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El Salvador Sees Industry as Pillar in Quake Recovery

Latin America: Plan to build factories aims to help the jobless. Critics warn of exploitation.


CHANMICO, El Salvador — In a combination of social engineering and disaster recovery that could reshape El Salvador's countryside, the government is creating maquiladora business zones near settlements it is building for landless, jobless earthquake victims.

In return for tax breaks and government aid to defer training and construction costs, the maquiladora factories would provide employment to the tens of thousands of small-business owners and farm workers in rural areas who were left without jobs after back-to-back earthquakes devastated El Salvador last winter.

In effect, the plan would turn farming families into labor pools for the maquiladoras, export factories owned by multinational companies that have created controversy in the past because of poor working conditions and low wages.

Labor groups have criticized the plan, saying unemployed families will be forced to take low-paying jobs in uncertain working conditions at the factories, most of them owned by Asian companies subcontracted to make clothing for U.S. corporations such as Nike or Gap.

"The workers are enormously in danger of being exploited," said Charles Kernaghan, head of the National Labor Committee, a nonprofit U.S. group that has long sought to improve working conditions in maquiladoras. "This seems like very frightening social engineering to jump into a vicious global economy."

The program is one element of a government effort to recover from the temblors' destruction by stepping up the industrialization of a country whose economy is still largely agriculture-based.

The plan is aimed at creating at least 150,000 jobs over the next several years, more than replacing the nearly 50,000 lost during the January and February quakes.

"We're going to create mini-industrial parks in the areas most affected by the earthquake, where there was the biggest loss of jobs, but also where there is the most labor available," said Economics Minister Miguel Lacayo.

Maquiladoras Accused of Ignoring Labor Rights

Despite improvements in working conditions in recent years, labor groups say the maquiladoras still ignore basic labor rights, refusing to permit unions and paying wages as low as $4.60 a day.

And while they welcome jobs that will benefit a country where more than 225,000 people have sunk into poverty since the earthquakes, the groups warn that the government must closely monitor working conditions.

"Within the context of the earthquake, this is a palliative measure, but it's not going to generate development," said Victor Aguilar, a Salvadoran union leader. "You are going to have to improve working conditions to improve development."

Municipal leaders, meanwhile, are concerned that the central government is taking advantage of the earthquakes to settle long-standing disputes over land. Many of the people left jobless by the quakes were rural poor who had illegally lived and worked on land left fallow by rich landholders.

By giving the poor new plots of land in hopes of steering them to factory jobs, the government ignores those who want to continue farming on the land they have worked for years.

The multinationals "pay low salaries, treat the workers badly and don't give many benefits," said Raul Mijango, vice president of January 13, a nonprofit group organized to encourage local control of recovery efforts. "Then they close up shop and take off."

With the earthquakes, El Salvador suddenly found itself facing two problems--one humanitarian, the other economic. More than 1,200 people were killed. The country's highways suffered serious damage. The cost of the disaster was put at $2 billion, equal to about a sixth of El Salvador's gross domestic product.

More than 200,000 homes were damaged or destroyed, many of them belonging to rural poor who eked out a living with tiny farms of corn and beans, or by running small businesses from their homes.

Tens of Thousands Put Out of Work

All told, between 40,000 and 50,000 people were put out of work in an economy where about two-thirds of the labor force earns about $137 a month.

"The problem is work--it doesn't exist," said Martha Navarrete, a field monitor for the United Nations World Food Program.

Recognizing that, the government drew up an ambitious job-recovery plan that relies heavily on signing or maintaining free-trade agreements to boost exports and bring in factory jobs. The goal is to create 405,000 jobs by 2004, while tripling annual exports from $2 billion to $6 billion.

The project to bring in new maquiladoras is one component. The idea is to spend $70 million to temporarily cover the companies' rent and training expenses and build warehouse and industrial parks in areas damaged by the quakes, such as San Vicente, which was almost completely flattened.

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