Free Zones going down the tubes.

El Vegano

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Apr 20, 2006
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The Free Zone system in the DR has given employment to nearly 200,000 dominican families in the past and now are down to about half of that figure.
In addition, tens of thousands indirect jobs are created in the transportation and food provision sectors, to say nothing of the energizing of commercial sights anywhere near the Free Zones.

Unfortunately, the unlimited growth of China in recent years, and other Asian countries, has hit the DR Free Zone system extremely hard since our cultural
habits and employee-friendly labor laws place us at great disadvantage against these Asian competitors. If this was not enough, the present government, in its infinite 'wisdom', considers it appropriate to place additional duties and regulations which make us even less competitive.

As a manager of one of those factories I am sad to say that 50% of my 150employees are right now sitting home with little or no possibility of returning to work and those that are here only have assured their jobs through Dec.
22, 4 weeks from now. It's a shame.
 

A.Hidalgo

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Apr 28, 2006
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I have a cousin from Santiago who was a manager in the Zona Franca. Worked there for over 20 years until about 3 years ago when the owner closed shop to go overseas. Good thing he saw it coming and prepared himself for the inevitable. Its called globalization and the hundreds perhaps thousands of sad unemployed stories as a result of this dynamic, are just a blip in the impersonal economics of this reality.:cry:
 

gringito

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Feb 21, 2005
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It Is Going To Get Worse

If the cost of electricity doesn't start coming down drastically, industrials in the Free Zones will not be able to compete with industrials in other CAFTA countries with much lower costs for electricity. A lot of people are going to end up unemployed I am afraid.

Regards
 

El Vegano

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Apr 20, 2006
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What goes around comes around ...?

Now that I think of it, perhaps this is a result of the old saying, 'what goes around comes around'; that is, some years back these Latin American countries started taking over the garment and other industries down here since salaries were much lower than in the U.S. Workers in the U.S. were left without hundreds of thousands of jobs. Now, it's being done to us down here by the Asians.

What goes around, comes around.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
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Win you win bhy price, you will ultimately lose by price. The same is true for the tourist industry, too. When the cost of a trip to the DR nears other locations, fewer tourists will go to the DR.
 
Mar 21, 2002
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So what's your solution, Vegano. Poor dominicans in general consider Zona Franca jobs as rubbish. Being a manager, I doubt they would convey this information to you in all honesty.
 

El Vegano

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Apr 20, 2006
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What would be the alternative to those rubbish jobs?

So what's your solution, Vegano. Poor dominicans in general consider Zona Franca jobs as rubbish. Being a manager, I doubt they would convey this information to you in all honesty.

Undoubtedly, Free Zone jobs are no way to become rich, by any means, but at least they puts food on the table of those 'lucky' enough to get one of those 'rubbish jobs'. What would be the alternative?

A dangerous crossing to Puerto Rico. Prostitution. Theft. Murder. Near starvation. Death from simple illnesses that cannot be treated. And so on.

As a manager, I am the first one to realize the nature of their situation and I empathize but cannot do much more than:

- make sure they get paid, in compliance with the Labor laws, completely and on time;
- pay my part of their Pension, Social Security and Labor Risk premiums every month, without fail;
- be as humane as possible and help ease their daily problems by making small interest-free loans and advances.

All these people out on the street and desperately unemployed are a very dangerous situation for the country as a whole. The sooner someone can establish something better than the Free Zone 'rubbish jobs' the better, in the meantime, it's easy to make light comments when it's not you in the shoes of that poorly educated, marginalized Free Zone worker.
 

HOWMAR

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Jan 28, 2004
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So what's your solution, Vegano. Poor dominicans in general consider Zona Franca jobs as rubbish. Being a manager, I doubt they would convey this information to you in all honesty.

F.Y.I., not all Zona Franca jobs pay minimum wage. The Call Center Industry, one of the few still expanding in the Free Zones, pays middle-class wages on a Dominican scale.
 

A.Hidalgo

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Apr 28, 2006
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Undoubtedly, Free Zone jobs are no way to become rich, by any means, but at least they puts food on the table of those 'lucky' enough to get one of those 'rubbish jobs'. What would be the alternative?

A dangerous crossing to Puerto Rico. Prostitution. Theft. Murder. Near starvation. Death from simple illnesses that cannot be treated. And so on.

As a manager, I am the first one to realize the nature of their situation and I empathize but cannot do much more than:

- make sure they get paid, in compliance with the Labor laws, completely and on time;
- pay my part of their Pension, Social Security and Labor Risk premiums every month, without fail;
- be as humane as possible and help ease their daily problems by making small interest-free loans and advances.

All these people out on the street and desperately unemployed are a very dangerous situation for the country as a whole. The sooner someone can establish something better than the Free Zone 'rubbish jobs' the better, in the meantime, it's easy to make light comments when it's not you in the shoes of that poorly educated, marginalized Free Zone worker.

I can see you're relatively new here don't let Onions&Carrots get to you. Btw for what its worth your answers were quiet good.
 

CFA123

Silver
May 29, 2004
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Livin' la vida ropa

The lower end jobs may be generally considered 'rubbish' but they beat the alternatives for a lot of people - even lesser paid jobs or unemployment. Unless something has changed in the last couple of years, people line up to get these jobs and those hired show up for work on time day after day - and work hard to keep those jobs. And don't forget in addition to wages, there's usually some medical care, maternity leave, and other benefits.

Then there's also the better paid supervisory, management, IT, and administrative employees who will be out of work.

