RECENT CARIBBEAN INDUSTRIALIZATION TRENDS ANDTHEIR IMPACTS ON HOUSEHOLD WELL-BEING

paper prepared forthe annual meeting of

the Caribbean Studies Association (CSA)Jamaica, May 24-29, 1993

THOMAS KLAKDepartment of Geography, Miami University, Oxford, OH 45056

phone: 513-529-4049; FAX: 513-529-3841email: tcklak@miavxl.acs.muohio.edu

RECENT CARIBBEAN INDUSTRIALIZATION TRENDS ANDTHEIR IMPACTS ON HOUSEHOLD WELL-BEING'

1. INTRODUCTION

This paper seeks to establish a conceptual framework for interpreting the recentrecord of Caribbean countries pursuing the outward-oriented development strategy ofindustrialization through transnational corporate investment. Within a conceptual framework,the paper explores some crucial connections between current industrial policies andproduction trends, the associated labor processes, and their impacts on working classhouseholds.

The countries of interest in this paper include those of the islands of Hispaniola andthe Lesser Antilles, along with Jamaica, Belize, and Trinidad and Tobago. By no coincidencethis list, except for its exclusion of Spanish-speaking Central America, approximates theReagan Administration's regional creation, the Caribbean Basin, which at last count hadexpanded to 24 countries and territories. The policies of core and periphery have convergedaround industry for export from the Caribbean. Through the Caribbean Basin Initiative, theUS has attempted to stimulate industrial investment in and exports from the region. To dothis, the US has given manufacturers locating in Caribbean Basin countries special access toits markets until 1995.2 The EC and Canada have similar policies toward the Caribbean,although they are a distant second and third to the US in terms of regional investment andtrade (Deere et al. 1990). 3 The industrial policies of Caribbean Basin countries themselvescomplement and amplify those of the core countries (Klak & Rulli 1993).

1 An earlier version of this paper was presented at the annual meeting of theAssociation of American Geographers (AAG), Atlanta, April 6-10, 1993. Financialsupport from Miami University's Geography Department, College of Arts & Scienceand Office of International Programs is gratefully acknowledged.

2 This US program, abbreviated CBI, is formally known as the Caribbean BasinEconomic Recovery Act (CBERA). It reduces tariffs on certain non-traditionalagricultural imports from designated Caribbean Basin countries as well. The USinvestment and export-stimulating efforts are best viewed not as associated withindividual laws, but with layers of legislation enacted since the 1970s, some of whichare regionally-specific and others directed broadly at Third World countries (Klak &Rulli 1993). .

3 There has been much recent reporting of a new wave of investing in EPZs in theCaribbean region by industrialists from the East Asian NICs (e.g., Griffith 1990;Dicken 1992), and suggestions that they bring with them highly competitive flexibleapproaches to production (e.g., Goss & Conway 1992). Much more research anddocumentation is needed concerning the scale and longevity of this East Asianinvestment, and its similarities to and differences from the activity of Westernindustrial firms.

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Export manufacturing and tourism, when measured by recent growth in foreignexchange earnings and employment, are the most dynamic economic sectors in theCaribbean. This paper critically examines industrial trends, while others have evaluatedCaribbean tourism in parallel fashion (Belisle 1984; Cox & Embree 1991; Weaver 1991). Asto the numerical significance of industrial exports, by 1988, their per capita US dollar valuefor eight representative Caribbean countries was four times the 1976 level (Klak and Rulli1993). Job growth in Export Processing Zones (EPZs), enclaves established to accommodateforeign-owned industries, was similarly strong. Employment nearly trebled in Jamaica from1975 to 1988-9, while at the same time in the Dominican Republic it grew from 6,500 toover 112,000 (Schoepfle & Perez-L6pez 1992 p142). 4

The following discussion moves systematically through Figure 1. The figure makesconnections between processes related to Caribbean industrialization that, if they have beenstudied at all, are usually studied separately. The text highlights the roles of issues andproblems in the numbered boxes, and relations depicted by the arrows. A quick glance acrossFigure 1 will likely suggest a rather unwieldy set of relations. Upon second glance, however,the figure should also suggest that a basic aim of the paper is to identify connections betweena wide variety of trends, including issues of dependence, debt, investment, class, and gender,all implicated in the development process. The approach here is sweepingly inclusive, to asignificant degree in reaction to the bulk of the literature that has focused on such componentissues as the debt crisis (Girvan & Bernal 1982), US trade policy toward the region(Newfarmer 1986; Schoepfle & Perez-LOpez 1989), industrial-technological change (Goss &Conway 1992), and case studies (Long 1983). As perfectly respectable as the topically-focused work is in addressing those selected issues, each issue is framed and constrained bya larger interconnected and reinforcing system of influences. It is the influence of aninterconnected system that this paper aims to highlight. In the course of exploring thesystemic structure and interconnections of the current industrial development model, itbecomes very apparent where there are significant gaps in empirical documentation. Theframework therefore is most useful in identifying priorities for empirically-based research.

