Description:
Foreign investment has been
widely perceived as a panacea for
developing countries—as a way
to reduce poverty and kick-start
sustainable modern industries.
The Enclave Economy calls this
prescription into question, showing
that Mexico's post-NAFTA experience
of foreign direct investment in its
information technology sector,
particularly in the Guadalajara
region, did not result in the expected
benefits. Charting the rise and fall
of Mexico's "Silicon Valley," the
authors explore issues that resonate
through much of Latin America and
the developing world: the social,
economic, and environmental effects
of market-driven globalization.
In the 1990s, Mexico was a poster
child for globalization, throwing
open its borders to trade and foreign
investment, embracing NAFTA, and
ending the government's role in
strengthening domestic industry.
But The Enclave Economy shows
that although Mexico was initially
successful in attracting multinational
corporations, foreign investments
waned in the absence of active
government support and as China
became increasingly competitive.
Moreover, the authors find that
foreign investment created an
"enclave economy" the benefits of which were confined to an
international sector not connected
to the wider Mexican economy.
In fact, foreign investment put
many local IT firms out of business
and transferred only limited
amounts of environmentally
sound technology. The authors
suggest policies and strategies
that will enable Mexico and other
developing countries to foster
foreign investment for sustainable
development in the future.