Then the snowball effect with related suppliers suffering a decrease in sales. Fewer business travellers for restaurants and hotels, not as many truck drivers or port workers will be needed, the vendors who sell to the workers will suffer, etc, etc, etc.

A large country such as the U.S. managed to absorb the loss of apparel manufacturing jobs, but there are still some small towns that remain economically harmed in the U.S. due to those businesses moving offshore. Unfortunately the trend will continue elsewhere as apparel sourcing goes anywhere they must to save a few pennies per unit. First it was from U.S. northeast to U.S. south. Then to CBI countries. Then Mexico got a piece of the action. Now off to Asia.

You can hear the last gasp of any apparel manufacturer when it starts saying "we can beat the lower prices with higher volume, faster turn times, efficiency, and quality". Doesn't work for long. They need to remember they took the production away from companies that thought the same thing.

It's called livin' la vida ropa.

Hopefully some enterprising individuals will figure out how they'll make their first (or next) million and get some of these people back to work.
 
Mar 21, 2002
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I can see you're relatively new here don't let Onions&Carrots get to you. Btw for what its worth your answers were quiet good.

Sir, I am posing a legitimate question to which Vegano answered my question concisely and prudently. I am not always fanning the flames, thank you Vegano.
 
B

batich

Guest
True. With the kind of infrastructure and personal safety that DR has, people visit the country only because it is cheap. With the current skyrocketed retail, hotels and restaurante prices DR is losing its tourist attractiveness very fast. Greed never helps business.

Sad reality.

Win you win bhy price, you will ultimately lose by price. The same is true for the tourist industry, too. When the cost of a trip to the DR nears other locations, fewer tourists will go to the DR.
 
C

Chip00

Guest
Disagree

So what's your solution, Vegano. Poor dominicans in general consider Zona Franca jobs as rubbish. Being a manager, I doubt they would convey this information to you in all honesty.

With all due respect about "Poor dominicans in general consider Zona Franca jobs as rubbish" I've known quite a few "poor dominicans" where I've lived in Moca in el campo and Santiago and they honestly speak about having a job in the Zona as almost a trophy. The "semi" educated middle class are more likely to look down on a Zona Franca job, not the poorest of the poor who don't know where their next meal will come from. What the poorest of the poor don't like to do here is cut platano.
 
C

Chip00

Guest
Senor de La Vega

The Free Zone system in the DR has given employment to nearly 200,000 dominican families in the past and now are down to about half of that figure.
In addition, tens of thousands indirect jobs are created in the transportation and food provision sectors, to say nothing of the energizing of commercial sights anywhere near the Free Zones.

Unfortunately, the unlimited growth of China in recent years, and other Asian countries, has hit the DR Free Zone system extremely hard since our cultural
habits and employee-friendly labor laws place us at great disadvantage against these Asian competitors. If this was not enough, the present government, in its infinite 'wisdom', considers it appropriate to place additional duties and regulations which make us even less competitive.

As a manager of one of those factories I am sad to say that 50% of my 150employees are right now sitting home with little or no possibility of returning to work and those that are here only have assured their jobs through Dec.
22, 4 weeks from now. It's a shame.

Wouldn't you agree that the labor laws are going to have to be substantially modified and energy subsidies granted to the Zona Franca areas in order that this valuable and respected resource isn't lost?
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
40,964
936
113
True. With the kind of infrastructure and personal safety that DR has, people visit the country only because it is cheap. With the current skyrocketed retail, hotels and restaurante prices DR is losing its tourist attractiveness very fast. Greed never helps business.

Sad reality.
Yup.

I recall that the #1 reason I came to the DR back in the 80's was because one of my friends told stories about how cheap everythng was. And it was. I remember staying at El Mirador, a now-defunct AI in the hills overlooking Sosua (which was a fraction of Sosua today), for $32 a day including food and booze.

Times have changed. The significant spike in inflation that plagued the country until not too long ago has hurt the DR economy much more, long term, that most folks realize.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
40,964
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Senor de La Vega



Wouldn't you agree that the labor laws are going to have to be substantially modified and energy subsidies granted to the Zona Franca areas in order that this valuable and respected resource isn't lost?
IMO, that would be just a short-term bandaid. Eventually many Free Zone companies will end up in SE Asia based solely on net costs.

Production always shifts to the low-cost producers because consumers demand it.
 
B

batich

Guest
Now it is cheaper to have vacation, to live , to invest or to retire in Florida than in DR. And with quality of everything beyond any comparison. And with RE prices going further and further down (a condo in Clearwater now is cheaper than in El Neptuno, believe it or not!!)

It is sad as I personally love DR as a place where visitors feel real freedom in many respects.

But we do what economic reality dictates. Now all the economic reasons are against going to DR.

Hopefully with time the situation and prices in DR change and the country again become affordable and reasonable.

I love DR!
 
C

Chip00

Guest
Further clarification

IMO, that would be just a short-term bandaid. Eventually many Free Zone companies will end up in SE Asia based solely on net costs.

Production always shifts to the low-cost producers because consumers demand it.

I agree about costs too. You can't neglect the fuel cost of shipping the goods from SE Asia to the US(assuming that is the DR's main export market). The ave. wage of a Chinese factory worker is less than the DR which will certainly offest the fuel cost. BUT what would happen if the DR changed the labor laws to allow the companies in the Free Trade Zones to have more control? As it stand now talk with foreign investors in this country and they'll have a few "choice" words about the labor laws here.