Bananas, Maquilas and Volunteers
1 Comments Posted by Alex Guerrero on Tuesday, March 03, 2009 at 8:35 PM.
El Salvador Fact of the Day: "Una cora" is "one quarter", and it's pronounced exactly this way in Spanish. The Salvadoran economy is dollarized, by the way.
Taste of the Day: Pupusas rellenas de Chicharrones y Queso
Drink of the Day: Licuado de Guineo (Banana-like milkshake)
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Compared to their other Latin American peers, which in the last years have heavily relied on commodity-driven growth, Central American countries and Mexico are quite industrialized. Much of their industrial network is channeled through the Maquila system.
The maquila economic system surged in small economies which are open to "free" trade, being very succesful attracting foreign direct investment to those zones free of taxes and with meagre labor regulations. The resulting economic equilibrium is one where the citizenry can't benefit from the economic activity -no taxes to finance public services- and the economic impact of those investments is limited. The later is especially true because of the limited multiplier effect in the economy derived from low wages paid in the maquila and the worse job conditions compared to the rest of the economy. In addition, other domestic businesses are harm by the maquilas (factories, call centers, service providers) because they can't compete in the same conditions, and they end entering in a race-to-the-bottom in salaries and labor conditions.
It is true that, because of the maquila system, El Salvador is quite industrial -in textiles, for example-, as it is also the case of Mexico or Central America. And if your goal is to transform your society in the gray outskirts of Shanghai, keep trying. But if you aspire to a different society, much more European, Chilean or Canadian, then this equilibrium is really toxic.
The most frustrating issue is that, even if the left party wins the next elections, there is little to do in the short run. Without regional coordination, any movement to increase the tax pressure or to improve labor conditions in the maquilas, will produce a stampide to the closest country. This is why they are also known as "golondrinas" (swallows).
Someone told me about a Canadian non-profit, named Center for Exchange and Solidarity, whose mission is to be an international electoral observer during the upcoming Salvadoran presidential elections (03/15). As soon as I heard about them, I got excited and immediately contacted them to join their crew in the Election Day. Unfortunately, it seems not to be cheap to volunteer for a good cause, and I'm still figuring out where to get from the almost $300 necessary to join them.
Taste of the Day: Pupusas rellenas de Chicharrones y Queso
Drink of the Day: Licuado de Guineo (Banana-like milkshake)
-----------------------------------------------------------------------------
Compared to their other Latin American peers, which in the last years have heavily relied on commodity-driven growth, Central American countries and Mexico are quite industrialized. Much of their industrial network is channeled through the Maquila system.
The maquila economic system surged in small economies which are open to "free" trade, being very succesful attracting foreign direct investment to those zones free of taxes and with meagre labor regulations. The resulting economic equilibrium is one where the citizenry can't benefit from the economic activity -no taxes to finance public services- and the economic impact of those investments is limited. The later is especially true because of the limited multiplier effect in the economy derived from low wages paid in the maquila and the worse job conditions compared to the rest of the economy. In addition, other domestic businesses are harm by the maquilas (factories, call centers, service providers) because they can't compete in the same conditions, and they end entering in a race-to-the-bottom in salaries and labor conditions.It is true that, because of the maquila system, El Salvador is quite industrial -in textiles, for example-, as it is also the case of Mexico or Central America. And if your goal is to transform your society in the gray outskirts of Shanghai, keep trying. But if you aspire to a different society, much more European, Chilean or Canadian, then this equilibrium is really toxic.
The most frustrating issue is that, even if the left party wins the next elections, there is little to do in the short run. Without regional coordination, any movement to increase the tax pressure or to improve labor conditions in the maquilas, will produce a stampide to the closest country. This is why they are also known as "golondrinas" (swallows).
Someone told me about a Canadian non-profit, named Center for Exchange and Solidarity, whose mission is to be an international electoral observer during the upcoming Salvadoran presidential elections (03/15). As soon as I heard about them, I got excited and immediately contacted them to join their crew in the Election Day. Unfortunately, it seems not to be cheap to volunteer for a good cause, and I'm still figuring out where to get from the almost $300 necessary to join them.
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