El Salvador Sees Industry as Pillar in Quake Recovery


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.

If successful, industry will finally arrive in an area now devoted almost exclusively to farming. In a meeting with a visiting group of Americans this year, presidential advisor Juan Jose Daboub, now secretary of the treasury, was asked what support the government would offer small farmers recovering from the earthquakes.

He told the group that the government would try to steer farmers to the new maquiladora jobs by convincing them that agriculture is less profitable than factory work.

It's unclear whether the plan will work. In fact, maquiladora owners have reportedly resisted the idea of building new factories unless the government sweetens the pot even more, lowering the minimum wage paid to workers in rural and semirural areas.

Labor groups fear that this in turn would result in either job losses in urban areas as more factories relocate to the countryside in search of lower wage costs or, worse, create a pressure to cut wages throughout El Salvador.

"While it's true that working conditions have improved, the idea of lowering the minimum salary would be a retreat," said Antonio Candray, head of the Labor Assistance Center, a Salvadoran nonprofit agency. "It wouldn't make conditions more humane."

Although not a formal part of the project, a preview of the government plan came in May, when the city of Chanmico was suddenly born, exploding from about 15 people to 5,000 in a few days.

That was when the government began busing thousands of victims of the Jan. 13 and Feb. 13 quakes to this isolated outpost between the middle of nowhere and the capital, San Salvador.

Those who relocated said they had little choice but to accept the government's offer to move onto land it had bought from a wealthy ranch owner. Most of the new residents had been squatters, working on coffee ranches or as servants and living in illegally built neighborhoods outside San Salvador that were destroyed in the quakes.

When government officials offered a small chunk of land, and the promise of building a permanent home, few turned down the opportunity to become homeowners--to own anything, really--for the first time in their lives. They were tired of living in tents on a crowded soccer field.

Besides, local officials told them that they needed the field back for soccer games.

"The government said it would give us this land in return for what we lost," Rodolfo Rivas, 26, said as he sawed a 2-by-4 outside his tin shack. He planned to use the wood to shore up the house to protect it against the wind. "Now we're waiting to see what will happen."

Today, hundreds of tiny corrugated tin huts gleam in the sun, marching in orderly rows up gentle hills in the shadow of a dormant volcano. Surrounded by a barren landscape of twisted black lava rock, the town has few trees, no grass. A thin layer of dust and smoke from cooking fires seems to choke the air.

The new town has neither running water nor electricity. During recent thunderstorms, huge gusts of wind leveled 40 huts, picking them up and smashing them against the ground like toys.

Despite the hardships, the new residents of Chanmico have already banded together to seek better public services. On a recent day, a group of mothers gathered under a white tent to plan how to build a school. In the background, a heavy rain fell and a rainbow formed in the distance.

When the conversation turned to jobs, Jose Salvador Garcia, the president of one of Chanmico's new neighborhoods, simply smiled and pointed to a billboard just down the road advertising a new free-trade zone.

The zone was built exclusively to hold a massive factory for a South Korean company, Lido Industries, that makes clothes for Oakland-based Koret of California Inc. and its parent company, St. Louis-based Kellwood Co.

The neighborhood leader said he had already begun talking with government officials about the possibility of luring new companies with the huge supply of labor in Chanmico. But he wasn't worried about the possibility of being exploited.

"We have needs, but we're not going to let anyone manipulate us," he said.

Idea of a Factory Job Appeals to Many

Many of those interviewed in Chanmico said they would welcome a factory job. After lifetimes spent in backbreaking labor on coffee farms or working as servants in the homes of wealthy patrons, the idea of a job pressing a button or sewing a garment seems appealing.

"I've worked in many coffee farms. It's very hot in the fields," said Josefina del Carmen Gonzales, 32, who sat in a small store in the middle of Chanmico, eight months pregnant and surrounded by her four children. "I'd take a job in a factory."

Other residents weren't so sure. Woodcutter Jose Alvaro Sorreano was lashing pieces of tin together the day after the winds had blown apart his home. He wasn't sure that a factory job was the best idea.

"In the beginning, it might look good," he said. "But in the end, who knows what will happen?"


Special correspondent Alexander Renderos in El Salvador contributed to this report.

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