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Global backing for more jobs and higher wages

india Updated: Mar 26, 2007 01:38 IST
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In 1854, voicing the disquiet of natives whose homes were being annexed across the North American continent in the name of progress, a Suquamish chief addressed the Washington government, “This we know: the earth does not belong to man, man belongs to the earth.”

Quixotic as the above sentiments sound, they are now being echoed by Indians on the other side of the Pacific. While many developed economies have surfaced at the expense of indigenous people’s rights, we have to ask whether such nation-building strategies are feasible or desirable in an age of democracy for all.

According to the World Bank, state development projects displace 10 million people every year and generally fail to resettle them at a better or even equal living standard. “State sovereignty is particularly abused when the state acquires land for corporate SEZs without the consent of affected peoples,” argues activist and former civil servant Harsh Mander.

SEZ supporters point to the model’s socio-economic success in China. The Shenzhen zone, for example, has grown from a village of less than 20,000 people in the seventies to a mega industrial hub with a GDP of 44 billion dollars by 2004. It now processes one-seventh of the Chinese trade volume and is ranked as the fourth-largest container throughput in the world. On the back of this economic success, Shenzhen’s per capita income has increased twenty-fold.

Globally, SEZs’ exports and employment have grown from six billion dollars and one million in the seventies to 600 billion dollars and 50 million (by 2003). Economic Processing Zones (EPZs) that offer an alternative model of export-led expansion have also shown substantive growth. ILO estimates that in 1997 EPZs employed 22.5 million people and this figure grew to 43 million within five years.

Mexico offers a mature EPZ model that has evolved from assembly to technologically intense operations. As its electronic exports grew from 18.25 million to 60 billion dollars between the mid-eighties and mid-nineties, the Guadalajara EPZ was hailed as the “the Silicon Valley of Mexico.” In 1996 alone this sector generated 28,603 jobs.

Successful special trade zones not only generate jobs but also offer higher salaries. To illustrate, the International Confederation of Free Trade Unions confirms that in Bangladesh such zones provide better working conditions and upto 45 per cent higher salaries than those provided by conventional employees.

The Confederation further verifies that these zones provide women a novel entry into the formal economy worldwide. Indeed women comprise 90 and 60 per cent of the workforce at the Santa Cruz and Cochin SEZs in India.

If SEZs have potential as engines of growth, what the ongoing protests across the country show is that we can no longer exploit such engines without fairly divvying up the profits among affected peoples.

In fact, as the Global Environmental Facility’s Michael Cernea says, the displaced should have the first entitlement to the benefits that their ordeal makes possible.

Cernea points out that a new Chinese policy will compensate dam-displaced people for 20 years and apply retroactively to people affected in the prior 57 years! More of these liberal policies will be needed to pave the development track in the future.