A Total Of 176 Vietnamese Women At A Taiwanese Owned Apparel Manufacturing Company


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  • Chapter 7-9 Economic Issues.
  • A Total Of 176 Vietnamese Women At A Taiwanese Owned Apparel Manufacturing Company

    1. 1. Macro-Economic Issues(B) R&W Chapters 7-9 Link to Encyclopedia of the Orient Link to WDI Link to Syllabus Link to https:// ctools.umich.edu /portal
    2. 2. Reforms See especially Chapter 9 of R&W.
    3. 3. Washington Consensus (p. 229 of R&W) <ul><li>Fiscal discipline </li></ul><ul><li>Reorientation of public expenditures </li></ul><ul><li>Tax reform </li></ul><ul><li>Interest rate liberalization </li></ul><ul><li>Unified and competitive exchange rates </li></ul><ul><li>Trade liberalization </li></ul><ul><li>Opening to foreign direct investment </li></ul><ul><li>Privatization </li></ul><ul><li>Deregulation </li></ul><ul><li>Securing property rights </li></ul>
    4. 4. Rodrik’s amendments to the Washington Consensus p. 229 <ul><li>Corporate governance </li></ul><ul><li>Anti-corruption </li></ul><ul><li>Adherence to WTO </li></ul><ul><li>Following international financial codes and standards </li></ul><ul><li>Prudent capital account opening </li></ul><ul><li>Non-intermediate exchange rate regimes </li></ul><ul><li>Independent central bank/ inflation targeting </li></ul><ul><li>Social Safety nets </li></ul><ul><li>Targeted poverty reduction </li></ul>
    5. 5. Samir Amin, 1931 - Samir Amin is an Egyptian political author, born in 1931. He currently lives in Dakar, Senegal. Amin was trained in Paris, and is one of the best-known Neo-Marxian thinkers, both in development theory as well as in the relativistic-cultural critique of social sciences. He is the director of the Forum du Tiers Monde (Third World Forum), based in Dakar. He is a promoter of the conscious self-reliance of developing countries, particular for the Arab world. His numerous books include Eurocentrism (1988), L'empire du chaos (Empire of Chaos, 1991) and Au-del? du capitalisme (Spectres of Capitalism, 1998).
    6. 6. Composite Index of Reform Source: Dasgupta et al.(2002), Reform and Elusive Growth in the Middle East… MNA - MENA EAP – East Asia LAC – Latin American SAR – Sub-Saharan Africa
    7. 7. Change in Composite Reform Index Source: Dasgupta et al., Reform and Elusive Growth in the Middle East…
    8. 8. World Bank Judges Egypt Top Reformer, 2008 Link to summary
    9. 9. Impact of Structural Reforms Source: M.K. Nabli and V é ganzon è s (2004) Reforms and Growth in MENA Countries
    10. 10. Telecommunications Liberalization in MENA Source: World Bank: Trade Investment and Development in MENA Figure 5.6
    11. 11. Inflation
    12. 12. Inflation, by Regions Source: WDI data
    13. 13. Inflation-CPI MENA Countries Source: WDI data
    14. 14. Calculated RERs Calculated as x-rate x PUS/Plocal. Increase in RER should increase exports
    15. 15. Turkey kicks the habit of high inflation Source: IMF Survey , September 20, 2004
    16. 16. Turkey: Real Exchange Rate Source: Central Bank of Turkey RER is measured as E*Pus/Plocal: increases in RER increase home exports
    17. 17. Turkey: Real Exchange Rate Source: Central Bank of Turkey 50% 100% Inflation in Turkey
    18. 18. Israel: REER Source: Data from WDI
    19. 19. RER in Egypt and Jordan RER is measured as E*Pus/Plocal: increases in RER increase home exports Source: Domac and Shabsigh IMF (1999)
    20. 20. Evolution of RER in Morocco and Tunisia Source: Domac and Shabsigh IMF (1999) RER is measured as E*Pus/Plocal
    21. 21. Fiscal Issues, Including Defense
    22. 22. MENA: Gov’t Fiscal Balance Source: World Bank (2006) Economic Development and Prospects: Financial Markets in a New Age of Oil page 112
