Outsourcing work to upcoming economies like China and India is not as cheap as it used to be. So sending work to North Korea, where labour costs are extremely low, could provide a solution. But is it ethical to do business with a dictatorship which ignores human rights?
Rotterdam consultant Paul Tjia puts Dutch companies in contact with businesses in North Korea. Often it is skilled labour that is required – for instance for software development, but workers in the communist country are also used for manufacturing clothing. So which companies do business with North Korea? All Mr Tjia will say is that South Korean Samsung has its mobile telephone software developed by its northern neighbour and that some credit card companies have their administration done there.
Dutch companies which do business with North Korea prefer to remain anonymous. In 2008, Dutch daily de Volkskrant found that firms were not keen on discussing their links with the dictatorship. Mr Tjia thinks there’s a risk of damaging their image because North Korea is a controversial trading partner.
Trade missions
He thinks North Koreans benefit from foreign business:
“The more contact the country has with the outside world, also in economic terms, the better it is for the people. At the moment they are very isolated; they do not know what is going on in the world. They have little contact with foreigners. In situations like this I think business contacts are very important.”
That’s why he cannot understand why Amsterdam’s Chamber of Commerce has withdrawn from trade missions to the country. He thinks it is the wrong political decision.
Political freedom
The consultant compares North Korea to China in the 1970s. Back then that country was very isolated.
“But then it started trading with foreign customers more and more. Foreign investment began to come in. There was much more contact than before. Twenty to thirty years later you can see the effect: huge economic development. There’s more political freedom than 30 years ago, although there is still a lot to be done,” says Mr Tjia.
Isolation
Human Rights organisation Amnesty International says it is not ethical to do business with a government which regularly violates human rights. Spokesperson Nicole Sprokel:
“People often think, if we just improve employment and arrange exchanges, human rights and political rights will follow suit. We don’t believe that automatically happens. It is not something that comes about as a consequence of economic development.”
Mr Tjia disagrees. Mainly because trade brings North Koreans into contact with foreigners and therefore breaks their isolation. Sometimes employees have to travel abroad for training or to meet foreign customers.
Minimum wage
But Ms Sprokel believes that the rights of employees working for companies that take Dutch orders are not properly protected. There is an official minimum wage in North Korea, but it is not clear whether companies actually adhere to it. Ms Sprokel says people cannot live on the minimum wage anyway.
There is no possibility to fight low wages because unions are banned in the communist country. Anyone who criticises the regime can be thrown into prison says Amnesty.
Companies should not just look at the finances when they outsource work. They should also consider whether the working conditions meet international standards, says Ms Sprokel. Something that is difficult to check in a country like North Korea. In the worst cases, outsourced work is done in forced labour camps.
Technological progress
Whether or not outsourcing work to North Korea is ethical, it is definitely better for technological progress, the Taipei Times reports. Mr Tjia agrees. He points out that the IT sector is very popular with lots of young people wanting to study it. And there is work in this sector from foreign companies. Apparently young North Koreans are particularly good at internet security.
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It's a bit pathetic that well-meaning people in mid-year 2011 reference their perspectives on events leading up to the beginning of 2010. Since then, a great deal has happened. NoKo Jeans has just about disappeared. S Korea has essentially lost its investment in Kumkang. And so on....
Even the sanguine notions that FDI in the DPRK will act as some kind of panacea that will lead to a greater economic stability and thereby an opening up of the country are questionable. We should also keep in mind that the down fall of Park Chung-hee was caused by the creation of a middle class that clamored for greater political freedom. In other words, greater economic stability may foment domestic political instability.
The Chinese and the Vietnamese have so far pulled off the trick of economic development without upsetting their political regimes. And North Korea could conceivably be another case. But Pyongyang has built up a more encompassing, air-tight ideology than what was possible in massive China and much more traumatized Vietnam. As such, traumatic pricks of new information accompanying foreign investment that will expose the Big Lie that the North Korean population have accepted or tolerated could unleash major cascades of unrest.
Admittedly, today no one knows if North Korea could possibly follow Vietnam's example or would there be the tumbling of a political house of cards. But those who have the most at risk are probably not willing to let matters potentially get out of hand. Consequently, there is likely to be massive "safeguards" placed around FDI to prevent "contamination" In other words, I remain skeptical if adequate amounts of FDI will be effectively possible. And even if major FDI may be attracted, I question if the Pyongyang rulers will have the confidence to allow inevitable change to take place.
They(the corporations) cannot commit treason, nor be outlawed,nor excommunicated, for they have no souls nor any heart.
My view is that when you add the human rights factor in as a lens through which all business and commerce must be viewed, you then find yourself in the peculiar position of losing on three critical counts: (1) having drastically narrowed your available market; (2) reducing your opportunities to assist those in the country or market where help is needed the most--like North Korea; and, (3) blocking your ability over time to influence the offending government and abate the abuses in question.
Regime stability, the rollback of human rights abuses, and the avoidance of an even more massive humanitarian crisis in the DPRK can never occur simply by folding one's arms and saying, "No business where there are human rights violations"--that is a policy invitation to disaster. And the humanitarian disaster North Korea faces is of an incomprehensible magnitude. (For more on the potential humanitarian crisis, see the discussion on this television show here: http://davidfday.com/2011/03/confrontation-in-the-koreasthe-private-sect... )
Paul Tjia's work in developing the private sector in North Korea is the foundation for peace and stability in that troubled country as well as in Northeast Asia. I for one, take my hat off to him, and encourage others to join him. He is building North Korea's future and doing something that governments cannot--developing the private sector.
The economic miracle in China became possible only after 1979, when Beijing was diplomatically recognised by Washington D.C. All economic sanctions against China were also removed then. There are no diplomatic relations between the DPRK and US. Until now Microsoft products may not be exported to Cuba, Iran, North Korea, Sudan, or Syria.
The question should be: is outsourcing jobs ethical? Look at the US and all the jobs that have gone to China. Chinese are working, Americans aren't.
Vera, the New-World Oder calls it redistribution of wealth. American and European companies have fled to places like India and China because they don't have to pay the high wages. The problem is we voted in the scroundals and those scoundrals betrayed their country by selling out to those companies. All products coming into the U.S. and Europe from places like India, China, need to be taxed at a very high tax rate. We can not compete against nations that allow companies to pay workers 15 cents and hour; therefore, they need to make those companies pay very high taxes. Forcing those companies to pay more opens the doors to companies to start businesses at home. It is not just Americans!
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