itt lesense of the scale of costs incurre d. EPZ prom otion is a hegemonic development project,inasmuch polit ical e l ite from both core an d periphery consensually vocalize their support of it(Jessop 1982). In such an arrangem ent it is predictable that calculations of the true d irect andindirect social costs would no t be included in the discourse. Despite the paucity of data,how ever, i t is not d i f f icul t to im agine som e of the im pacts of these cos t s . Given thatgovernm ent budgets have been reduced overall , whatever the not insignificant costs are, theyreduce the fund ing available for social services (box 12A). Even m ore impo rtantly, althoughlike social costs , rarely entertained, wholesale orientation toward a developm ent m odelem phasizing EPZ s and other non-traditional export sectors closes off options for alternativeuses of l im ited funds, resources , and people pow er. As Figure 1 suggests , Caribbean pol icieshave becom e entrenched along the path established by the conventional wisdom aboutdevelopm ent, while s imu ltaneously, alternative approaches becom e m ore distant and elusive(Yapa 1991; New Int ernationalist 1992).The C aribbean has w holeheartedly sought a subordinant role in the new internationaldivision of labor for mo dern industries , but outside investors have been u nenthusiastic aboutand restrained in incorpora ting the region. As noted in the introduction, EPZ p olicies, inconcert w ith recent import po l ic ies from the US, the E C, and C anada that increase the

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profitability of Caribbean assem bly operations for TNC s, have dramatically increasedindustrial em ployment in and exp orts from the region. Howev er, Caribbean industrial growthand signif icance is less impressive w hen on e considers the region's geogra phical accessibil ityto the US ma rket. Recent job growth from US m anufacturing investment in far m ore distantThird W orld countries, such as M alaysia, the Phil ippines, and Indon esia, has been m oreimpre ssive than in the Caribbean (Dicken 1992 pp6 6-7) . Caribbe an EPZ grow th is also lessimpre ssive when gaug ed against ma cro- indicators for each country, such as the size of thework force and economy as a w hole , and, as noted ear l ier , the increas ing unem ploymentrates . As o f 1988-9 , EPZ em ployees as a share o f the w ork force ranged from 2% inJamaica and D ominica , to 6% in the Dominican Republ ic and St . Vincent, and 8% inBarbados (box 13A; Schoepf le & P rez-LOp ez 1992 p142) .Considering the policy incentives from both the core and the C aribbean thatencourage T NC industrial investmen t, in addition to the com petit ive pressures on f irms to cu tlabor costs and the region's access ibi li ty to the huge U S m arket , i t wou ld seem th at weshould be ask ing why there are not more TNC assembly operations in the Caribbean. Theansw er seem s largely related to negative perceptions of the Caribbean's wor king class. Asal luded to earl ier, the region has a history of wo rking class rebel l iousness (arrow 4-13A).W orking class males hav e been relatively organized, particularly in primary sector industriessuch as export agriculture, bauxite and petroleum, depending on the country. ' Strikes andurban r iots have frequently responding to economic dow nturns, unemployment and higherconsum er prices (Sunshine 1988; Richard son 1992). The effect of these wor king classmovem ents on the percept ions of outs ide investors i s the of t repeated com ment that theCaribbe an is a relatively unstable investment environm ent (e .g. , New farm er 1986; Preeg1992) . Pro-business policy incentives from C aribbean govern m ents run against , but do notovercom e, this perception, which is t ied mo re to work ers than polit ic ians, although investorsof ten cons idered them uncooperat ive as wel l (Girvan & Bernal 1982) . Another comm onnegative perception of the region, historically rooted in environm ental determinism (Peet1985) and also l ikely to influence the investor's view, is that Caribb ean w orkers are lazy andunpro ductive, and lack punctuality (Lowenstein 1985; Richard son 1992) . This view is notincom patible with the perception of instability; they com bine to create an impression of acontext in which w orkers demand mu ch w hi le de liver ing l i t tle .These elem ents of regional unattractiveness as a production site apply m ore to m alesthan to fema les. For a variety of reasons, including negative perceptions of the male w orkingclass and wom en's relent less responsibi l ity for household provis ions (Klak & H ey 1992),TNC s largely avo id men and hire w omen in C aribbean EPZs . In fact , wom en ho ld them ajority o f jobs in EPZ s worldw ide (Dicken 1992 p187) . This i s because , com pared to m en,they are sa id to be more doci le and dexterous (Brydon & C hant 1989) . How ever, in

6Fem ales have not been pass ive in Caribbean industry . For example , women's groupsjoined trade unions in an unsuccessful f ight against establishing EPZs in Trinidad in1988, c it ing exploitation and adverse w ork cond itions in zones elsewh ere as reasons tooppose them (LAR RC 1988b; for a longer term perspect ive on female garm entworkers in Trinidad & T obago , see Red dock 1990) .10


