This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/global-development/poverty-matters/2012/apr/30/export-processing-zones-sweatshops-development
The article has changed 3 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Are export processing zones the new sweatshops, or drivers of development? | Are export processing zones the new sweatshops, or drivers of development? |
| (40 minutes later) | |
| Where does Nike make its trainers? Or Wrangler its jeans? In the same place Raleigh make its bikes, Philip Morris makes its cigarettes, Korean companies make LED lights, and giant corporations like Walmart, Mothercare, Tesco and Reebok make practically everything from pharmaceuticals to fishing rods and baseball caps. The Chittagong export development zone (EDZ) in Bangladesh is the capital of globalisation, the plumb centre of global free trade, and the reason, it could be argued, that industrialised countries don't make much any more. | Where does Nike make its trainers? Or Wrangler its jeans? In the same place Raleigh make its bikes, Philip Morris makes its cigarettes, Korean companies make LED lights, and giant corporations like Walmart, Mothercare, Tesco and Reebok make practically everything from pharmaceuticals to fishing rods and baseball caps. The Chittagong export development zone (EDZ) in Bangladesh is the capital of globalisation, the plumb centre of global free trade, and the reason, it could be argued, that industrialised countries don't make much any more. |
| This month, I was invited to a Youngone factory, one of 17 that the giant Korean conglomerate has making clothes and shoes for the world in the Chittagong zone. That people died in riots here in 2010 – and that the factory was ransacked by Bangladeshi workers angry that the government had not increased their wages – was not mentioned. The intention was to show Bangladesh as a modern manufacturing centre. | This month, I was invited to a Youngone factory, one of 17 that the giant Korean conglomerate has making clothes and shoes for the world in the Chittagong zone. That people died in riots here in 2010 – and that the factory was ransacked by Bangladeshi workers angry that the government had not increased their wages – was not mentioned. The intention was to show Bangladesh as a modern manufacturing centre. |
| It's certainly that. Outside the giant works, there were manicured lawns and clean streets; inside, armies of young, mainly female workers toiled silently in masks on long production lines. Together, in this one factory, the 3,500 workers make a staggering 14,000 pairs of shoes a day, or more than 5m a year. We were told not to say who the shoes were being made for, or to talk to the workers, but it's no secret this factory makes trainers and clothes for brands like Nike, North Face and Timberland. | It's certainly that. Outside the giant works, there were manicured lawns and clean streets; inside, armies of young, mainly female workers toiled silently in masks on long production lines. Together, in this one factory, the 3,500 workers make a staggering 14,000 pairs of shoes a day, or more than 5m a year. We were told not to say who the shoes were being made for, or to talk to the workers, but it's no secret this factory makes trainers and clothes for brands like Nike, North Face and Timberland. |
| Bangladesh is proud of its Chittagong zone, not just because its 137 factories export $1.6bn worth of goods a year, and last year invested $930m, but because it claims to have the cheapest labour in the world and there is a desperate need for foreign currency and jobs. China's minimum wage in its EPZs is $250 a month, Indonesia's $135 and Pakistan's $80. But corporates manufacturing goods in Chittagong need pay workers an average of only $48 a month, said the zone manager. That's about $1.50 a day. | Bangladesh is proud of its Chittagong zone, not just because its 137 factories export $1.6bn worth of goods a year, and last year invested $930m, but because it claims to have the cheapest labour in the world and there is a desperate need for foreign currency and jobs. China's minimum wage in its EPZs is $250 a month, Indonesia's $135 and Pakistan's $80. But corporates manufacturing goods in Chittagong need pay workers an average of only $48 a month, said the zone manager. That's about $1.50 a day. |
