4 ms·

> there's still plenty of places in the world that, on the basis of labour costs, it would be vastly cheaper to operate than in the US. Keep in mind costs aren

> there's still plenty of places in the world that, on the basis of labour costs, it would be vastly cheaper to operate than in the US. Keep in mind costs aren't just what you have to pay people but also things like regional security, the risk of the government nationalizing your company and assets, ability to get skilled/capable/honest people. Basically there has to be a degree of stability, including a centralized government that can provide a certain level of law and order in order to attract capital. Otherwise you have to price in the costs of missing a day of work because the factory is being shelled by government/anti-government groups, etc. Corruption is fine, bribes are fine, because they can be priced in and managed, what can't be managed, planned for and predicted is instability. For the record my bet on where the next big booms will be is Indonesia, Mexico and to a lesser extant west Africa.

tshaddox 3y ago
> Keep in mind costs aren't just what you have to pay people but also things like regional security, the risk of the government nationalizing your company and assets, ability to get skilled/capable/honest people. Also a lot of those same stability/security concerns, but applied to the trip from here to there, likely across the ocean, which is something that people have largely taken for granted for years now other than some stories of Somalian pirates.
wizofaus 3y ago
Mexico stands out to me as a country that hasn't lived up to its potential in that regard. Certainly there's no shortage of potential cheap labour, given the number of refugees making their way across it. And regional security and ability to get hold of necessary skilled workers shouldn't really be an issue, when you have the US right next door. It's hard not to see why it wouldn't be significantly to the US's benefit to ensure Mexico (and other central American countries) can become a global manufacturing hub, so I do wonder what the primary forces working against it might be.
- midoridensha 3y ago
  >so I do wonder what the primary forces working against it might be. Extreme corruption, lack of rule of law, extreme violence to name a few. Mexico is basically a failed state: the government doesn't even control large parts of the territory it claims, ultra-violent drug cartels do. How is that a good place to build factories? Other central American counties are at least as bad. El Salvador has a higher death rate from violence than war-torn Syria during the height of its civil war. Countries farther south would be much better bets, but they still have huge problems with corruption. Brazil, Chile, Peru, etc. aren't nearly as bad, and do have their own manufacturing industries (Brazil is home to Embraer, for instance).
  - Xorakios 3y ago
    Uruguay as well
  - matheusmoreira 3y ago
    > the government doesn't even control large parts of the territory it claims, ultra-violent drug cartels do > Brazil, Chile, Peru, etc. aren't nearly as bad Brazil is just as bad. Drug gangs essentially own their territory. Brazilian state is legitimized by the police's monopoly on force. Gangs don't allow police in their territories which implies the laws of Brazil don't apply there. They have seceded from brazilian territory and established their own parallel government without anyone noticing. It's common knowledge that local businesses operating in those places are doing so with the blessing of these drug lords. They even took on the role of police by punishing small time criminals who interfere with with their drug dealing operations by scaring away customers. They implement barbaric punishments like cutting off the fingers of thieves or shooting their hands. People living in those places may not even get mail because it's too risky to send mailmen in there, I've seen people who had to go to some remote post office to pick up correspondence. It's actually kind of impressive. Shows what a people can do when it has the balls to organize and most importantly to arm itself.
  - wizofaus 3y ago
    Assuming your assessment is accurate (I don't pretend to have any expertise in the matter!) then the question becomes why certain countries/ regions suffer such corruption and lack of rule of law, and more importantly, why is it so hard to fix?

tshaddox 3y ago

> Keep in mind costs aren't just what you have to pay people but also things like regional security, the risk of the government nationalizing your company and assets, ability to get skilled/capable/honest people. Also a lot of those same stability/security concerns, but applied to the trip from here to there, likely across the ocean, which is something that people have largely taken for granted for years now other than some stories of Somalian pirates.

wizofaus 3y ago

Mexico stands out to me as a country that hasn't lived up to its potential in that regard. Certainly there's no shortage of potential cheap labour, given the number of refugees making their way across it. And regional security and ability to get hold of necessary skilled workers shouldn't really be an issue, when you have the US right next door. It's hard not to see why it wouldn't be significantly to the US's benefit to ensure Mexico (and other central American countries) can become a global manufacturing hub, so I do wonder what the primary forces working against it might be.

midoridensha 3y ago
>so I do wonder what the primary forces working against it might be. Extreme corruption, lack of rule of law, extreme violence to name a few. Mexico is basically a failed state: the government doesn't even control large parts of the territory it claims, ultra-violent drug cartels do. How is that a good place to build factories? Other central American counties are at least as bad. El Salvador has a higher death rate from violence than war-torn Syria during the height of its civil war. Countries farther south would be much better bets, but they still have huge problems with corruption. Brazil, Chile, Peru, etc. aren't nearly as bad, and do have their own manufacturing industries (Brazil is home to Embraer, for instance).
- Xorakios 3y ago
  Uruguay as well
- matheusmoreira 3y ago
  > the government doesn't even control large parts of the territory it claims, ultra-violent drug cartels do > Brazil, Chile, Peru, etc. aren't nearly as bad Brazil is just as bad. Drug gangs essentially own their territory. Brazilian state is legitimized by the police's monopoly on force. Gangs don't allow police in their territories which implies the laws of Brazil don't apply there. They have seceded from brazilian territory and established their own parallel government without anyone noticing. It's common knowledge that local businesses operating in those places are doing so with the blessing of these drug lords. They even took on the role of police by punishing small time criminals who interfere with with their drug dealing operations by scaring away customers. They implement barbaric punishments like cutting off the fingers of thieves or shooting their hands. People living in those places may not even get mail because it's too risky to send mailmen in there, I've seen people who had to go to some remote post office to pick up correspondence. It's actually kind of impressive. Shows what a people can do when it has the balls to organize and most importantly to arm itself.
- wizofaus 3y ago
  Assuming your assessment is accurate (I don't pretend to have any expertise in the matter!) then the question becomes why certain countries/ regions suffer such corruption and lack of rule of law, and more importantly, why is it so hard to fix?