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Jamaican EP Zs, wom en fill 95% of the jobs, more than in any Asian country or M exico(Dicken 1992 p187). Wom en comprise over 90% of the E PZ w ork forces in otherCommonwealth Caribbean countries as well (Schoepfle & Perez-L6pez 1992 p144; Goss &Knu dsen 1991). The virtual universal hiring of Caribbean fem ales cannot be explained by alack of available male w orkers, given the high unemploymen t rates, or by women's priorindustrial experience. Jamaican w omen , for example, comprise one of the smallest shares ofnon-EP Z industrial workers in the Third W orld (Dicken 1992 p187). Instead, foreignindustries prefer Caribbean wom en over m en because the former are less organized and canbe paid less (Safa 1990).These structural adjustment-related trends have produced a painful example ofwom en's increasing double burden (Brydon & Chant 1989). Women in Caribbean urbanareas are drawn into the form al sector production at same time that state contributions towork force reproduction in forms such as urban services, shelter assistance and edu cationalopportunities are reduced. As Trinidad and Toba go's Prime M inister A N R R obinsonexplained while implemen ting an IMF agreement, "the notion that the state could somehowbe a tireless mother, forever providing, a guarantor of welfare, and a haven of security"must be abandoned (LA RRC 1989). As a result , wom en have m ore production andreproduction responsibilities, requiring more h ours of work , at the same time that the cost ofliving is rising (box 10). As has been empirically detailed for G uayaquil, Ecuador (M oser1989), wom en are working longer hours but have lower purchasing power, a situation thatrepresents a substantially reduced living standard (box 17).TNC assembly operations locate in Caribbean countries because of the effectivesubsidies' from EPZ -related policies and cheap local labor. Howe ver, industrial workers,especially those paid low wages in high cost of living environments by profitable TN Cs, willinevitably begin to apply pressure for greater remuneration and m ore benefits. EPZ taxholidays also eventually expire, and then contribute to the incentives for TNC s to relocate tolower cost environments (boxes 14A & 14B). Tend encies toward increased taxes and w ages,which w ould increase the share of total value produced that accrues locally, reduces thelocation's attractiveness to the TNC. In several cases Caribbean governm ents, fearing oreven being threatened by the loss of an assemb ly plant if taxes are charged, have ex tendedtax holidays several more years. EPZ w orkers have often pursued higher wages byattempting to organize themselves, but TNC s have been intolerant of unions (Deere et al.1990; LARRC 1991c) .A final notable issue that does not bode w ell for Caribbean industrial expansion is thetendency for technological innovations in production processes to reduce the dem and for lowcost, offshore sites featuring low-skill assembly of standardized produ cts (box 16). Thegeography of m anufacturing and technological change involving the Caribbean has yet to be

7On m easuring effective subsidies built into government program s, see Klalc (1991). Inthat example, the governm ent-allocated resource of concern is housing assistance, andthe subsidy is measured as the cost difference between governm ent programs andprivate market offerings. Similar calculations could compare costs for industries inEPZ s to those outside of them, both in the Caribbean and the US.1 1


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uncovered an d w ritten, but the scattered evidence presently available suggests thattechnological innovations cause industrialists to repatriate assembly op erations to coreregions. The current evidence suggesting that m anufacturers' interests in Caribbean sites isl imi ted in sca le and tem porary in scope i s based on (1 ) the evo lut ion o f reg imes o faccumu lation, and m ore specif ically, the current transit ion from a predom inance of Fordistf irms to m ore f lexible , core- located production system s (Lipietz 1986; Storper 1991); (2) theboom and bust temporal trajectory of industr ia l exports per C aribbean country, suggestingthat Caribbean sites undergo rapid changes of status within industrial location logic and thatf irms respond to those change s by being p art icularly foot loose (Klak & R ull i 1993); (3)extrem ely short produ ct l ife cycles in electronics (especially sem iconductors) , thus far aprincipal sector in the EPZ s (Dicken 1992; Goss & Knu dsen 1991), and suggest ingcorrespondingly l im ited interest in Caribbean assem bly sites; (4) emerging com puter-basedinnovations in clothing production, which traditionally has been exceptionally labor intensiveand therefore attracted to offshore assem bly, now becko n it back to high-skill , capital-intensive core locat ions (Dicken 1992); and (5) new US trade p ol icies toward L atin Ame ricaand the Caribbean m ust a lso be cons idered . These inc lude NA FTA and the e l iminat ion ofPuerto R ico's principal indu stria l advantage, 936, wh ich, even in the d iscuss ion stage, arealready reducing investmen t in the Caribbean (Hosten-Craig 1992; LAR RC 1992b; 1992e;Hern andez Colon 1993). When im plem ented the policies are l ikely to diminish substantiallythe relative profitabil ity of investm ent, and therefore TN C interest , in Caribbean coun tries.Although n either of these concep tual, technological , and p olicy trends is indisputablypredictable to have a huge negative impact on the C aribbean, together they cast a darkshadow over the future of the region's industrialization program s. Others have evaluateds imilar trends as those presented above and remain hopeful about future C aribbean industr ia lexpans ion (Goss & K nudsen 1991; Goss & Conw ay 1992) , but current empir ica lly -basedevidence d oes not lead to that conclusion.5 . C O N C L U D I N G C O M M E N T S

