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Steady growth provides major source of new jobs
A new report 1 published by the ILO says that as global competition for jobs and foreign investment intensifies, Export Processing Zones (EPZs) are proliferating worldwide, growing from just a handful a few decades ago to over 850 today. While acknowledging the huge economic and employment potential of EPZs, the ILO warns that their rise to ubiquity on the global manufacturing scene poses increasingly serious questions for the world's 27 million strong EPZ workforce.
The report defines EPZs as "industrial zones with special incentives to attract foreign investment, in which imported materials undergo some degree of processing before being exported again." In some countries, EPZs are indistinguishable from organized, modern business complexes. But in many others they take the form of ring-fenced enclaves of industrial monoculture. No matter what form EPZs take, the free trade, foreign-investment and export-driven ethos of the modern economy has transformed them into "vehicles of globalization."
The ILO analysis says that while EPZs are undoubtedly huge employment generators - particularly for women in developing countries - too many are still hampered by a reputation for low wages, poor working conditions and underdeveloped labour-relations systems. In addition, the ILO says while the combination of direct manufacturing investment, employment and technology transfer can provide an important boost up the development ladder, the evidence thus far points to pervasive absence of meaningful linkages between the EPZs and the domestic economies of most of the host countries.
While many zone-operating countries had anticipated that the low-skilled processing and assembling of imported parts would be a necessary, but temporary first step up the ladder toward higher value-added manufacturing, only a few (for example Malaysia, Mauritius and Singapore) have actually managed to develop domestic export industries on the basis of EPZ investment.
Distribution of EPZs by region, 1997
| Region |
|
|
| North America
Central America Caribbean South America Europe Middle East Asia Africa Pacific Total |
41 51 41 81 39 225 47 2 847 |
United States - 213, Mexico - 107
Honduras - 15, Costa Rica - 9 Dominican Republic - 35 Colombia - 11, Brazil - 8 Bulgaria - 8, Slovenia - 8 Turkey - 11, Jordan - 7 China - 124, Philippines - 35, Indonesia - 26 Kenya - 14, Egypt - 6 Australia - 1, Fiji - 1 |
Source: WEPZA and ILO.
The ILO report says that the largest numbers of zones are in North America (320) and Asia (225). But the concentration of EPZs is rising in developing regions such as the Caribbean (51), Central America (41) and the Middle East (39), and the figures are likely to increase throughout the world. The Philippines, for example, currently has 35 EPZs operating but has approved plans for 83.
Currently, the United States and Mexico together are the most active EPZ operators, with respectively 213 and 107; most of the latter are maquiladora assembly plants clustered around border cities such as Tijuana, Ciudad Juarez and Matamores. Maquila plants in these cities are linked to production chains on the US side of the border. Originally established in 1965 as an emergency measure to combat unemployment, the maquila industry today produces exports worth US$ 5 billion annually, more than 30 per cent of total exports from Mexico. Manufacturing investment in the maquila sector is expected to grow in the aftermath of the elimination of tariffs resulting from the North American Free Trade Agreement, particularly in such areas as television and auto parts, clothing and textiles.
Other countries in the Western hemisphere are increasingly home to EPZs established largely to provide manufactured goods for sale in the US market: the Dominican Republic has 35 EPZs, Honduras 15 and Costa Rica 9. The report cites Costa Rica as a case in point for how smaller, less populous countries can profit from zone strategies. Since 1981, EPZs in Costa Rica have created almost 49,000 jobs, mostly in the garment and electronics sector, which have the added benefit of diversifying the country's exports away from traditional sectors such as bananas and coffee. Nearly 30 per cent of all the manufacturing employment in Costa Rica is now generated by enterprises operating in EPZs. The country's unemployment level is down to 5 per cent.
In Asia, China alone has 124 EPZs, many on the scale of full-sized urban and industrial developments, complete with community infrastructure such as education, transport and social services. Bangladesh, Pakistan and Sri Lanka have extensive EPZ strategies. In Africa there are 47 EPZs, 14 of which are in Kenya. In Mauritius, the entire territory has been zoned for export processing and the judicious management of EPZs is probably the major contributing factor to that country's economic growth.
