From: Human Rights Coordinator <hrcoord@igc.apc.org>
Newsgroups: soc.culture.latin-america
Date: 14 Aug 92 10:17 PDT
Subject: IPS: Tapping Export Processing
Nf-ID: #N:cdp:1473800257:000:4016
Nf-From: cdp.UUCP!hrcoord    Aug 14 10:17:00 1992


From: Human Rights Coordinator <hrcoord>
Subject: IPS: Tapping Export Processing

/* Written 12:06 am  Aug 14, 1992 by newsdesk in
cdp:ips.englibrary */ Copyright Inter Press Service 1992, all
rights reserved.  Permission to re- print within 7 days of
original date only with permission from 'newsdesk'.

Title: CENTRAL AMERICA: TAPPING EXPORT PROCESSING ZONES TO WOO
INVESTORS

an inter press service feature

by jesus mora

san jose, aug 11 (ips) -- when central american countries realised
the need for new alternatives to ensure development, they found
that setting up export processing zones was a very lucrative
undertaking.

due to its proximity to the big and rich u.s. market, central
america has earned the reputation of being the ''promised land''
for foreign investors who are also attracted to the cheap labour
offered in the region.

but the different political and economic conditions in each
country have lead the central american governments to follow
various paths at different moments and through different means,
thus triggering an irregular level of development in each
country.

each central american government is working on ways to promote
development, but through local policies which reflect more or less
each country's past experience in the field of investments and the
creation of export processing zones.

experts have stressed the need to overcome the still deficient
levels of development in central american countries so more
foreign investments will come in.

foreign businessmen are always on the lookout for an assurance of
political and economic stability which will guarantee profits and
better competition.

at present, there are already about 18 export zones in central
america and another six more are expected to be set up late this
year.

juan pasos, marketing director of costa rica's corporation of free
export zones, said investors choose a country based on the
advantages they find here in comparison to others.

''central american countries are now creating specific legal rules
for the free zones, like tax exemptions on rentals for several
years,'' pasos said.

firms set up in these zones are given a free hand in money matters
and total exemption from taxes on machinery, equipment, raw
materials and local purchases.

an investor firm helps a developing country when it buys local raw
materials, acquires assets and creates direct and indirect
employment, he said.  (more/ips)

central america: tapping (2)

through the export processing zones, developing countries also
benefit from technology transfer and an improvement in
international competition.

in costa rica, the 100 firms operating in the country's export
processing zone generate some 8,000 direct and 24,000 indirect
jobs. last year, these firms paid out some 100 million dollars in
the country.

most of the biggest investments in the region come from the united
states. in costa rica, about 70 percent of the firms in the zone
are from the united states, while 10 percent are korean, another
10 percent european and the rest are local firms with u.s.
partners.

in el salvador, u.s., japanese, chinese, korean and pakistani
firms have been set up in the country's export zone. in nicaragua,
the investors are mostly u.s., taiwanese and korean firms while in
honduras, they are u.s., taiwanese, hong kong and korean firms.

in guatemala, the free export zones are still a new concept and
the process has barely started. but investments are slow to come
by due to the little credibility which the government has in
international financial circles.

but central america is not the only out to gain markets, attract
investments and in the process promote national progress, and
competition is severe.

other countries like the dominican republic, jamaica and puerto
rico are strong rivals in the bid to attract foreign capital.
brazil, uruguay, paraguay and argentina, which are member-states
of the south american common market (mercosur), have also joined
the competition. (end/ips/trd/jm/cr/cir/92)