The essence o f Figure 1 is that overall , Caribbe an w orking people, particularlywom en, have greater production and reproduction responsibilit ies and thus, when they canf ind formal employm ent , are w orking harder in low wage and temp orary jobs , whi leCaribbean econom ies continue to deteriorate around them . The interconnected trends in thefigure eventually lead to the sam e conclusion: more pove rty and lower l iving standards forthe Caribbea n working class (box 17). These trends are corrob orated by statist ics comp iledfor Lat in Am erica and the Caribbean as w hole for the period 1985 to 1992 . Rea l GDP i s up15% as a result of TNC industrial production and other export diversif ication, but externaldebt has r isen more sw if tly than that (a lmost 19% ). At the same t ime, the rea l minimumwage has fa l len tw o- thirds in va lue (NAC LA 1993, p17). '

8 In the c i ted s tudy, the fa l l in rea l w ages i s measured for the ma inland coun tr ies o f theregion, but is l ikely to be s imilar for Ca ribbean countries (e .g. , Deer e et al . 1990p56) .12


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The nu m erous trends al l contribut ing to greater poverty and lowe r l iving s tandards(box 17) suggest the operation of what Sayer (1984 p100) has termed " an over-determinedsystem of causal ity:" "A situation is overdetermined w hen two or m ore mechan isms eachs imultaneously produce the sam e e f fec t" (Klak 1992 p106) . W ith in such a sys tem, m inortinkering with policy levers , such as funding job training program s, for example, wil l havel itt le impact on the im poverishmen t. To the contrary, causal overdetermination creates as ituation whereb y the effects of change in a variable within the sys tem m ay be oppo site towh at the effect would be a t a b i-variate level . As Sayer (1984 p100 ) puts i t , "countera ctingforces can override and conceal the effects of the operation of a particular mecha nism." So,for example, cutt ing t ies with the IM F or w ith TNCs interested in industr ia l export p latformsis l ikely to increase poverty ra ther than decrease i t . At a su perfic ia l level , the l ikely greaterpoverty brough t about by severing t ies with the international interests suggests , as Caribbeanpol icy makers of ten say , that "there i s no other wa y" (LAR RC 1991b) . This i s true so longas the gam e is p layed within the interlocking structure of dependency outl ined in Figure 1.Hopefully Ca ribbean industr ia l izat ion efforts aren't universally as g loomy at the levelof em pir ica l deta i ls . As I have endeavored to note , hard ev idence i s thus far lacking form any of the crucial issues . Th is exercise wil l help to draw attention to any dist inct ive trendsin particular country contexts that suggest that there is cause for greater hope. It is a lsoposs ible that econom ic sectors other than indu stry, such as tourism a nd non -tradit ionalagricultural exports , hold m ore prom ise . This is by no mean s assured, however, g iven thatthese sectors to a large extent operate within and are constrained by the sam e structuralcond itions outl ined (e.g., foreign de bt, trade imb alance, lack of local capital , w eak skil ldevelopm ent, negatively affected by NA FT A, etc .) . Caribbea n tourism has a large foreignown ership com ponent and thus exports the m ajority of i ts profits . It is a lso particularlyvulnerable to exog enous v ic iss i tudes , be they econo m ic ( e .g . , recess ion in the core) orpolit ical (e .g ., US tourists ' fear of fly ing during and after the P ersian Gulf W ar; LAR RC1991a) .

Literature CitedB a r r y , T o m , B e th W o o d a n d D e b P r e u s c h 1 9 8 6 The O ther Side of Paradise: Foreign Contr olin the Carib bean. Grove Press .Bel is le , F . 1984 "Tourism and food im ports : The case of Jamaica." Econom ic Developm entand C ultura l Change . Vol . 32, pp 819-42.Brydon, Lynn e and Sy lv ia Ch ant . 1989 . W omen in the Third W orld: Gender Issues in R uraland Urban Ar eas. New B runswick: Rutgers University Press .Card oso , F . and E . Fa le t to . 1979 . Dependency and Developm ent in Lat in Am erica . Berkeley:University of California Press .Codr ington , Haro ld and DeL is le W orre l 1989 . "Trade and Economic G rowth in Sm al l

Deve lop ing Econom ies : Research on the Car ibbean ." Economic A djustm ent Pol iciesfor Sm all Nations: T heory and Exper ience in the English-Speak ing Caribb ean. PraegerPu bl i shing , NY. pp.28-47 .Cohen, Stephen F. 1993 "Am erican pol icy and Russ ia ' s future" The Nation Vo l . 2 5 6 , No .14, pp476-85.1 3

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Industrialisation Impacts