Two related characteristics of the framework - its high level of generality and itsindisputably pessimistic assessment - deserve comment at the outset. First, the discussion oftrends and connections between political, economic and social processes is intentionallypitched at a broad, region-wide level. It is not regionally-scaled as an attempt to develop anall-encompassing explanation, as that would be inappropriate given the variety of country-specific experiences. That said, there are also common constraints, dilemmas, and policies

4 Job growth in Barbados between those two years was similar to that of Jamaica.However, export industrial activity in Barbados actually peaked in 1983 and has sincefallen off dramatically. The timing corresponds with the CBI program and theproliferation of comparable industrial export platforms across the Caribbean payingworkers substantially less than half of earnings in Barbados. As of 1988, averagehourly earnings in Barbados' EPZs were still US$2.10, but since then the Barbadiangovernment, attempting to attract industry, has devalued the currency and therebyreduced the average wage to US$1.83 (Klak Rulli 1993; Hosten-Craig 1992 p107).

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across the Caribbean, owing to homogenizing features such as foreign debt, IMF agreements,trade policies from core countries, EPZ promotion, and regional economic integration policy(CARICOM; Will 1991). In fact, many countries across the Third World face similardevelopment obstacles and challenges that should be appreciated, lest geographically-specificresearch fail to recognize how the global political economy shapes conditions in theperiphery. Failing to appreciate the common threads of development problems and policies inThird World contexts is, in my judgement, worse than over-generalizing (see Corbridge1988), particularly when, as in the present case, the generalizations are to be complementedby more detailed and focused research. The primary intent in the present paper, however, isto establish a broad regional framework 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 examine a problem such asJamaica's performance at "walking a tightrope" between locally-beneficial industrial policiesand those suitable to outside political and economic interests (Richardson 1992 p191). Localworkers seek higher wages but these reduce Jamaica's ability to compete for foreignindustrial investment. Growth in productivity would allow for increases in both wages andprofits, but it is hampered by sweat-shop conditions, reduced state social service provisions,including education and health care, and falling living standards. 5

Second, the assessment of industrial trends is pessimistic because it reflects the vastmajority of the literature that is empirically-based, as opposed to the considerable amountthat is promotional or wishful (e.g., compare Warr 1989 to Tuitt 1991). The discussioninterconnects the various problems identified in the literature related to Caribbeanindustrialization (e.g., indebtedness, educational and industrial investment, wages andemployment). These trends resonate with 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 industrial development, however,things are not equally bad nor hopeless in all places. And, the policies of certain countrieshave cultivated such things as local industrial linkages more than the average. In response tothis variation, future research should extend to incorporate empirically-detailed material aboutCaribbean industrial processes that will complement and modify the framework, and specifyit for particular countries.

2. BRIEF REVIEW OF THE PRE-1980 CONTEXT

This paper focuses on interconnected problems and issues of Caribbean industrialpolicy and development from the 1980s onward. Widespread poverty and development policyconstraints obviously did not emerge in 1980, although that year does mark the start of along recession from which the region is by no means fully recovered (Klak 1992b). Only afew of the more salient antecedent conditions that have led to more recent industrial trends

5 In fact, the Jamaican government reports that productivity per worker, measured inlocal currency, fell by 25% between 1975 and 1989 (LARRC 1990b).

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will be outlined here (Figure 1 "The Pre(1980)Cursors'; but see Thomas 1988; Sunshine1988; Richardson 1992).

Worldwide during the twentieth century, the value of agricultural commoditiesrelative to manufactured goods has fluctuated wildly in the short term and has slowlydeclined over the long term. Agricultural commodity prices peaked in 1973, giving muchhope for progress to their Third World exporters and encouraging overly ambitious statedevelopment programs. Since then, however, the decline in agricultural export value hasbeen precipitous, equal to roughly one-half of their value (New Internationalist 1992 p18),and has forced the Third World countries dependent on them to scramble to make up for thefinancial shortfalls through hastily-conceived policy and foreign borrowing.