    23. 23. Tax rates Source: Dasgupta et al., Reform and Elusive Growth in the Middle East…
    24. 24. World Defense Expenditures, 1999 Source: US Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers 1999-2000 374 Yemen 1,450 Morocco 281 USA 2,180 UAE 653 Lebanon 35 Russia 9,950 Turkey 2,690 Kuwait 11 India 357 Tunisia 8,700 Israel 89 China 4,450 Syria 1,250 Iraq 20 Africa 21,200 Saudi A. 6,880 Iran 55 Middle East 1,060 Qatar 2,390 Egypt 188 W. Europe 1,780 Oman 1,830 Algeria 852 World (US$mill) (US$ million) (US$ billion)
    25. 25. Relative size of Military Expenditures Source: Cordesman (2004) Military Balance in the Middle East
    26. 26. Decline of Real Military Expenditures in MENA, 1985-1999 Source: Cordesman (2004) Military Balance in the Middle East
    27. 27. Defense Expenditures/GDP, Regions Source: WDI
    28. 28. MENA: Military Expenditure/GDP, % Source: WDI (2006)
    29. 29. MENA: Military Expenditure/Gov’t
    30. 30. Tariffs and Trade Policy
    31. 31. Typical review of Reforms
    32. 32. No factories: no problems Link to MERIP on failure of WTO round in Seattle
    33. 33. Turkey’s FDI in Egypt Link to article
    34. 34. Turkey Sets Up Its First Industrial Park in Egypt Turkey sets up its first Industrial Park in Egypt By  Sherine El Madany First Published: January 17, 2008 AFP PHOTO/ KHALED DESOUKI                   CAIRO: After signing a free trade agreement in 2005 that was dubbed “a turning point in relations between two regional powers,” it was only a matter of time before Turkey established its first private industrial park in Egypt. Turkish President Abdullah Gul inaugurated Wednesday “The Polaris” industrial park, the first of its kind in Egypt, with investments totaling $1.5 billion. The private industrial park is a joint venture between the two countries that is estimated to attract $4 billion of investments in the next four years. “ Trade ties between the two countries have already been on the rise since [ratification] of the FTA,” said Minister of Trade and Industry Rachid Mohamed Rachid in a press statement. “ The majority of Turkish investments in Egypt seek to export to foreign markets, especially in Europe, the Middle East and Africa, as well as benefit from partnership agreements between Egypt and Europe, allowing preferential advantage of products manufactured in Egypt to enter these markets without customs,” he added. Sprawling two million square meters in the Sixth of October City — an area fit to host some 300 companies and factories — the cluster will include Turkish manufacturing operations from a number of sectors including textile and ready-made garments, furniture, automotive, glass, and food processing. The ministry expects total production capacity to reach $3.5–4 billion per year. Gul, who started an official visit to Egypt on Tuesday, told Reuters that recent economic reforms in the Arab country spurred interest from Turkish investors.
    35. 35. Trade Policy Indicators Source: Dasgupta et al., Reform and Elusive Growth in the Middle East…
    36. 36. Unweighted Import Tariff Rates-Regions SAR: South Asia, SSA: Sub.Sah. Africa, ECA: East Asia Source: World Bank: Trade Investment and Development in MENA Figure 3.1
    37. 37. MENA Tariffs Column Titles: Simple Average, Weighted Average Std. Deviation. ECA4 – Central Europe & Turkey EAP5 – East Asia Source: World Bank Trade, Inv. and Development
    38. 38. Long Term Trends in Trade Integration: World and MENA Source: World Bank: Trade Investment and Development in MENA Figure 2.2
    39. 39. Intra-Industry Trade Ratio in MENA Source: World Bank: Trade Investment and Development in MENA Figure 2.7 p. 81 Index for all manufactures, in 1988 and 2000. Higher numbers indicate more integrated trade.
