IN PURSUIT OF PROFIT A Primer on the New Transnational Investment
Transnational corporations touch our lives in a multitude of ways. They make most of the clothes we wear, the food we eat, and the household products we use. It's easy to be lulled into thinking...
...And as Mexico learned the hard way, this speculative investment can disappear with the touch of a computer key...
...What we see, of course, is only the visible end result of complex global production networks often involving workers in several countries...
...Latin American nations, up to their eyeballs in debt, were pressured by international lending institutions to implement orthodox tight- money policies and to open up their economies to foreign capital...
...When the rebels were asked if they were against globalization, they responded in a communique: "Our struggle is not against the future, but about who shapes that future and who benefits from it...
...Different types of industries have integrated Latin America into their production networks in different ways...
...Transnational corporations in more capital-intensive, high-tech industries-such as automo- tives-set up operations in countries like Mexico and Brazil with large populations and a higher degree of industrialization...
...This bonanza, seemingly beneficial, carries hidden costs...
...In labor- intensive, low-tech industries like apparel and electronics, low-wage labor is considered essential...
...While these firms have provided decent jobs for a select few and created some backward linkages to the economy as a whole, they maintain an iron grip on ownership of technology and repatriate much of the profits they generate...
...For many, this results in a visceral reaction of "no to globalization...
...The primary goal of this NACLA report is to bring these processes into the light- to describe in layman's terms how global corporations are structured, how they operate, and how Latin America fits into the picture...
...The "resolution" of the debt crisis of the 1980s has handed over more control than ever before to foreign capital in the region...
...It's easy to be lulled into thinking that these products have no history...
...Since large retail buyers often do not own the factories where goods are assembled, they can turn a blind eye to labor abuses...
...This sort of map-making is particularly important today...
...Assets were handed over in debt-equity swaps, and foreign investors were active bidders in the fire sale of state enterprises...
...trade and development policies, these industries are farming out the labor-intensive segment of the production process to maquiladoras in Central America, the Caribbean, and the Mexican border region...
...Trade accords like NAFTA and the GATT-for which transnational corporations actively lobbied-have locked in favorable terms for foreign investment...
...Countries that rely upon finance capital have found their control over national economic policy slipping away...
...The challenge before us is to make globalization work to our advantage in the fight for social justice...
...However, since globalization is rooted in advances in telecommunications and transportation technology, the genie cannot be put back in the bottle...
...Transnational corporations have also reasserted their presence in the region in dramatic fashion...
...The Zapatistas' stance is instructive in this regard...
...Portfolio investment-money in the form of stocks and bonds-is highly concentrated in the larger, more industrially advanced countries such as Mexico and Brazil...
...With the backing of U.S...
...Globalization has become associated in our minds with corporate profit, growing income concentration, the decline of workers' rights, environmental degradation, and increased corporate power...
...Across the region, coun- tries have embarked on a strategy of export-led growth that relies upon foreign investors to bring in new technology and capital...
...Enticed by these reforms, private capital has flowed into the region...
...The global money market is ruthless in penalizing countries that dare to stray from its dictates...
Vol. 29 • January 1996 • No. 4