The Caribbean's traditional dependency on a few especially vulnerable commodities,primarily sugar, bananas, and bauxite, has meant that it has felt the impact of deterioratingterms of trade on its import/export balance as much as any Third World region (box 1;Schoepfle & Perez-LOpez 1992 p148). Only the smaller Caribbean territories with special,post-colonial access to European markets, primarily for bananas, did not suffer fromfluctuations and decline in traditional agricultural exports during the 1980s (Schoepfle &Perez-LOpez 1992 p148), although new EC regulations reduce these preferences (de Cordoba1993). Agricultural export vulnerability has pushed Caribbean governments toward foreignborrowing and new export generation, leading to negotiations with international bankingrepresentations and to invitations to transnational industry (Barry et al. 1986).

By 1980, foreign debt was already burdenous for the majority of Caribbean countries,although interests rates were still low (Deere et al. 1990 p35). From 1973 through the end ofthe decade, several factors converged to encourage massive borrowing: declining export andrising oil prices, hopes for rapid modernization and industrial development, and theavailability of abundant petro-dollars bearing interest rates near or below inflation. Thewindfall of cheap loan money availed to governments by no means fully capable of, orinterested in, investing the funds in social development meant that much foreign debt havenot translated into real positive impacts on the living standards of the majority (box 2; Golub1991). Many of the irresistible loans of the 1970s bore interest rates that have floated withthe US prime rate. When the US government dramatically increased the prime rate in 1981,Latin America and the Caribbean began its foreign debt crisis (Gilbert 1990 p28; Stallings1987).

The policy tenet that Caribbean governments should lure transnational corporations(TNCs) to invest locally in order to diversify the domestic economy and to expand theindustrial sector dates to Puerto Rico's Operation Bootstrap program from the late 1940s.Caribbean countries have been allured by Puerto Rico's rapid industrial expansion anddiversification, and despite the Commonwealth's unique advantages from its relation to theUS (Sunman 1990), have strived to replicate that experience themselves since the 1960s."Industry by Invitation" (box 3) has involved attracting TNCs to manufacture for exportmarkets. Earlier experiences with ISI (import substitution industrialization) taught Caribbeanpolicy makers that internal markets and natural resource endowments were inadequate forlabor absorption and sustained development, and therefore that successful industrializationmust target foreign markets (Griffith 1991 p219; Codrington and Worrell 1989 p.29).

A fourth contextual factor critical to understanding the 1980s industrialization

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experience is the nature of class relations within the Caribbean region's historical structuraldependency. About two-thirds of the Caribbean's 35 million people trace at least partialancestry to African slaves, while the descendants of non-slaves are concentratedgeographically on the islands of Cuba and Puerto Rico (Richardson 1992). For reasonsrooted in the bitter experience of centuries of slavery that lasted through much of the 19thcentury, Caribbean workers have not accepted capitalist social relations without confrontation(Thoumi 1989). Having won freedom, class conscious ex-slaves and their descendants haveorganized themselves and struggled, in many cases violently, for access to land, betterworking conditions and higher wages (Thomas 1988; Sunshine 1988; Richardson 1992).Caribbean men are given greater emphasis than women in this interpretation because thelatter, participating less in the formal sector, have had less direct experience with capitalistsocial relations (Portes 1985). Women more than men have worked as small scale farmers,as self-employed informal traders and producers, and in the home (Massiah 1989). Thesignificance of primarily male-based working class militancy for the present topic is that ithas left an impression of instability that, along with inadequate skills for modern industry, asdiscussed below, discourages foreign industrial investment (box 15; Newfarmer 1986).Caribbean policy aimed at attracting investors who can choose from among a myriad ofThird World production platforms, including many where workers have been systematicallyrepressed, as in many Asian countries, must therefore offer greater incentives to increaseprofitability. These in turn reduce the Caribbean countries' benefits from the industry,including their returns from public investments in such things as promotion, sitepreparations, and infrastructure. The point is that Caribbean governments must hyper-extendthemselves to lure in TNCs, thereby undercutting the local accrual of industrial benefits.

A fifth contextual item is population growth (box 5). The population growth rate forthe Caribbean has fallen markedly in recent decades but, at 1.8% as of 1992, is stillsignificantly positive (UN 1992). Unlike many discussions of underdevelopment (for a reviewsee Shrestha & Patterson 1990), I do not wish to place emphasis on the causal centrality ofthe "population explosion" (for a critique, see Yapa 1991). However, in countries wheremuch of the existing population is inadequately serviced, increasing numbers mean an evengreater need for decent employment opportunities, food and shelter. In Jamaica, for example,where the unemployment rate rose to 21% by 1988, the population is currently increasing by30,000 per year (Griffith 1991 p218; NTDB 1993). This creates more obstacles to successfulindustrialization, and, more broadly, greater challenges to development policies that wouldmeet social needs.