    40. 40. Morocco: Employment Growth and Manufactured Exports Source: World Bank: Trade Investment and Development in MENA Figure 1.23
    41. 41. Export Diversification of MENA (late 1990s) The smaller the number, the more diversified
    42. 42. Inter-regional trade among ESCWA
    43. 43. World Market Share of Textiles and Garments Source: World Bank: Trade Investment and Development in MENA Figure 1.7
    44. 44. Share of World Exports of Services: MENA and Other Regions Source: World Bank: Trade Investment and Development in MENA Figure 2.10
    45. 45. Free Trade Agreements Involving MENA Countries Most MENA countries are members of the World Trade Organization: Algeria, Iraq, Iran, Lebanon, Libya, and Yemen are negotiating accession, and only Syria is not actively seeking entry. Jordan also has FTA type agreements with Syria, Kuwait, and Singapore. Israel has FTAs with Canada, Mexico, and several other countries Turkey and the EU have an agreement which involves significant reduction of tariffs (everything but agriculture), but does not include Turkey’s membership in the EU EUAA – Association Agreement to the European Union–Mediterranean FTA - is a proto-FTA of the EU with the Mediterranean countries, also involving foreign aid, investment regulations, and similar arrangements. The Greater Arab Free Trade Area (1997) is a work in progress. x x GCC x x x Jordan Egypt x x x Turkey No! x EUAA EUAA EUAA x EUAA ? EU 2004 x x Israel x x 2006 2001 1985 USA Oman Bahr Libya Leb Tun Moroc Algeria GCC Jordan Egypt Turkey EU Israel
    46. 46. Bush kicks off new round of free-trade talks in the Middle East U.S. president seeks to create FTAs with every nation in the region by 2013 By Agence France Presse (AFP) Compiled by Daily Star staff Friday, March 11, 2005 The Bush administration, seeking to provide economic support for its efforts to spread democracy in the Middle East, launched a new round of free-trade talks in the region this week while an Egyptian official said Wednesday he believed his country's own negotiations with the United States would start soon. Egyptian Trade Minister Rashid Mohammed Rashid described his meeting in Washington with Acting U.S. Trade Representative Peter Allgeier in optimistic terms, saying he was hopeful that free-trade talks with the United States would begin &quot;in the near future.&quot; &quot;We do not have a specific date for when we can start negotiation of an FTA (Free Trade Agreement). But we are both moving on the right track,&quot; Rashid said in describing his talks with Allgeier. The Bush administration is pushing to strike free-trade deals with a number of countries in the Middle East as a prelude to Bush's ultimate goal of creating a free-trade area throughout the region by 2013. The hope is that greater trade with the United States will bolster economic growth in the region and help support Bush's goals of fighting terrorism and spreading democracy in that part of the world. The administration currently has free-trade agreements in that area of the world with Israel, Jordan and Morocco. A free-trade deal negotiated last year with Bahrain is pending congressional approval. The administration has delayed starting talks with Egypt until the country makes further economic reforms. Rashid argued that the country is moving quickly to implement a wide range of economic reforms and a free-trade agreement with the United States would help promote even greater reforms.
    47. 47. FDI, Privatization, and Growth of Stock Markets
    48. 48. Link to data on Recent FDI into MENA Link http://www-personal.umd.umich.edu/~mtwomey/econhelp/344files/Table18%20International%20Finance.doc
    49. 49. Link to FDI Table 17: 20 th Century FDI in MENA Link http://www-personal.umd.umich.edu/~mtwomey/econhelp/344files/Table17EarlyFI.doc
    50. 50. Share of FDI Inflows p. 182 Source: World Bank (2004) Unlocking the Employment Potential in the MENA page 182
    51. 51. Quick Review of Theory of Foreign Investment Distinguish Direct Investment from Portfolio Investment Direct Investment because of special advantage of Investor Company Technology, Trademark/Patent, Operational practice, Access to credit or external markets, protection of home country Attraction of country: low wages, availability of resources, tax benefits access to market Profit rates, wages, import reliance, etc. will be higher for FDI company Benefits will decline over time (product cycle) FDI will be market seeking or resource seeking
    52. 52. FDI Potential Source: World Bank: Trade Investment and Development in MENA Figure 1.18
    53. 53. Jordan Times on Vietnamese Women’s Strike in Jordan: March 2008 Link to article Link to site on QIZ’s http://www.jordanecb.org/investment_qiz.shtm