| Are these factories the new sweatshops, as some developments groups say? People are paid more to work in the zone than in factories beyond the gates and, from what I could see in the two works I visited, the conditions – albeit perhaps not surprisingly – looked good. But the pay rates, which are set by government and not by the companies, are terrible. An apprentice in a Chittagong EDZ factory need only be paid a meagre $20-22 a month (less than $1 a day), unskilled workers $38 a month, semi-skilled $45 and skilled workers up to $60 – all for a six-day 48-hour week. No unions or strikes are allowed, not many workers stay more than a few years, and it is understood that on average only a quarter of the workforce gets the minimum wage. | Are these factories the new sweatshops, as some developments groups say? People are paid more to work in the zone than in factories beyond the gates and, from what I could see in the two works I visited, the conditions – albeit perhaps not surprisingly – looked good. But the pay rates, which are set by government and not by the companies, are terrible. An apprentice in a Chittagong EDZ factory need only be paid a meagre $20-22 a month (less than $1 a day), unskilled workers $38 a month, semi-skilled $45 and skilled workers up to $60 – all for a six-day 48-hour week. No unions or strikes are allowed, not many workers stay more than a few years, and it is understood that on average only a quarter of the workforce gets the minimum wage. |
| "We do not allow unions, only workers associations," said the manager. "They can discuss matters with their companies. They are happy." | "We do not allow unions, only workers associations," said the manager. "They can discuss matters with their companies. They are happy." |
| Foreign businesses are treated royally. Bangladesh has a deep energy crisis, with demand massively outsripping supply, yet companies in the zone get cheap, reliable power, as well as generous 10-year tax holidays, freedom from red tape, duty-free imports, immunity from national laws, cheap labour and low rents. In Chittagong, companies pay just $2.20 monthly to rent a square metre of space, and I was told that the annual rent paid to the Bangladesh government by all the factories on the giant site was just $4m a year. So how much had Bangladesh invested in building the factories for the companies? No one could say. | Foreign businesses are treated royally. Bangladesh has a deep energy crisis, with demand massively outsripping supply, yet companies in the zone get cheap, reliable power, as well as generous 10-year tax holidays, freedom from red tape, duty-free imports, immunity from national laws, cheap labour and low rents. In Chittagong, companies pay just $2.20 monthly to rent a square metre of space, and I was told that the annual rent paid to the Bangladesh government by all the factories on the giant site was just $4m a year. So how much had Bangladesh invested in building the factories for the companies? No one could say. |
| Globally, there are now several thousand EDZs. But a wall plaque in the Chittagong zone says this one was set up by Robert McNamara, the legendary head of the World Bank, in 1980 and was one of – if not the – first in the world. Born in the era of structural adjustment and maximum control of economies by the bank and the International Monetary Fund (IMF), the zone could be seen as the spark that led to the blaze of globalisation and neoliberalism that has dominated global development for 30 years, accounting for the massive growth and wealth of corporations like Walmart, Tesco, Reebok, the IT sector, Philip Morris and thousands of other multinationals. | Globally, there are now several thousand EDZs. But a wall plaque in the Chittagong zone says this one was set up by Robert McNamara, the legendary head of the World Bank, in 1980 and was one of – if not the – first in the world. Born in the era of structural adjustment and maximum control of economies by the bank and the International Monetary Fund (IMF), the zone could be seen as the spark that led to the blaze of globalisation and neoliberalism that has dominated global development for 30 years, accounting for the massive growth and wealth of corporations like Walmart, Tesco, Reebok, the IT sector, Philip Morris and thousands of other multinationals. |
| So what are these EDZs good for? Does Bangladesh benefit apart from the jobs? The World bank says they "provide a country with foreign exchange earnings by promoting non-traditional exports, create jobs and generate income as well as helping technology transfer". Their critics say they favour the export market rather than the domestic market, exploit poor countries, and allow relaxed environmental and safety standards. The organisation War on Want and local development groups argue that the wealth created has made little improvement to the lives of ordinary workers, despite the creation of millions of jobs. | So what are these EDZs good for? Does Bangladesh benefit apart from the jobs? The World bank says they "provide a country with foreign exchange earnings by promoting non-traditional exports, create jobs and generate income as well as helping technology transfer". Their critics say they favour the export market rather than the domestic market, exploit poor countries, and allow relaxed environmental and safety standards. The organisation War on Want and local development groups argue that the wealth created has made little improvement to the lives of ordinary workers, despite the creation of millions of jobs. |
| John Vidal travelled with the Bangladesh government |