3. FISCAL & OTHER CRISES OF THE 1980S

The discussion now moves to the crisis conditions since the 1980s. In this period,Caribbean governments have given considerable influence over policy to the IMF and otherinternational development agencies in return for financial aid to assuage mounting economicproblems (see Figure 1, "The 1980s Crisis"). Despite the policy efforts to diversifyCaribbean economies and to attract jobs in the last two decades, the region as of the late1980s was almost universally characterized by substantially higher unemployment than in1970 (box 6; Griffith 1991). Current structural problems reflect and amplify those associated

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with the natural environment. Going back as far as the 1500s, climatological and human-induced natural disasters have undermined the fragile plantation economies of the Caribbean.Even in Cuba, 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 modern technologicalinputs cannot match the output when the colonial era commenced. Besides declining fertility,the region as a whole may be experiencing more serious and frequent droughts in recentdecades (box 7). The greater frequency would be in part attributable to the loss of anincreasing share of the natural moisture-retaining flora to additional agricultural export andsubsistence production (Richardson 1992). A greater frequency of weather-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 unquestionablyamplified the region's trade imbalance and revenue shortfalls in recent years, and havetherefore required additional foreign loan taking. In the 1980s, the US has cut sugar importquotas for the Caribbean, which in itself would be enough to increase economic 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 more diverse but with greater trade imbalancesand foreign debt (Newfarmer 1986; LARRC 1988a; Deere et al. 1990). An array of relatedfactors, from poor agricultural yields and prices, to wasted windfall loans and politicalthinking that seeks industrial exports through TNC investment, have also led to governmentalinsolvency by the 1980s (box 8). And while much has been written attempting to identify thecausal roots of the combination of financial problems in Latin America and the Caribbean(box 8; Golub 1991), for our purposes these problems primarily establish the context fromwhich Caribbean countries have aggressively sought TNC 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 World Bank, the Interamerican Development Bank (IDB), and USAID, and toseek debt rescheduling, additional loans, and the IMF's 'blessing' (box 9A; McBain 1990;Killick & Malik 1992; LARRC 1992d).

4. PROGRAMS OF POLITICAL-ECONOMIC RESTRUCTURING

The international development agencies offer temporary debt relief in exchange formajor reorganization of government roles and policies, changes that require subsequentmacro-economic verification for additional aid. Since the 1970s, "structural adjustment" hasinvolved three standard policy changes that are aimed to downsize government, to open thedomestic economy further to international trade and investment, and to reduce the value ofthe local currency (boxes 9B-9D). In the 1980s, the IMF and kindred agencies added a fourthpolicy component. Countries are now to invite TNC industrial investment by preparingextraterritorial sites outside local regulations (EPZs), offering 10-15 year tax holidays, andallowing unrestricted repatriation of profits (box 9E; Deere et al. 1990). EPZs are intendedto generate much needed low skill employment and incorporate the country into the

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international division of labor for modern industries. Note that international agency-prescribed EPZ policy dovetails with longer-term regional efforts to attract industrial TNCs,thereby yielding a hegemonic development model.

Repercussions of governmental downsizing and EPZ promotion are numerous andrequire the substantial space devoted to them below. Economic opening, at a general levelinvolving reduced trade barriers, is a curious contemporary policy given that the Caribbeanhistorically has been extremely trade dependent (Deere et al. 1990). Trade dependency iscaptured in the historical adage that 'the Caribbean produces what doesn't consume andconsumes what it doesn't produce' (Richardson 1992). Given the region's long-termvulnerability to booms and busts in the global political economy, it would appear, in theabstract at least, that one thing the region does not need more of is greater economicexposure.

The related issue of currency devaluation, intended to reduce demand for imports andtherefore improve the trade balance, by definition increases the price of imported goods, andso immediately increases consumer costs. In fact, a broadly-inclusive study of the impacts ofIMF-stipulated restructuring agreements across 17 Third World countries, includingDominica, the Dominican Republic and Jamaica, revealed that one of the most consistenteffects is higher consumer prices and lower living standards, concentrated among the poor(Killick & Malik 1992; similarly see Pastor 1987). For heavily trade dependent regions suchas the Caribbean, currency devaluation translates most directly and proportionately intohigher consumer costs and greater impoverishment (boxes 10 & 17). The impact is long-termgiven the difficulty of reorienting consumption toward locally produced goods following fivecenturies of reliance on imports, and considering the pervasive cultural influences of USconsumerism (Sunshine 1988; Richardson 1992).