Growth in the "Asian Tiger" economies was also fuelled by EPZs. For three decades, the state of Penang in Malaysia proved highly effective in attracting quality investment in hi-tech manufacturing, with the number of plants increasing from 31 in 1970 to 743 in 1997, and the number of employees rising from around 3,000 to nearly 200,000 during the same period. Similarly, much of the growth in technological and financial prowess in Singapore developed on the basis of investments and steady productivity increases in EPZs, which succeeded both in raising the quantity and quality of jobs offered and in building the necessary linkages between the domestic and international economies.
The report says that "it is a regrettable feature of many zones that both male and female workers are trapped in low-wage, low-skill jobs. They are viewed as replaceable and their concerns do not receive sufficient attention in labour and social relations." The work force in EPZs worldwide is usually female in majority, and in certain activities, notably textiles, garment manufacturing and electronics assembly, women can account for 90 per cent or more of the workers.
The ILO report identifies five factors which contribute to this unsatisfactory state of affairs:
According to the ILO, the shortage of appropriate human resource development strategies may well limit the potential for EPZs to improve productivity and upgrade jobs. The report says that "labour relations and human resource development remain two of the most problematic aspects of zone functioning". Mechanisms for improving labour standards are often inadequate: "The classic model of labour regulation - with a 'floor' or framework of minimum labour standards, and free trade unions and employers coming together to negotiate binding agreements - is extremely rare in EPZs."
Says Mr. Auret Van Heerden, the main author of the report: "The frequent absence of minimal standards and poor labour-management relations have predictable outcomes, such as high labour turnover, absenteeism, stress and fatigue, low rates of productivity, excessive wastage of materials and labour unrest which are still too common in EPZs."
ILO meeting calls for improved social
and labour conditions in Export Processing Zones
and an end to restrictions on trade union rights
A recent international meeting on EPZs urged that restrictions on trade union rights in some EPZ-operating countries be ended, saying the absence of workers' organization representation, effective structures for labour-management relations and the shortage of human resource development programmes in some countries could stall the upgrading of skills, working conditions and productivity of workers.
The International Tripartite Meeting of Export Processing Zone-Operating Countries was held at ILO headquarters in Geneva from 28 September to 2 October. Delegations representing employers, workers and governments of 10 countries 2 participated.
Delegates also called for compliance with national labour legislation and respect for international labour standards by governments, employers' and workers' organizations in EPZs. In particular, they urged that special attention be paid to the situation of women workers, who account for up to 90% of the EPZ workforce, often performing low-skilled, low-paid jobs.
The delegates, representing employers, workers and governments of 10 EPZ-operating countries, acknowledged that the zones have become major features of the labour market in developing countries. A report prepared for the meeting said that EPZs had increased from a handful just a few decades ago to over 850 today. The report also noted that for increasing numbers of developing countries, EPZs are a vital entry point into the global manufacturing economy, providing a valuable source of investment, employment and technological know-how, but with widely mixed results.
The delegates concluded that while EPZs have generated considerable amounts of investment and have been one of the important engines of industrialization, their overall economic benefits have been limited by "the absence of sufficient linkages in the local economy". The report noted that in many countries, local content in manufacturing is at inadequately low levels.
"For EPZs to fully achieve their economic and social potential, governments should have a clear and comprehensive industrial and investment strategy, consistent with the need to promote economic development and respect for fundamental workers' rights," conclusions of the meeting stated, adding that EPZ strategies should be reviewed periodically and "industrial support services should be made available to local providers of goods and services to assist them in meeting the speed, cost, quality and scale requirements of zone enterprises".
In addition, the delegates agreed that "while EPZs have been a major source of employment creation, in particular for women, labour relations and human resource development remain two of the most neglected areas". The delegates said sound labour-management relations are essential to the success of EPZs and affirmed that "free, strong and representative workers' organizations have a major role to play in building workplace relations conducive to improvements in working conditions and increases in productivity and competitiveness". They said that "governments should promote tripartite consultations as an effective means of developing sound labour relations policies and practices in EPZs".
The delegates concluded that "human resource development is one of the key elements in improving the social and labour conditions in EPZs". The delegates highlighted the need to ensure that EPZ employment "promotes women's advancement and that women are not confined to low-skilled, low paid and low-prospect jobs, and that they have access to training opportunities and better jobs".
