US plants south of border offer help to Mexico's economic woes

By , Staff writer of The Christian Science Monitor

Industrial growth south of the US-Mexico border is boosting the economies of both nations. Today about 200,000 Mexicans are employed in 700 plants huddled mostly along the border. The plants, involved in electronics, clothing, furniture, toys, and vehicle assembly, are part of a Mexican program that allows 100 percent foreign ownership of plants involving assembly of foreign-produced parts for foreign consumption.

According to Alejandro Horcasitas, marketing manager for a large industrial-park developer in Cuidad Ju'arez, the growing number of assembly plants -- called ``maquiladoras,'' or simply ``maquilas'' in Mexico -- could employ 1 million Mexicans by the turn of the century. Today, in large part because of the maquiladoras, the per capita income in Mexico's border regions rivals that of Mexico City.

Industrialization of the Mexican border region also has deep implications for the American side, which stands to profit from a growing employed population and a general increase in economic activity. Some border observers even believe the industrialization, especially if expanded generally into the Mexican interior, could help stem the flow of illegal aliens into the United States.

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The main incentive for expansion of the plants is the availability of cheap labor. The minimum hourly wage in the plants, including fringe benefits, is about $1.10, making Mexico cheaper than the Asian countries usually associated with such assembly.

``Ciudad Ju'arez has taken the place of Hong Kong, Taiwan, and the others as the assembly capital of the world,'' says Oscar J. Martinez, director of the Center for Inter-American and Border Studies at the University of Texas at El Paso. Ciudad Ju'arez is the center of assembly activity, employing more than one-third of the maquiladora work force. Other important centers include Tijuana, Matamoros, Reynosa, Nogales, and Mexicali.

The assembly-plant program has faced major criticism on both sides of the border. American labor unions condemn the loss in US jobs the plants entail. William Mitchell, director of marketing for the Grupo Bermudez Industrial Parks in Ciudad Ju'arez disagrees. ``The more assembly there is in Mexico, the more activity we'll see for American suppliers, transporters, and others.''

Mr. Mitchell, who has worked with the maquiladora industry for 14 years, keeps a list of nearly 5,000 US suppliers who last year shipped $2 billion worth of raw materials and equipment into Cuidad Ju'arez. He says nearly 100,000 US workers in 42 states are actively involved in supplying Ju'arez's maquiladoras.

Criticism south of the border comes from Mexicans who emphasize the sociological effects of an industry employing mostly young women, or those who question the wisdom of heavier dependence on the US economy. But criticism has ebbed as the maquiladoras continue to offer one of the few bright spots in the Mexican economy. In addition, more men are gradually entering the work force, although they still constitute a minority.

``This kind of industrialization is now considered a priority for the whole of Mexico,'' says Guillermina Valdez Villalva, a social psychologist with the Center for Northern Border Studies in Ju'arez. Ms. Valdez, who is also director of Ju'arez's Center for Working Women, says the plants fomented a certain upheaval in Mexican border society, because they hired mostly young women.

``The maquilas didn't address the border's high unemployment, as some had hoped, because men were still left idle,'' says Ms. Valdez. She adds that many families opted to educate daughters instead of sons when many of the plants began requiring nine years of education.

Charges of exploitation of women, once virulent, have died down as wages and working conditions have improved. ``The new plants are very clean and pleasant,'' says Maria Elena Gallego, a maquiladora promoter in Nogales, Mexico. The benefits, she adds, which can include lunch, transportation, child care, and medical care, ``are often better than with similar work in the US.''

Perhaps most frustrating for Mexico, says Ms. Valdez, is the tendency of many of the women, some with the technical skills the country needs, to quit their jobs to work illegally in the US. Even as maids, she notes, they make three or four times their former wage.

Yet the maquiladoras remain a national priority in part because they are this nation's second source of foreign currency -- after oil, but ahead of tourism.

To encourage ``internationalizing'' of Mexico's economy, the government now allows the plants to sell a portion of their products in Mexico if some of the raw materials are of Mexican origin. The maquiladoras, once limited to within 28 miles of the border, are now allowed throughout the country.

``The maquiladoras can have a tremendously positive effect on Mexico, provided the Mexicans view them less as an enclave activity and integrate them more into the rest of the economy,'' says Joseph Grunwald, president of the Institute of the Americas in La Jolla, Calif. Dr. Grunwald says the fact that some interior maquiladoras are already using more than 10 percent Mexican materials in their production ``bodes well for Mexico.'' Fourth of five articles. Tomorrow: The future.

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