The impacts of government spending cuts are more complicated. This owes in part tothe fact that the distribution of the cuts derives from a local political economic context that isnot adequately incorporated into the IMF and kindred policies. In fact, policy prescriptionsfrom the international development agencies are notably generic across country contexts(Killick & Malik 1992). There is considerable sentiment in the development community,publicly articulated by the likes of Harvard Economist Jeffrey Sachs, that restructuringpolicies can and should be generic, and applied from contexts as diverse as Chile, Morocco,Kenya, Jamaica and even Russia (Cohen 1992; 1993). To encourage universal application ofdevelopment policy, USAID, for example, intentionally rotates development officers amongits regional offices lest they become unduly attached to (and appreciative of) place, peopleand cultural context (Klak 1992a).

To the extent that international development agency prescriptions for governmentdownsizing do target more wasteful bureaucratic elements while encouraging efficientexpansion of others, the actual implementation of those policy changes is left to nationalactors. The IMF's operational policy specifically restricts direct manipulation of the internalaffairs of a country (Deere et al 1990 p.39 cf). The IMF is well known to soften or hardenthe financial requirements it stipulates to a country depending on whether that country is inor out of favor of a major donor country such as the US (Killick & Malik 1992). The IMFthereby has indirect impacts on national politics, yet it cannot directly manipulate internalgovernment policy. One may delight in this brake on imperialist adventures. However, such

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restrictions also mean that entrenched comprador and other privileged segments of a ThirdWorld country's political economy control the implementation of the austerity policies andwill continue to protect their own interests during downsizing (Cardoso and Faletto 1979;Miller 1992). The impacts of such an arrangement is illustrated by Jamaican housing policy.There is less funding of basic shelter assistance while powerful bureaucracies remain largelyintact, although they contribute even less than before to meeting the progressive social needsfor which they were ostensibly created (box 12A; Kiak 1992a; 1993).

No matter what the internal politics of state social service provisions may be inindividual Caribbean countries, however, austerity programs are very likely to reduce thefunding, quantity, and quality of social services. As the president of the CaribbeanDevelopment Bank recently described it, the experience of structural adjustment to Caribbeanpeople has meant

long queues for the purchase of staple food, including even those we produceourselves; health services that have run out of essential medicines and otherbasic items; schools, especially those serving the rural poor, that sometimeshave teachers but no teaching supplies; families unable to send their childrento school because they can afford neither lunch nor bus fares... (LARRC1992c).

The negative impact on education is particularly relevant. For example, in the decade from1976-77 to 1986-87, during which time Jamaica reached five agreements with the IMF, theMinistry of Education's expenditures fell quite consistently. The real value of educationalspending declined by 34% as of the latter date, while matriculation of certified teachers felleven more precipitously (Miller 1992). Educational expenditures in the Dominican Republic(World Bank 1992 p238) and the region in general (Deere et al. 1990 p11) have moved inthe same direction. Drastic educational cuts do not cultivate a skilled work force that couldfoster competitive local industries, attract more technologically sophisticated outsideindustrial investment, or develop local linkages to TNCs such as computer servicing (box12B; Lowenstein 1985).

Prescribed government budget cuts are not restricted to social services, but rather areaimed at reducing the overall role of the state, and have been at a sufficient aggregate scaleas to require spending reductions across ministry portfolios. Drawing on the East Asianhistorical experiences, public investment in both education and industry is necessary (but notsufficient) for internationally competitive domestic industrial firms. In the contemporaryideological and financial climate, it would be difficult for governments to invest and fostergrowth in domestic industry in a way that looks anything like the record of the East AsianNICs (box 11A; Gereffi & Wyman 1990). Illustrating the problem is the fact that only two(Trinidad & Tobago and Guyana) of the twelve countries in the English-speaking Caribbeanemployed any scientists and engineers in R&D in 1987, while patent development wascomparably limited in recent years (box 11B; Griffith 1991). Even in Barbados, which wasprecocious in Caribbean export-assembly policy, firms inquiring about EPZs in the mid-1980s found no available electrical engineers (Lowenstein 1985). The region's lack of skilledbusiness managers has meant that it has had, as the director of the Caribbean TourismOrganization recently put it, "to import a great deal of people who manage the major aspectsof [its] economy" (LARRC 1992a p1).