The delegates said that in view of the high proportion of women workers, EPZ enterprises should make special efforts to ensure that women workers are not discriminated against in terms of salary or access to promotions. They urged that women workers should enjoy maternity protection and be provided with paid and unpaid maternity leave, employment security during pregnancy and maternity leave, and nursing breaks and facilities. They also highlighted the need for measures to help EPZ workers to combine work and family responsibilities, such as the limitation of excessive working hours and night work, and the provision of child-care facilities. In addition, policies and procedures should be in place to prevent sexual harassment and deal with it.
The delegates called upon the ILO to provide all possible assistance to EPZ-operating countries especially those which have difficulty in fully respecting the principles reaffirmed in the ILO Declaration on Fundamental Principles.
1 Labour and social issues relating to export processing zones. ILO, Geneva, 1998. ISBN 92-2-111357-4. Price: 15 Swiss francs.
2 Bangladesh, Barbados, China, Costa Rica, Dominican Republic, Mauritius, Mexico, Philippines, Sri Lanka, Tunisia.
ILO, Pakistan sign agreement to end child
labour in Pakistan's carpet industry
The International Labour Organization (ILO) and the Pakistan Carpet Manufacturers and Exporters Association (PCMEA) reached an agreement which would remove all child labourers under the age of 14 from work in the carpet industry - Pakistan's largest cottage industry - and prevent other children in that age group from doing such work. The agreement was signed in Islamabad on Thursday, 22 October 1998, by representatives of the PCMEA and ILO-Deputy Director-General, Mr. K. Tapiola.
Implementation of the agreement will start in December 1998 within the framework of the International Programme on the Elimination of Child Labour (IPEC), which has been active in Pakistan since 1994.
In 1996-97 Pakistan exported about 3 million square metres of carpet valued at about 7.5 billion Pak Rs. (US$ 1.4 million) In the rural areas, particularly in Punjab, families have been weaving carpets for generations. Children - particularly girls - and adults who lack opportunities for work outside the home often spend long hours working at the looms.
The goal of this project is to eliminate child labour among children under the age of 14 in the production of carpets in Pakistan by gradually phasing them out of the workplace and providing them with educational opportunities and other options. Initially, the project will target at least 8,000 children working in the carpet industry, including some 2,000 of their younger siblings and their families.
The project has two main components: workplace monitoring and prevention of child labour on the one hand, and the provision of social protection to the children concerned and their families, on the other.
Workplace monitoring and prevention entails, among other things, random and unannounced visits to work sites by external monitors to identify child labour and withdraw children from work, and to ensure that the workplaces, outside and within homes, remain free of child labour.
The social protection component aims at preventing child labour as well as providing rehabilitation for those withdrawn from carpet production. It will provide former child labourers and their younger siblings with non-formal education, counselling and other services. Adult family members, particularly women, will be provided training in income-generation skills.
The project will build on the existing experience of ILO's IPEC programmes in targeting child labour in the rural carpet weaving communities in Pakistan and the successful strategies which IPEC has applied elsewhere. These include a project to phase out child labour from the soccer ball industry in the Sialkot district of Pakistan and the prevention and elimination of child labour in the garment factories in Bangladesh.
The US Department of Labor and the PCMEA will contribute funds for the project for a period of three years. The project will involve the active participation of nongovernmental organizations (NGOs).
ILO Report
3 on sex sector receives prestigious
publishing prize at Frankfurt Book Fair
The Sex Sector: The economic and social bases of prostitution in Southeast Asia has been awarded a prestigious publishing prize, the 1998 International Nike Award. Ms. Lin Lean Lim of the International Labour Office (ILO), who authored the recently published study on the sex industry in southeast Asia, accepted the award on Saturday, 10 October at the Frankfurt Book Fair in Germany.
The prize was launched in 1997 by feminist writer Shere Hite, at the Frankfurt Book Fair, to honour nonfiction writing by women which contributes to the advancement of thinking about the situation of women in the world. The ILO publication was chosen by a jury including women from five continents, all of whom are renowned for their writings and activism.
The ILO study, which was featured in the World of Work No. 26, examines the social and economic forces driving the growth of the sex industry in four southeast Asian countries: Indonesia, Malaysia, the Philippines and Thailand. It says that the provision of sexual services has assumed the dimensions of a full-scale commercial sector, one that provides direct and indirect employment to millions of workers and contributes substantially to national incomes throughout the region.
