Going South: Global Restructuring and Garment Production in Three East Asian Cases

Abstract

Abstract: The textile and garment industries are extremely interesting cases of global economic restructuring. This paper illustrates the factors promoting the shift of apparel production— and other light industries—away from core and semiperipheral regions in the world-economy, illuminates some of the complexities and nuances of that process, and discusses the implications of this for the regional division of labor in East Asia. The story begins in South Korea, where apparel manufacturing, which grew rapidly during the 1970s and 1980s, faces an uncertain future in the 1990s, due to escalating wages and severe labor shortages. This forces Korean garment makers to seek “offshore” production sites. Southeast Asia, along with Central America and the Caribbean, became attractive targets for Korean apparel investment. In the 1980s, Indonesia, with its cheap and abundant labor and a state eager to welcome foreign investment, was a powerful magnet for garmerit capital from Korean and the other Asian NICs. Despite some recent wage pressure and labor unrest, this country—along with China—seems well-positioned to continue as a major global “sourcing” area. More recently, Vietnam, with a nominally Communist regime pushing a policy of “market liberalization” and gradually improving relations with its old enemy the United States, appears poised to become a big player in world apparel production. Garment manufacturers from South Korea and elsewhere have begun to set up factories in Vietnam to take advantage of the country’s large, industrious, and extremely cheap labor force. Dealing with a rapidly changing global apparel production and marketing system presents special challenges to the states, local capital, and workers throughout this region.