Geography Reference
In-Depth Information
specialization, cheaper transportation and advances in global technol-
ogy allowed corporations to be more responsive to market demands by
adopting a just-in-time (JIT) system that allowed greater fragmentation
of the production process and the employment of cheaper, semi-skilled
labour outside of European and North American labour markets.
In the 1900s, the EPZs increased at unprecedented rates across Latin
America, the Caribbean and Asia, as global brands like Disney and
Nike sought to reduce labour costs and expand their market share.
Partly fuelled by a retail revolution in the US, and advocated by the
World Bank and IMF as a solution to the debt crisis of the 1980s (see
Chapter 2.3), many countries in the global South had little choice but
to open their borders to free trade, FDI and 'world market factories'.
This promotion of export-oriented manufacturing in the global South,
combined with technological advances and the demand for cheaper,
unregulated labour by firms, provided the impetus for what became
known as the New International Division of Labour (NIDL).
Labelled as 'footloose' (Safa, 1981), due to their ability to move
around the globe in search of cheap, non-militant labour and tax incen-
tives, vast numbers of global businesses relocated parts of their produc-
tion process to developing countries; by 2003 there were 3,000 EPZs
worldwide. Problems of structural unemployment and domestic reces-
sion resulted in increasing competition between Southern governments
in order to attract FDI and export firms. Starting with Mexico, India,
the Caribbean and Malaysia, firms were quick to expand into
lower-waged nations like Vietnam, Indonesia, the Philippines and,
more recently, China. Originally focusing on primary and low technol-
ogy products such as minerals, oil and textiles, the NIDL saw a rapid
transition to medium- and high-technology industries such as electron-
ics, pharmaceuticals and data-processing in the 1990s. For example,
primary products accounted for 45 per cent of Mexico's total exports to
the US in 1998 but by 2008, medium-high technology products and
services made up 60 per cent of its US$234b exports (Sturgeon and
Gereffi, 2009).
In an attempt better to understand the inter-organizational networks
that link households, businesses and states together in the global
economy, Gereffi's (1994) work on global commodity chains provided
the rationale for global institutions like the International Labour
Organization (ILO) to explore the socio-economic impacts of the NIDL
on workers in the global South. In particular, concern has focused on
the flexible subcontraction chains that employ small-scale and
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