Ms. Lim, an ILO researcher and employment policy expert, thanked the jury on behalf of the ILO for its decision, and said that she hoped "the award would focus attention on the many misunderstandings and the huge public policy void surrounding the sex sector, as well as on the plight of its many innocent victims, including trafficked women and children".
She said that "the growing scale of prostitution raises alarming questions, not only about public health, morality and gender discrimination, but about the basic human rights of the ever-increasing numbers of commercial sex workers, most of whom would appear to enter the business willingly, but many of whom are forced, trafficked, tricked or exploited into sex work". She said that migrant women were a particularly vulnerable group and evidence abounds of "ruthlessly efficient international networks directing trafficking of migrant prostitutes throughout Asia and beyond".
Lin Lim added that while the conditions of adult sex workers differ greatly, ranging from freely chosen and highly remunerative to exploitation and virtual slavery, "there is no such ambiguity concerning child prostitution," which she said should be considered as a much more serious problem than adult prostitution.
"Adults can choose to become prostitutes or to work in pornography. Children cannot. Children are much more vulnerable and helpless against the established structures and vested interests of the sex sector and much more likely to be victims of debt bondage, trafficking, physical violence or torture. They are much more susceptible to diseases, including HIV/AIDS and suffer lifelong physical and psychological trauma. While there is a range of possible options for coping with the increase in adult prostitution, there should be only one goal for child prostitution - to eliminate it."
The report estimates that anywhere between 0.25 per cent and 1.5 per cent of the total female population in the study countries are engaged in prostitution. Related activities (including the numerous bars, hotels, entertainment facilities and tourist agencies which thrive on prostitution), employ literally millions more workers. Large segments of the population in Southeast Asia - notably the rural-poor families who often send their daughters to work as prostitutes - rely upon remittances from prostitution for their well-being, if not for their outright survival. However, in spite of the size and economic importance of prostitution, it is almost entirely unregulated and goes unrecognized in official statistics, development plans and government budgets of almost all countries worldwide.
The report emphasizes the economic bases of prostitution, highlighting the strong economic incentives which drive women to enter the sector, despite the social stigma and danger attached to the work. Sex work is often better paid than most of the options available to young, often uneducated women. The report also highlights the many vested economic interests which derive profit from these activities rather than the women and children who are the ones commercially and sexually exploited. The report stresses that in order to come to terms with the problems of prostitution, it is necessary to tackle these various vested interests. These include a wide range of social actors, including the families of the women and children who depend on the revenues generated by prostitution and who sometimes sell their children into prostitution, the various sex establishments which include large swathes of the entertainment and travel and tourism industries, and corrupt officials without whom international trafficking networks could not operate with impunity.
The report argues that the growth of prostitution is probably linked, albeit inadvertently, to the macroeconomic policies of governments which have a tendency to spawn rapid urbanization at the expense of rural development, to promote cheap labour for industrialization, to facilitate the export of female labour for overseas employment and to promote tourism as a foreign exchange earner. All these features of modern, export-oriented economies, combined with the pervasive lack of social safety nets and deep-rooted gender discrimination against females, probably contribute to the growth of the sex sector.
The report says that "measures targeting the sex sector have to consider moral, religious, health, human rights and criminal issues in addressing a phenomenon that is mainly economic in nature". However, the report states categorically that it is outside the purview of the ILO to take a stand on whether countries should legalize prostitution. According to Lin Lim, "recognition of prostitution as an economic sector does not mean that the ILO is calling for the legalization of prostitution". The book takes pains to explain the different possible legal approaches - criminalization and total prohibition, legalization which involves registration and regulation of the sex establishments and the prostitutes, and decriminalization which treats the prostitutes as victims and imposes stronger criminal sanctions on those who traffic in, exploit or abuse prostitutes. But the ILO insists that it is for countries themselves to decide on the legal stance to adopt.
3 Lin Lean Lim, The Sex Sector: The Economic and social bases of prostitution in Southeast Asia. Geneva, ILO, 1998. ISBN 92-2-109522-3.
