The new faces of informality in Central America

Journal of Latin American Studies

Volumn 30, Issue 1, 1998, Pages 157-179

  Perez Sainz J P ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

DEVELOPING REGION; GLOBALISATION; INFORMAL LABOUR; LABOUR MARKETS;

CENTRAL AMERICA;

EID: 0031804514     PISSN: 0022216X     EISSN: None     Source Type: Journal    
DOI: 10.1017/S0022216X97004938     Document Type: Article

References (31)

1. For an analysis of this debate, see inter alia J. P. Pérez Sáinz, Informalidad urbana en América Latina, Enfoques, problemáticas de interrogantes (Caracas, 1991), A. Portes and R. Schauffler, 'Competing Perspectives on the Latin American Informal Sector', Population and Development Review, vol. 19, no. 1 (1993) and C. Rakowski (ed.), Contrapunto: The Informal Sector Debate in Latin America (Albany, 1994).
2. For an analysis of this debate, see inter alia J. P. Pérez Sáinz, Informalidad urbana en América Latina, Enfoques, problemáticas de interrogantes (Caracas, 1991), A. Portes and R. Schauffler, 'Competing Perspectives on the Latin American Informal Sector', Population and Development Review, vol. 19, no. 1 (1993) and C. Rakowski (ed.), Contrapunto: The Informal Sector Debate in Latin America (Albany, 1994).
3. For an analysis of this debate, see inter alia J. P. Pérez Sáinz, Informalidad urbana en América Latina, Enfoques, problemáticas de interrogantes (Caracas, 1991), A. Portes and R. Schauffler, 'Competing Perspectives on the Latin American Informal Sector', Population and Development Review, vol. 19, no. 1 (1993) and C. Rakowski (ed.), Contrapunto: The Informal Sector Debate in Latin America (Albany, 1994).
4. It is estimated that non-traditional agricultural exports represent between 5 and 7 per cent of the rural employment of the region and that the maquila industry accounts for 10 per cent (in Honduras) and 25 per cent (in Costa Rica) of manufacturing jobs. See E. Baumeister, 'Características y potencial de la agricultura en la estrategia alternativa de desarrollo', in E. Stein and S. Arias (eds.), Democracia sin pobreza. Alternativa de desarrollo para el istmo centroamericano (San José, 1992) and J. P. Pérez Sáinz, 'Maquila y Trabajo en Centroamérica', Estudios del Trabajo, vol. 2, no. 2 (1996).
5. It is estimated that non-traditional agricultural exports represent between 5 and 7 per cent of the rural employment of the region and that the maquila industry accounts for 10 per cent (in Honduras) and 25 per cent (in Costa Rica) of manufacturing jobs. See E. Baumeister, 'Características y potencial de la agricultura en la estrategia alternativa de desarrollo', in E. Stein and S. Arias (eds.), Democracia sin pobreza. Alternativa de desarrollo para el istmo centroamericano (San José, 1992) and J. P. Pérez Sáinz, 'Maquila y Trabajo en Centroamérica', Estudios del Trabajo, vol. 2, no. 2 (1996).
6. PREALC, Cambio y polarización ocupacional en Centroamérica (San José, 1986), table 12.
7. Information obtained from household surveys, using the classic PREALC definition (establishments with less than five employees), show the following levels of informal employment in non-agricultural occupations: Guatemala, 53.0 per cent; El Salvador, 55.3 per cent in 1990; Honduras, 48.9 per cent in 1989; Nicaragua, 63.3 per cent in 1993, and Costa Rica, 34.4 per cent in 1991 (J. P. Pérez Sáinz, De la finca a la maquila. Modernización capitalista y trabajo en Centroamérica (San José, 1996, p. 131). Two further methodological observations are in order in connection with this type of statistical information, which tends to overemphasise formal occupation. First, the industrial establishments that generate employment are the ones that are engaged in the new export industry, i.e. the emerging sector of tradeables. Secondly, the dynamism of tertiary activities appears to be more related to the opening up of trade and the impact of globalisation than to any revitalisation of the former accumulation model.
8. See A. Portes, En torno a la informalidad. Ensayos sobre teoría y medición de la economía no regulada (Mexico, 1995).
9. Indeed, in the specific case of Central America, it could be argued that certain countries have never had much regulation, except perhaps in the public employment sector. See J. P. Pérez Sáinz, El dilema del nahual. Globalización, exclusión y trabajo en Centroamérica (San José, 1994). In other words, this approach can hardly explain the occupational heterogeneity that was prevalent in the region during the previous decades.
10. J. Mezzera, 'Informal Sector as in PREALC', mimeo.
11. Moreover, the technological changes that occurred, as a result, especially, of the development of microelectronics, do not allow for such an association to be made between technology and size of establishment which, in fact, is based on the Fordist model of economies of scale and mass production.
12. Pérez Sáinz, El dilema del nahual.
13. It should be pointed out that these analyses, which are exploratory in nature, are based on case studies: 20 each in the cases of Nicaragua and Costa Rica, and 17 in the case of Honduras.
14. Pérez Sáinz, El dilema del nahual, p. 48.
15. This section has been taken from a previous article on Latin America in general and adapted to the Central American context. See J. P. Pérez Sáinz, 'Globalización y neoinformalidad en América Latina', Nueva Sociedad, no. 135 (1995).
16. The term 'exclusion' is used here as an antonym of the term 'broadly based growth'.
17. Albeit slightly modified, this description reflects the typology proposed in another work. See Pérez Sáinz, Informalidad urbana en América Latina, table 5.
18. Regional studies conducted by FLACSO have shown this to be the case. See J. P. Pérez Sáinz and R. Menjívar Larín (coord.), Informalidad urbana en Centroamérica. Entre la acumulación y la subsistencia (Caracas, 1991) and R. Menjívar Larín and J. P. Pérez Sáinz (coord.), Ni héroes ni villanas. Género e informalidad en Centroamérica (San José, 1993).
