Globalization, Export Processing Zones, and Beyond

Topics: International trade, Globalization, World Bank Pages: 14 (4096 words) Published: March 20, 2010
Discuss the connection of export processing zones (EPZs) to the growth of what McMichael calls "the globalization project". Why are EPZs consistent with the logic of neoliberal globalization? How has the growth of these zones been encouraged by the actions of key governing institutions in the globalization project? What was the relationship between the debt crisis of the early 1980s, the growth of structural adjustment programs and the growth of EPZs?

Moshe Lokshin


Globalization, Export Processing Zones, and Beyond

Prepared for Political Science 1090 Course

"Globalization - the first historical system to include the entire globe within its geography"

- Immanuel Wallerstein (1997)

We live in an age of global visions, where differences in time, space, nationality, and culture seem to have melted away, and globalization has become a defining term for the current era. It is the massive chain of events, a comprehensive global movement primarily concerning international economic growth, development, and integration of markets that has helped raise the standard of living for many people worldwide. It has also, however, driven many deeper into poverty. McMichael, in his book “Development and Social Change”, expands on critical events that led to the spark of the globalization project such as the rise of Export Processing Zones (EPZ), the debt crisis, the neo-liberal approach, and many others.

This paper reviews the rise of Export Processing Zones in the developing world as a widespread aspect of the current trend of economic globalization. This economic globalisation is providing immense wealth to various multinational companies, also known as transnational corporations. However what impact do these EPZs have on their host countries? Do they assist to, or hinder, development in the developing countries? In this paper it will be argued that the existence of the EPZ has been a key aspect in the rise of the globalization project, fostered by the IMF & The World Bank, and induced by the debt crisis of the 1980s. While the growth of the EPZs may appear as a contributing one in the short-run for economic growth, it has insidious bad effects in the long-run

In the past the developing countries were able to make their own policies and had the flexibility and the space to determine their own economic and social paths unhindered by international pressures such as globalization. Since the debt crisis Third World Countries had come under the World Bank and IMF “conditionality” in order to avoid debt default. Countries that are members of the WTO have also come under many policy obligations and constrains, not only in a sense of trade but also in sense of other agreements such as TRIMs, TRIPs, etc. Thus, the developing countries were bound by a constrained legal framework - Structural Adjustment Programs (SAPs) that are directly related to the growth and the development of Export Processing Zones.

Development has been a major aspect in our lives throughout the years. We are always looking for ways to advance ourselves technologically, economically, intellectually, socially, etc. Globalization is viewed as another step in development of humankind. The first step of global development had been seen during the end of the colonial era and was called “The Development Project”. It was a political response to the condition of the world at the era of decolonization (McMichael 46). McMichael has described the change as a switch of the policy of the hegemonic power from promotion of the “development project” launched in the late 1940s and early 1950s to promotion of the “globalization project” under the neoliberal Washington Consensus of the 1980s and 1990s. The development project promised to increase standards of living based on freedom of enterprise. However, this development has been brought at a very high social price that involved poverty, unemployment and inequity. Once this...

Cited: (Continued):
- Rondinelli, Dennis A. "Export Processing Zones and Economic Development in Asia: A Review and Reassessment of a Means of Promoting Growth and Jobs." American Journal of Economics and Sociology 46(1987): 90-91.
- "Structural Adjustment." Wikipedia. 2009. Wikipedia / Free Encyclopedia. Web.17 May 2009. .
- Zajda, Joseph. International Handbook on Globalisation Education and Policy Research. New Jersey: Springer, 2005. Print.
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