Export Processing Zones in the Dominican Republic: Transforming manufactures into commodities

Abstract

This paper examines the performance of Export Processing Zones in the Dominican Republic. It shows that in specializing in unskilled labor-intensive export processing in the context of competitive devaluations between Central American countries, the Dominican Republic has experienced immiserizing employment growth. In these circumstances the export of labor-intensive manufactures is akin to that of primary commodities. Exporting countries which rely on unskilled labor and which fail to make the transition to higher value-added production exports are thus likely to experience declining terms of trade. The conclusions of this case study are considered to have wider relevance to World Bank and International Monetary Fund inspired structural adjustment programs in the Region.