    54. 54. QIZ Vietnamese workers refuse to end strike By Hani Hazaimeh SAHAB - A total of 176 Vietnamese women at a Taiwanese-owned apparel manufacturing company in Al Tajamouat Industrial Estate are still on strike demanding a pay increase. Upon the work stoppage on February 10, the workers linked their return to a W&D Apparel Corporation’s consent to increase their monthly salary from $175 to $265 per month and a basic eight-hour workday. The factory owner said the demand contradicts employment contracts they had signed. He accused some strikers of exercising violence and sabotage. “ When the company refused to meet their conditions, they started rioting and sabotaged some of the company’s properties. The management had no choice but to call police to restore order,” James Shen, W&D general manager, told The Jordan Times yesterday. “ Some of the strikers stole mechanical parts from sewing machines to prevent the company from hiring other workers to replace them,” he charged. He added that the management has met with 10 representatives of the strikers, but the two sides reached no agreement although the managers offered some “compensation”. He explained that the financial compensation was paid for those who had worked overtime hours and were the most productive. “ Those were satisfied with the compensation and wanted to go back to work. But those who did not get compensation threatened them,” Shen claimed. Thirty-year-old Di Thi Wei, one of the workers, upheld his claim. She told The Jordan Times that she accepted the compensation and decided to go back to work despite the strike leaders’ threats. “The company moved us to a different place to protect us from being assaulted by the strike leaders,” she added. Di Thi was one of the 85 women who resumed work, said the general manager, noting that the company had to rent new dormitories to ensure their safety. Echoing her colleague’s words, Nguyen Thi Tuoi, 26, said she was beaten badly by the strike leaders for going back to work before she moved to the new dorms. “ They even poured cold water on me while I was sleeping in bed in the middle of a cold night,” she told The Jordan Times. “They tore my clothes and my shoes and I had to borrow clothes from another worker.” Jordan Times : March 5, 3008 QIZ Vietnamese workers refuse to end strike Vietnamese female workers who ended a strike at a QIZ factory have a meal on Tuesday at a makeshift canteen where they eat separately from 176 colleagues who are still on a strike (Photo by Hani Hazaimeh)                                                    
    55. 55. Excerpt from US Embassy Site on Jordan FTA http://usembassy-amman.org.jo/QIIZ.htm QUALIFYING A PRODUCT Q:  How does the FTA affect the Qualified Industrial Zone (QIZ) initiative? A:  The FTA does not supersede or eliminate the QIZ initiative.  The QIZ initiative currently grants immediate tariff and quota-free access to the U.S. market to goods that are produced in the QIZ’s and meet specific rules of origin requirements.  Under the FTA, tariffs and quotas for many goods are phased out over time, and rules of origin require 35% Jordanian content.  Thus for some high-tariff goods, producing in QIZ’s will retain an advantage.   For instance, many apparel goods face U.S. tariffs of up to 30%.  Under the FTA, tariffs on these goods would be reduced over ten years, and Jordanian exports would have to meet the 35% Jordanian content level.  Under the QIZ initiative, those same goods would enjoy immediate elimination of tariffs and quotas, and would require a lower level of Jordanian inputs.  Thus in this case, QIZ-produced products would enjoy a comparative advantage. Q: Who qualifies products for duty free entry in the United States?  What information is required? A: A committee consisting of Jordanian and Israeli government officials determines whether products are eligible for duty-free treatment.  The manufacturer must provide detailed information about the costs of materials and labor to prove that the product fulfills QIZ production requirements.
    56. 56. Privatization Proceeds Source: Dasgupta et al., Reform and Elusive Growth in the Middle East…
    57. 57. Cumulative Privatization Proceeds/GDP (%), 1988-2003 Source: Privatization proceeds from WB Privatization database http://rru.worldbank.org/Privatization/; GDP from WDI Positive but < 0.5 Algeria, Bahrain, Iran UAE, Yemen. Presumably zero elsewhere (e.g. Libya, Syria). 3 Oman 3 Turkey 19 Morocco 4 Tunisia 1 Lebanon 2 Saudi A. 11 Jordan 3 Qatar 6 Egypt
    58. 58. Stock Market data Source: Neaime (2006) Thunderbird Review
    59. 59. Market Capitalization/GDP Source: WDI. Missing are Algeria, Iraq, Syria, Yemen Lebanon US Jordan Iran
    60. 60. Debt Data
    61. 61. Table 8.2 p. 214. External Debt, 1994 and 2004
    62. 62. Debt/GDP
    63. 63. Foreign Assets/GDP: Oil Exporters (Data in billion US$) Sources: Estimates on overseas assets – referring to 2007-, from Setser and Ziemba, “Understanding the New Financial Superpower- The Management of GCC Official Foreign Assets,” RGE Monitor Dec. 2007. GDP estimates (for 2007) from EIU Monthly Reports . 1.6 62 100 Qatar 2.8 109 300 Kuwait 1.6 372 600 Saudi Arabia 4.8 187 900 UAE Ratio GDP Overseas Assets
    64. 65. Tech. Composition of exports of Lebanon and other MENA
    65. 66. Trade to GDP Ratios in MENA Source: World Bank: Trade Investment and Development in MENA Figure 2.3
    66. 67. Hirschman Export Concentration Index LAC-Latin America, EAP5 East Asia, ECA3 Europe. Source: World Bank, Trade Investment and Development
    67. 68. Tourism/GDP: MENA and Other Regions Source: World Bank: Trade Investment and Development in MENA Figure 2.8