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What is a maquila?


Makila is an Arabic word meaning the amount of flour retained by the miller for his work in grinding a sack of corn.

The system is applicable today to the garment industry and assembly of electronic gadgets. The capital, management and machines come from the rich country where the finished product is sold. What the worker is paid is a tiny part of the retail price. A typical example: the Nicaraguan worker who sews a pair of J.C. Penny Arizona jeans gets 11 cents of the garment’s $14.99 list price; 18 cents for sewing a pair of $118 Liz Claiborne pants.

Transfer of technology to the poor country is minimal. On the contrary, the process at times involves “de-skilling,” the loss of sophisticated traditional techniques. An example is the employment of Guatemala’s Mayan women, the custodians of the art of creating intricate embroidery, in repetitive stitching of hems on a sewing machine. Preference is given, because of their manual dexterity, to these Mayans from Guatemala’s northern altiplano.

Reflecting the contemporary globalization of industrial production, the maquila has spread throughout much of the Third World. It flourishes in all Central America and the Caribbean, Malaysia, Singapore, China, even the South Sea Islands. Countries with 50 to 80 percent unemployment offer all kinds of incentives, and the United States also offers assistance.

President Clinton as a candidate in October 1992 boasted that the State Department had spent $289 million to help create the infrastructure for maquilas in Central America. He neglected to note the negative impact on jobs in the United States. The percentage of workers in industry here has dropped precipitously from 33 percent in 1966, to 7 percent in 1996 and a projected 0.2 percent next year.

Capital for the maquilas comes from the major rich countries, United States, Britain, Germany and Japan, and also from the Asian Tigers, Hong Kong, Taiwan, Singapore and South Korea. The industry is posited on the concept of free zones, free in the sense of freedom from import duties and local taxes. Materials, equipment and machinery can be imported to a free zone without paying duties or taxes and without posting a bond.

A business group can now set up a free zone anywhere within a country and rent out space to maquilas. The general practice is to protect the entire zone with brick or concrete walls 15 feet high, at times topped with coiled razor wire. Guards with semiautomatic weapons are posted at all entrances day and night. What happens inside, even the treatment of the workers, is effectively out of the jurisdiction of the host country. Some laws still apply in principle, but seldom in practice.

National Catholic Reporter, August 13, 1999