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A context in which Caribbean governments are downsizing, privatizing, and reducingthe protection of local firms and markets is ripe for increased market penetration by TNCs,as has occurred under similar circumstances in many parts of the Third World (Gwynne1990; Griffith 1990). Hard empirical evidence to assess the performance of Caribbeandomestic industries during restructuring is particularly lacking, however. Overwhelmingly,research has focused on external industrial policies and investment (e.g., Newfarmer 1986;Schoepfle and Perez-L6pez 1989). One study of a successful Jamaican industry servicingprimary product export sectors suggests that extra-regional firms control the internationally-competitive technology, and Caribbean companies can gain access to it only in its waningyears (Girvan & Marcelle 1990). In the interim prior to more empirical research on thequestion of the relative competitiveness of Caribbean firms, trends suggest that restructuringhas made the region itself less industrially competitive, and thereby has further dampened theprospects for an economic growth that is internally-based rather than enclave-restricted(boxes 11C & 11D).

Export Processing Zones have proliferated across the Caribbean since the 1970s.Virtually every country now competes for the same offshore TNC investment in productassembly operations. Government development agencies are devoted to activities such asadvertising their EPZ packages, entertaining prospective investors, and preparing industrialsites. As a rule, operations attracted to EPZs are under competitive pressures and seek a lowcost environment in which to assemble standardized products with high labor demands suchas clothing and electronic components (box 13A). Thus it is important to note that TNCs areinvesting in the Caribbean to minimize production costs, which is contrary to thedevelopment interests of the host country. Jobs given to locals in the EPZs are almostentirely low to semi-skilled (Long 1983; Deere et al. 1990). The pay levels across the regionare generally about twice the local poverty-level minimum wage, or $.58-1.83 per hourincluding fringe benefits as of 1991 (box 13A; Hosten-Craig 1992 p107).

Caribbean governments are investing substantial resources in EPZs, but we have littlesense of the scale of costs incurred. EPZ promotion is a hegemonic development project,inasmuch political elite from both core and periphery consensually vocalize their support of it(Jessop 1982). In such an arrangement it is predictable that calculations of the true direct andindirect social costs would not be included in the discourse. Despite the paucity of data,however, it is not difficult to imagine some of the impacts of these costs. Given thatgovernment budgets have been reduced overall, whatever the not insignificant costs are, theyreduce the funding available for social services (box 12A). Even more importantly, althoughlike social costs, rarely entertained, wholesale orientation toward a development modelemphasizing EPZs and other non-traditional export sectors closes off options for alternativeuses of limited funds, resources, and people power. As Figure 1 suggests, Caribbean policieshave become entrenched along the path established by the conventional wisdom aboutdevelopment, while simultaneously, alternative approaches become more distant and elusive(Yapa 1991; New Internationalist 1992).

The Caribbean has wholeheartedly sought a subordinant role in the new internationaldivision of labor for modern industries, but outside investors have been unenthusiastic aboutand restrained in incorporating the region. As noted in the introduction, EPZ policies, inconcert with recent import policies from the US, the EC, and Canada that increase the

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profitability of Caribbean assembly operations for TNCs, have dramatically increasedindustrial employment in and exports from the region. However, Caribbean industrial growthand significance is less impressive when one considers the region's geographical accessibilityto the US market. Recent job growth from US manufacturing investment in far more distantThird World countries, such as Malaysia, the Philippines, and Indonesia, has been moreimpressive than in the Caribbean (Dicken 1992 pp66-7). Caribbean EPZ growth is also lessimpressive when gauged against macro-indicators for each country, such as the size of thework force and economy as a whole, and, as noted earlier, the increasing unemploymentrates. As of 1988-9, EPZ employees as a share of the work force ranged from 2% inJamaica and Dominica, to 6% in the Dominican Republic and St. Vincent, and 8% inBarbados (box 13A; Schoepfle & Përez-LOpez 1992 p142).

Considering the policy incentives from both the core and the Caribbean thatencourage TNC industrial investment, in addition to the competitive pressures on firms to cutlabor costs and the region's accessibility to the huge US market, it would seem that weshould be asking why there are not more TNC assembly operations in the Caribbean. Theanswer seems largely related to negative perceptions of the Caribbean's working class. Asalluded to earlier, the region has a history of working class rebelliousness (arrow 4-13A).Working class males have been relatively organized, particularly in primary sector industriessuch as export agriculture, bauxite and petroleum, depending on the country.' Strikes andurban riots have frequently responding to economic downturns, unemployment and higherconsumer prices (Sunshine 1988; Richardson 1992). The effect of these working classmovements on the perceptions of outside investors is the oft repeated comment that theCaribbean is a relatively unstable investment environment (e.g., Newfarmer 1986; Preeg1992). Pro-business policy incentives from Caribbean governments run against, but do notovercome, this perception, which is tied more to workers than politicians, although investorsoften considered them uncooperative as well (Girvan & Bernal 1982). Another commonnegative perception of the region, historically rooted in environmental determinism (Peet1985) and also likely to influence the investor's view, is that Caribbean workers are lazy andunproductive, and lack punctuality (Lowenstein 1985; Richardson 1992). This view is notincompatible with the perception of instability; they combine to create an impression of acontext in which workers demand much while delivering little.

