The maquiladora industry impact on the social and economic situation in Mexico in the era of globalization

Abstract

Modern day Mexico belongs to the group of the most industrialized countries of the Latin America, with almost one- fourth of GNP generated by industrial production. The focus point of the present study are maquiladoras (maquilas) – factories which originally specialized in subcontracting, now accounting for almost 50 % of the national exports, providing employment to approx. 10% of the work force available. The origins of such industrial activities date back to the beginnings of the 1960s. The liquidation of the “Bracero” program and indutrialization programs initiated by the Mexican government, such as the National Border Program (Programa Nacional Fronterizo, Pronaf) and the Border Industrialization Program (Programa de Industrialización Fronteriza, PIF), formed legal and economic foundations for the development of ‘maquilas’, which, in the successive decades, showed above-average developmental dynamics (12 plants in 1965 and 2810 plants in 2006). On the one hand, the fact of initial localizing the assembly-plants in the northern states, bordering the USA (Baja California, Sonora, Chihuahua, Coahuila) significantly reduced the costs of transport, yet on the other hand, the imminent industrialization of the border belt increased environmental pollution. This, along with systematic population growth in the northern urban centers (mainly Tijuana, Mexicali, Heroica Nogales and Ciudad Juárez) resulted in the maquiladoras posing an authentic threat to the area’s sustainable development. As a result of the reforms streamlined in the 1980s, and subsequently, the formation of NAFTA in 1994, apart from the assembly-related activities, the plants were given the opportunity to produce and sell goods on the domestic market. The quantitative and qualitative evolution made maquiladoras the second important symbol of the Mexican economy, after crude oil. The purpose of this study is to present the outline of the maquiladoras history, starting from the 1960s, up to the first decade of the 21st century. Unquestionably, their presence and influx of direct foreign investments related thereto, revived the Mexican economy and provided job opportunities (although, even today, the same arouse quite a lot of controversy). The present study contains an attempted assessment of their economic significance and the industry-specific employment policy under the conditions of progressing globalization.