Health work is hard work:
New prescription for the care of both patients and providers
As the costs of providing health care rise around the world, most governments are trying to find ways to reduce them. Nevertheless, the health sector continues to expand in response to public demand. The stress which results from trying to reconcile cost-cutting with maintaining quality of health care is enormous. Among the key victims of this stress are those who provide health care. This article examines how assuring the welfare of health care workers is increasingly becoming as important as ensuring the health of their patients.
The global health sector is very labour intensive and a major employer of some 35 million people worldwide. According to a recent ILO report entitled Terms of employment and working conditions in health sector reforms, 4 the health sector involved an overall budget estimated at approximately US$ 2.3 trillion, or 9 per cent of global GDP. While there is comparatively low unemployment in this sector already, employment opportunities will most likely increase in the future.
The health sector is made up not only of doctors, nurses and pharmacists, but includes ambulance drivers, system managers, the people who cook hospital food and the workers who do the hospital or clinic laundry. Uniquely among most work sectors, health care is of vital importance to nearly every man, woman and child on the planet, but also for society and the economy as a whole.
Still, there is growing concern that all is not well among health sector employees. In addition to cost-cutting and budget-squeezing, health care workers are more frequently facing a myriad of threats at work, ranging from violence and sexual harassment, to infection, sickness and even death. Clearly, health work is hard work - and getting harder. And now, there is a growing understanding that the combined factors of underpaid employees, low job security and poor working conditions for health workers may not only be hard on patients, but contribute to a deterioration of the overall quality of health care.
Until now, most of the focus of international development on health concentrated on health care rather than the care of the health workers. To find ways of dealing with this critical global situation, the International Labour Organization (ILO) recently convened a joint meeting to look at the impact of health care reforms, and terms of employment and working conditions in the health sector, for the first time. And after a vivid - and sometimes shocking - discussion, the delegates - including governments in their role as public employers, as well as some representatives of private sector health providers and trade union representatives - adopted a series of ground-breaking conclusions designed to improve the working conditions of health-care employees, as well as access to health-care facilities and the quality of health services.
Health work is hard work. Many health workers spend long, sometimes lonely, hours on duty. Their work may expose them to infection, as well as chemical or biological poisoning. High stress is part of the job. Moreover, many health sector workers - including those who work in nursing homes - face verbal and physical aggression, since they often have contact with people in distress.
Of particular concern is the plight of women, who predominate among health care workers. In some countries, women comprise up to 80 per cent of all health workers. Women are good health-care providers, but unfortunately, far too many are at the bottom of the sector hierarchy, facing precarious, arduous and sometimes unsafe working conditions, while earning inadequate pay. They are also often subject to physical violence in the workplace, including sexual harassment.
At the same time, many millions of people, in both developed and developing countries, often lack the health care they need. In many places fiscal reforms may result in a two-tiered system, where those who can afford to pay receive high-quality care while those who can't receive little or none. This poses the a problem of equity, or fairness.
As populations grow, and in many places the number of ageing persons increases, new problems arise while old ones re-emerge. In addition, constant advances in technology require radical changes in treatment and work methods, and contribute to an increase in health care costs. Such changes involve not only the managers, but those who do the work, from the earliest planning stages to their final implementation.
Health costs and poor working conditions
The major item in any health budget is the amount needed to pay health workers. This usually represents more than half of the total for a health care budget, even though in many countries, health workers are underpaid, and face low job security and poor working conditions. Since the costs in this field keep rising, authorities would like to set limits on just how high they can go and make the best use of funds available. Conflict can result.
What's more, poor pay and poor working conditions and lack opportunities for advancement have had another impact: they are major causes for the departure, or "brain drain", of skilled health care staff from poorer countries, and a worsening of an already serious lack of nurses in highly industrialized nations.
In addition, there is a tendency in many countries to turn ever larger amounts of health care over to the private market-oriented sector. Still, there are responsibilities which go beyond the budget line. Trying to make health care universally accessible while finding a way to pay for it represents a difficult challenge for nearly every nation.
To address these issues, the Joint Meeting on Terms of Employment and Working Conditions in Health Sector Reforms, held in Geneva from 21 to 25 September 1998, adopted a number of conclusions, including the following:
This review was prepared by Nedd Willard, a freelance writer living in Geneva and a retired official of the WHO.
4 Terms of employment and working conditions in health sector reforms, International Labour Office, Geneva, 1998, ISBN 92-2-111070-2. Price: 17.50 Swiss francs.