These elements of regional unattractiveness as a production site apply more to malesthan to females. For a variety of reasons, including negative perceptions of the male workingclass and women's relentless responsibility for household provisions (Klak & Hey 1992),TNCs largely avoid men and hire women in Caribbean EPZs. In fact, women hold themajority of jobs in EPZs worldwide (Dicken 1992 p187). This is because, compared to men,they are said to be more docile and dexterous (Brydon & Chant 1989). However, in

6 Females have not been passive in Caribbean industry. For example, women's groupsjoined trade unions in an unsuccessful fight against establishing EPZs in Trinidad in1988, citing exploitation and adverse work conditions in zones elsewhere as reasons tooppose them (LARRC 1988b; for a longer term perspective on female garmentworkers in Trinidad & Tobago, see Reddock 1990).

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Jamaican EPZs, women fill 95% of the jobs, more than in any Asian country or Mexico(Dicken 1992 p187). Women comprise over 90% of the EPZ work forces in otherCommonwealth Caribbean countries as well (Schoepfle & Perez-L6pez 1992 p144; Goss &Knudsen 1991). The virtual universal hiring of Caribbean females cannot be explained by alack of available male workers, given the high unemployment rates, or by women's priorindustrial experience. Jamaican women, for example, comprise one of the smallest shares ofnon-EPZ industrial workers in the Third World (Dicken 1992 p187). Instead, foreignindustries prefer Caribbean women over men because the former are less organized and canbe paid less (Safa 1990).

These structural adjustment-related trends have produced a painful example ofwomen's increasing double burden (Brydon & Chant 1989). Women in Caribbean urbanareas are drawn into the formal sector production at same time that state contributions towork force reproduction in forms such as urban services, shelter assistance and educationalopportunities are reduced. As Trinidad and Tobago's Prime Minister A N R Robinsonexplained while implementing 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 (LARRC 1989). As a result, women have more production andreproduction responsibilities, requiring more hours of work, at the same time that the cost ofliving is rising (box 10). As has been empirically detailed for Guayaquil, Ecuador (Moser1989), women 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. However, industrial workers,especially those paid low wages in high cost of living environments by profitable TNCs, willinevitably begin to apply pressure for greater remuneration and more benefits. EPZ taxholidays also eventually expire, and then contribute to the incentives for TNCs to relocate tolower cost environments (boxes 14A & 14B). Tendencies toward increased taxes and wages,which would increase the share of total value produced that accrues locally, reduces thelocation's attractiveness to the TNC. In several cases Caribbean governments, fearing oreven being threatened by the loss of an assembly plant if taxes are charged, have extendedtax holidays several more years. EPZ workers have often pursued higher wages byattempting to organize themselves, but TNCs have been intolerant of unions (Deere et al.1990; LARRC 1991c).

A final notable issue that does not bode well for Caribbean industrial expansion is thetendency for technological innovations in production processes to reduce the demand for lowcost, offshore sites featuring low-skill assembly of standardized products (box 16). Thegeography of manufacturing and technological change involving the Caribbean has yet to be

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

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uncovered and written, but the scattered evidence presently available suggests thattechnological innovations cause industrialists to repatriate assembly operations to coreregions. The current evidence suggesting that manufacturers' interests in Caribbean sites islimited in scale and temporary in scope is based on (1) the evolution of regimes ofaccumulation, and more specifically, the current transition from a predominance of Fordistfirms to more flexible, core-located production systems (Lipietz 1986; Storper 1991); (2) theboom and bust temporal trajectory of industrial exports per Caribbean country, suggestingthat Caribbean sites undergo rapid changes of status within industrial location logic and thatfirms respond to those changes by being particularly footloose (Klak & Rulli 1993); (3)extremely short product life cycles in electronics (especially semiconductors), thus far aprincipal sector in the EPZs (Dicken 1992; Goss & Knudsen 1991), and suggestingcorrespondingly limited interest in Caribbean assembly sites; (4) emerging computer-basedinnovations in clothing production, which traditionally has been exceptionally labor intensiveand therefore attracted to offshore assembly, now beckon it back to high-skill, capital-intensive core locations (Dicken 1992); and (5) new US trade policies toward Latin Americaand the Caribbean must also be considered. These include NAFTA and the elimination ofPuerto Rico's principal industrial advantage, 936, which, even in the discussion stage, arealready reducing investment in the Caribbean (Hosten-Craig 1992; LARRC 1992b; 1992e;Hernandez Colon 1993). When implemented the policies are likely to diminish substantiallythe relative profitability of investment, and therefore TNC interest, in Caribbean countries.Although neither of these conceptual, technological, and policy trends is indisputablypredictable to have a huge negative impact on the Caribbean, together they cast a darkshadow over the future of the region's industrialization programs. Others have evaluatedsimilar trends as those presented above and remain hopeful about future Caribbean industrialexpansion (Goss & Knudsen 1991; Goss & Conway 1992), but current empirically-basedevidence does not lead to that conclusion.

