widely held view that the growth in the Southern industrial proletariat is highly concentrated in a small number of Southern nations, namely China, “the supplier of choice in virtually all labor-intensive global value chains,”43 and a handful of others. Ajit Ghose, a senior economist at the ILO, argues that “what appears to be a change in the pattern of North-South trade is in essence a change in the pattern of trade between industrialized countries and a group of 24 developing countries…. The rest of the developing world, in contrast, remained overwhelmingly dependent on export of primary commodities.”44 “The rest,” comprising more than 107 developing countries, “face global exclusion in the sense that they became increasingly insignificant players in the global marketplace.”45 Yet the 24 countries that Ghose reports have “shift[ed] their export base from primary commodities to manufactures” include eight of the ten most populous Southern nations, home to 76 percent of the total population of the global South. Of the ten most populous Southern nations, only Nigeria receives more from primary commodity exports than from manufactures.46 In addition, many other smaller nations have made a brave effort to reorient their economies to the export of manufactures and play host to manufacturing enclaves, also known as export processing zones, which exert a powerful and distorting influence on their national economies.
The southward shift of production during the neoliberal era is strikingly portrayed in Figures 2.1, 2.2, and 2.3. The solid line in Figure 2.1 shows that Southern nations’ share of global exports of manufactured goods began its steady rise in the late 1960s. Its ascent steepened in the second half of the 1970s, rising from around 5 percent in the pre-globalization period to 30 percent by the first decade of the twenty-first century. Figure 2.2 decomposes this trace to shows the share of developing nations in Europe, Japan, and the United States’ manufactured imports. The traces for Japan and the United States show a dramatic increase in their manufactured imports from low-wage countries, rising from around 10 to 45 percent in the case of the United States and to nearly 60 percent in the case of Japan, results that make IMF estimates of Japan’s static outsourcing intensity reported above appear ridiculous.47
The second trace in Figure 2.1 (broken line) shows that the share of manufactured goods in developing nations’ total exports commenced its astonishing ascent around 1980, increasing from 20 percent in that year to more than 60 percent in barely one decade. It then stabilized at this much higher level and, from the early 2000s, sloped downward, reflecting buoyant primary commodity prices and deteriorating manufacturing terms of trade. Figure 2.3 (page 54) decomposes this into different regions, revealing the widespread yet uneven character of the shift from the export of raw materials and foodstuffs to manufactured goods. If the different regions were disaggregated into individual countries we would find, as Ghose argues, that many small nations have not followed this pattern of development, yet the overall picture is clear.48
China’s rise is depicted in the trace for East Asia and Pacific, of which it is by far the largest component. There is other interesting detail in the graph—for example, manufactured exports as a share of total exports from South Asia, which includes India, Pakistan, Bangladesh, and Sri Lanka, was high even in 1980. Africa’s trace (data only from 1996) shows the continent has not made the transition to export-oriented industrialization—on the contrary, its domestic light industries have been ravaged by competition from China and other Asian countries. And the trace for the Middle East, for which manufactures make the smallest contribution to overall exports, is explained by the weight of oil in the regions’ total exports—its low score is therefore a sign of abundant wealth (which is not, of course, shared evenly between different Middle Eastern countries), and not, as in Africa’s case, a sign of poverty.
FIGURE 2.1: Developing Economies’ Trade in Manufactures
Source: UNCTAD Handbook of Statistics.
FIGURE 2.2: Developing Nations’ Share of Developed Nations’ Manufactured Imports
Source: UNCTAD, Handbook of Statistics Archive: Network of exports by region and commodity group, historical series (available at http://stats.unctad.org/handbook/ReportFolders/ReportFolders.aspx).
FIGURE 2.3: Manufactured Exports as a Percent of Merchandise Exports, by Region
Source: World Bank, World Development Indicators, July 2015.
Export-Processing Zones (EPZs)
The proliferation of EPZs, now found in more than 130 countries, provides further evidence that though industrial development in the global South may be unevenly distributed it is nevertheless very widespread. It also adds more detail to our account of the insatiable appetite of imperialist TNCs for ultra-flexible, low-waged employment in which all their needs are laid out on a carpet and “the burden of the cyclical nature of demand is placed on workers.”49
According to the World Bank, an export-processing zone is “an industrial estate, usually a fenced-in area of 10 to 300 hectares, that specializes in manufacturing for export. It offers firms free trade conditions and a liberal regulatory environment.”50 EPZs exhibit the following characteristics: “duty-free imports of raw and intermediate inputs and capital goods … red tape is streamlined … labor laws are often more flexible than … in the domestic market … generous, long-term tax concessions … infrastructure more advanced than in other parts of the country…. Utility and rental subsidies are common.”51 A long list, yet it is strangely incomplete—“flexible labor laws” is a euphemism for almost universal hostility to trade unions; the predilection of investors in EPZs for female labor is not mentioned—invariably, the large majority of the workforce are women (see chapter 4 for more on this), and neither is the most important factor of all, indeed the EPZs’ raison d’être—low wages.
EPZs in their various forms have played and continue to play a key role in the competitive race for export-oriented industrialization. Not only are they now found in a large majority of Southern nations, their classic features have become generalized: neoliberal globalization has gone a long way toward turning the whole of the global South into a vast export processing zone. As William Milberg comments, “The distinction between EPZ and non-EPZ activity has diminished in many countries as liberalization policies have expanded in the WTO and regional trade agreements.”52 Yet far from declining in significance, EPZs have experienced accelerating growth—the numbers employed in them nearly tripled between 1997 and 2006, the latest year for which there are statistics, when 63 million workers were employed in EPZs located in 132 countries. Milberg’s study of EPZ reports figures for a selection of economies, revealing that in 2006 EPZs were responsible for 75 percent or more of export earnings in Kenya, Malaysia, Madagascar, Vietnam, Dominican Republic, and Bangladesh, while Philippines, Mexico, Haiti, and Morocco earned 50 to 60 percent of exports from their EPZs. Between regions, however, significant disparities persist. The ILO’s Employment in EPZs database reports that Asia’s 900+ zones employed