19. Regional studies conducted by FLACSO have shown this to be the case. See J. P. Pérez Sáinz and R. Menjívar Larín (coord.), Informalidad urbana en Centroamérica. Entre la acumulación y la subsistencia (Caracas, 1991) and R. Menjívar Larín and J. P. Pérez Sáinz (coord.), Ni héroes ni villanas. Género e informalidad en Centroamérica (San José, 1993).
20. The term 'new poor' is used to designate groups, especially urban wage-earners, who are still able to satisfy their basic needs, thanks to the fact that they live in the city, but whose incomes have fallen below the poverty line as a result of the crisis. See R. Kaztman, 'La heterogeneidad de la pobreza. El caso de Montevideo', Revista de la CEPAL, no. 37 (1989).
21. The maquila industry, which is one of the clearest expressions of globalisation in the region, is a case in point. Thus, so-called second-generation maquila industries, as found in certain sectors (auto parts, advanced electronics, etc.), tend to use capital-intensive technology. On the other hand, traditional first-generation maquila, which is the type that is predominant in Central America, involves more labour-intensive activities.
22. The only study on this matter that has been conducted in the region is the one carried out in San Pedro Sacatepéquez, in Guatemala, by J. P. Pérez Sáinz and A. Leal ('Pequeña empresa, capital social y etnicidad: el caso de San Pedro Sacatepéquez', Debate, no. 17, Guatemala, 1992). With the boom in the maquila industry in Guatemala, this kakchiquel community, which had a long-standing tradition of small-scale garment shops, has become involved in the dynamics of globalisation through the practice of subcontracting on the part of companies located in the capital. This situation may also be analysed from the standpoint of the third scenario of neo-informality, to be discussed later on in this article.
23. This term was coined by B. Coriat (Pensar al revés. Trabajo y organización en la empresa japanesa (Madrid, 1993)), after T. Ohno, the famous Toyota engineer who developed the well-known Kan-Ban ('just-on-time') method. This strategy is aimed not only at minimising stocks but rather at ensuring optimum management of resources, both in terms of labour and of relations with suppliers.
24. A. Sayer and R. Walker (La nueva economía social. Re-elaboración de la división del trabajo (Madrid, 1994), pp. 186-91) suggest that there are two basic types of subcontracting arrangements, namely, the horizontal or associative and the vertical or hierarchical arrangements. The latter are divided into the following three modalities: the first involves relations with producer establishments; the second, on the other hand, entails control by a commercial firm over a number of different producers; and the third is the franchise modality.
25. There is an abundant literature on this phenomenon. In particular, it is worth mentioning the study by G. Becattini ('El distrito industrial marshalliano como concepto socio-económico' in F. Pyke, G. Becattini and W. Senegenberger (comps.), Los distritos industriales y las pequeñas empresas (Madrid, 1991)), which attempts to adjust the original concept developed by British economist Alfred Marshall to the situation of the so-called 'Third Italy'. This Italian author focuses on socio-territoriality as a central element in the definition of an industrial district. It should also be noted that C. Sabel ('Changing Models of Economic Efficiency and Their Implications for Industrialization in the Third World' in A. Foxley, M. S. McPherson and G. O'Donnell (eds.), Development, Democracy and the Art of Trespassing. Essays in Honor of Albert O. Hirschman (Notre Dame, 1988)), one of the main proponents of the flexible specialisation approach, postulated - some time ago - the potential of certain sectors of Latin American informality to evolve towards an industrial district situation. As always, however, it is important to be careful not to make generalisations about any particular model.
26. There is an abundant literature on this phenomenon. In particular, it is worth mentioning the study by G. Becattini ('El distrito industrial marshalliano como concepto socio-económico' in F. Pyke, G. Becattini and W. Senegenberger (comps.), Los distritos industriales y las pequeñas empresas (Madrid, 1991)), which attempts to adjust the original concept developed by British economist Alfred Marshall to the situation of the so-called 'Third Italy'. This Italian author focuses on socio-territoriality as a central element in the definition of an industrial district. It should also be noted that C. Sabel ('Changing Models of Economic Efficiency and Their Implications for Industrialization in the Third World' in A. Foxley, M. S. McPherson and G. O'Donnell (eds.), Development, Democracy and the Art of Trespassing. Essays in Honor of Albert O. Hirschman (Notre Dame, 1988)), one of the main proponents of the flexible specialisation approach, postulated - some time ago - the potential of certain sectors of Latin American informality to evolve towards an industrial district situation. As always, however, it is important to be careful not to make generalisations about any particular model.
27. A. Portes and J. Sensenbrenner, 'Embeddedness and Immigration: Notes on the Social Determinants of Economic Action', American Journal of Sociology, vol. 98, no. 6, (1993), pp. 1323-7.
28. Obviously, social capital exists in all three scenarios, as in any social context. But it is in this third scenario that the factor plays a key role in the growth of this type of neo-informality.
29. Under this programme, which originally envisaged the elimination of 10,000 jobs, 25,000 government workers applied for the incentives offered.
30. The first stage, i.e. the preparation of inputs, is carried out in a different plant; once the balls have been sewn by the home workers, they are finished at another plant, and from there they are exported to the United States.
31. The way these women describe themselves reflects this duality: they see themselves both as wage-earners and as independent workers, at the same time.