5. CONCLUDING COMMENTS

The essence of Figure 1 is that overall, Caribbean working people, particularlywomen, have greater production and reproduction responsibilities and thus, when they canfind formal employment, are working harder in low wage and temporary jobs, whileCaribbean economies continue to deteriorate around them. The interconnected trends in thefigure eventually lead to the same conclusion: more poverty and lower living standards forthe Caribbean working class (box 17). These trends are corroborated by statistics compiledfor Latin America and the Caribbean as whole for the period 1985 to 1992. Real GDP is up15% as a result of TNC industrial production and other export diversification, but externaldebt has risen more swiftly than that (almost 19%). At the same time, the real minimumwage has fallen two-thirds in value (NACLA 1993, p17).'

8 In the cited study, the fall in real wages is measured for the mainland countries of theregion, but is likely to be similar for Caribbean countries (e.g., Deere et al. 1990p56).

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The numerous trends all contributing to greater poverty and lower living standards(box 17) suggest the operation of what Sayer (1984 p100) has termed "an over-determinedsystem of causality:" "A situation is overdetermined when two or more mechanisms eachsimultaneously produce the same effect" (Klak 1992 p106). Within such a system, minortinkering with policy levers, such as funding job training programs, for example, will havelittle impact on the impoverishment. To the contrary, causal overdetermination creates asituation whereby the effects of change in a variable within the system may be opposite towhat the effect would be at a bi-variate level. As Sayer (1984 p100) puts it, "counteractingforces can override and conceal the effects of the operation of a particular mechanism." So,for example, cutting ties with the IMF or with TNCs interested in industrial export platformsis likely to increase poverty rather than decrease it. At a superficial level, the likely greaterpoverty brought about by severing ties with the international interests suggests, as Caribbeanpolicy makers often say, that "there is no other way" (LARRC 1991b). This is true so longas the game is played within the interlocking structure of dependency outlined in Figure 1.

Hopefully Caribbean industrialization efforts aren't universally as gloomy at the levelof empirical details. As I have endeavored to note, hard evidence is thus far lacking formany of the crucial issues. This exercise will help to draw attention to any distinctive trendsin particular country contexts that suggest that there is cause for greater hope. It is alsopossible that economic sectors other than industry, such as tourism and non-traditionalagricultural exports, hold more promise. This is by no means assured, however, given thatthese sectors to a large extent operate within and are constrained by the same structuralconditions outlined (e.g., foreign debt, trade imbalance, lack of local capital, weak skilldevelopment, negatively affected by NAFTA, etc.). Caribbean tourism has a large foreignownership component and thus exports the majority of its profits. It is also particularlyvulnerable to exogenous vicissitudes, be they economic (e.g., recession in the core) orpolitical (e.g., US tourists' fear of flying during and after the Persian Gulf War; LARRC1991a).

Literature Cited

Barry, Tom, Beth Wood and Deb Preusch 1986 The Other Side of Paradise: Foreign Controlin the Caribbean. Grove Press.

Belisle, F. 1984 "Tourism and food imports: The case of Jamaica." Economic Developmentand Cultural Change. Vol. 32, pp819-42.

Brydon, Lynne and Sylvia Chant. 1989. Women in the Third World: Gender Issues in Ruraland Urban Areas. New Brunswick: Rutgers University Press.

Cardoso, F. and E. Faletto. 1979. Dependency and Development in Latin America. Berkeley:University of California Press.

Codrington, Harold and DeLisle Worrel 1989. "Trade and Economic Growth in SmallDeveloping Economies: Research on the Caribbean." Economic Adjustment Policiesfor Small Nations: Theory and Experience in the English-Speaking Caribbean. PraegerPublishing, NY. pp.28-47.

Cohen, Stephen F. 1993 "American policy and Russia's future" The Nation Vol. 256, No.14, pp476-85.

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