Export Processing Zones

EPZS are especially common in the following industries: garments/textiles, electronics, footwear/sporting apparel, toys, and pharmaceuticals.  Critics of these enclaves claim that the “trickle down” benefits touted by liberals are arrested or irrelevant in zones of exploitation. This is alleged because of a state-to-state competition for MNC investment that can drive wages, benefits, and worker conditions down—a socalled “race to the bottom.” Needless to say liberals dispute this is many cases, evidence for which is Raymond Vernon’s “obsolescing bargain theory” (discussed in course readings). On balance, however, EPZs among the poorest nations tend to be related to policies of last resort—the notion that “the only thing worse than being exploited is not being exploited” (Susan Strange). This leaves critics (e.g. NGO human rights groups, non-liberal economists, economic nationalists, citizen coalitions…) to wonder whether the social costs of EPZs can outweigh the promised benefits. Just what those benefits are (or whether they exist) is a question best evaluated on a case-by-case basis. What works for China, Indonesia, or Singapore, for example, is not necessarily the same for the Philippines, Guatemala, or Honduras.

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