Tuesday, March 11, 2008

Migrating capitalism

The Malaysian textile company Ramatex came to Namibia in 2001. The N$1 billion project (about US$127 million) was the first large-scale industrialization investment in the country. It decided to close down its operations -- a move that will destroy 3,000 jobs. The company had been provided with an incentive package that included subsidized water and electricity and a 99-year lease exemption for the 65-hectare site. The government provided the site with electricity and sewerage infrastructure to the tune of N$100 million (almost US$13 million). It was exempt from corporate tax, import duties on imported inputs, value added tax (currently at 15 percent), and transfer duties. It was permitted to repatriate their capital and profits while enjoying freedom from exchange controls. It could hold foreign currency accounts at local banks.

Ramatex arrived in Namibia to benefit from the United States' Africa Growth and Opportunity Act (AGOA). AGOA provides preferential access to certain imports, such as clothing and textiles, from developing countries in Africa. Namibia started the Export Processing Zones (EPZ) in 1996 with wide-ranging incentives to create an accommodating and profitable environment for manufacturers exporting to markets outside the Southern African Customs Union. The state-owned Offshore Development Company (ODC) promotes and markets Namibia's EPZ to facilitate export-led industrialization.

Five years ago, the workforce stood at nearly 8,000. In 2005, a subsidiary shop called Rhino garments closed down. Ramatex's cotton spinning and ginning plant closed shortly afterwards and the workforce shrunk to 3,000. The company's products were mainly exported to the USA, but its production and sales volumes were never made public resulting in persistent questions about the company's claim that it was making a loss . Now it is to close down completely with the loss of those remaining jobs . The non-suspecting workers, mostly young women, found the main gate to the textile company, which is situated on the outskirts of Windhoek closed when they reported for duty. Instead of clocking in, the workers were greeted by a heavy presence of security forces, which included members of the Special Field Force, City Police, Namibian Police officials and traffic officials who had cordoned off the area . The Namibian Police feared that the angry workers might vandalise the property and steal some of the materials and sewing machines belonging to the company. The police were also concerned that if they allowed the workers in, it would be very difficult to remove them from the premises afterwards. After long hours of negotiations, the workers were allowed to collect their personal belongings in small groups that the Namibian Police could easily control.
The Namibian Labour Commissioner told workers that he would ensure that Filipino and other Asian workers would also receive just payment and treatment during negotiations. In the past, Asian workers at the company have allegedly been quietly deported when labour issues between them and the company became a problem.

Prime Minister Nahas Angula said Ramatex has acted in bad faith because it had earlier agreed with the Government that it would give one year's notice before closing down but instead only gave a month's notice. "They cannot just wake up in the morning and say they are leaving." he said

According to researcher Herbert Jauch of Namibia's non-governmental Labour Resource and Research Institute (LaRRi), ordinary workers usually lose out as transnational companies make use of EPZ regimes in countries for a short while, only to quickly disappear again to the next.
''Transnational corporations like Ramatex are highly mobile and exploit the opportunities created by neoliberal globalization,'' Jauch wrote in a recent study called ''The Textile and Clothing Industry in Sub-Saharan Africa.'' ''There is a need to tackle such companies by questioning the neoliberal global order and by creating mechanisms of democratic control that will ensure an end to exploitative practices and the free reign of capital,'' Jauch stated in the publication.

Over and over again , workers learn the hard lesson that businesses exists to accumulate capital and will forever seek fresh pastures and new exploitation .

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