Untitled Document

September 24, 2000

New York Times Magazine

Two Cheers for Sweatshops

They're dirty and dangerous. They're also a major reason Asia is back on track.

By NICHOLAS D. KRISTOF AND SHERYL WUDUNN

First Chapter of "Thunder From the East," by Nicholas D. Kristof and Sheryl WuDunn

It was breakfast
time, and the food
stand in the village
in northeastern
Thailand was
crowded. Maesubin
Sisoipha, the
middle-aged woman
cooking the food, was
friendly, her portions
large and the price
right. For the
equivalent of about 5
cents, she offered a
huge green mango
leaf filled with rice,
fish paste and fried beetles. It was a hearty breakfast, if one didn't mind
the odd antenna left sticking in one's teeth.

One of the half-dozen men and women sitting on a bench eating was a
sinewy, bare-chested laborer in his late 30's named Mongkol Latlakorn. It
was a hot, lazy day, and so we started chatting idly about the food and,
eventually, our families. Mongkol mentioned that his daughter, Darin, was
15, and his voice softened as he spoke of her. She was beautiful and smart,
and her father's hopes rested on her.

"Is she in school?" we asked.

"Oh, no," Mongkol said, his eyes sparkling with amusement. "She's working
in a factory in Bangkok. She's making clothing for export to America." He
explained that she was paid $2 a day for a nine-hour shift, six days a week.

"It's dangerous work," Mongkol added.
"Twice the needles went right through her
hands. But the managers bandaged up her
hands, and both times she got better again
and went back to work."

"How terrible," we murmured
sympathetically.

Mongkol looked up, puzzled. "It's good pay,"
he said. "I hope she can keep that job. There's all this talk about factories
closing now, and she said there are rumors that her factory might close. I
hope that doesn't happen. I don't know what she would do then."

He was not, of course, indifferent to his daughter's suffering; he simply had
a different perspective from ours -- not only when it came to food but also
when it came to what constituted desirable work.

Nothing captures the difference in mind-set between East and West more
than attitudes toward sweatshops. Nike and other American companies
have been hammered in the Western press over the last decade for
producing shoes, toys and other products in grim little factories with dismal
conditions. Protests against sweatshops and the dark forces of globalization
that they seem to represent have become common at meetings of the
World Bank and the World Trade Organization and, this month, at a World
Economic Forum in Australia, livening up the scene for Olympic athletes
arriving for the competition. Yet sweatshops that seem brutal from the
vantage point of an American sitting in his living room can appear
tantalizing to a Thai laborer getting by on beetles.

Fourteen years ago, we moved to Asia and
began reporting there. Like most
Westerners, we arrived in the region
outraged at sweatshops. In time, though,
we came to accept the view supported by
most Asians: that the campaign against
sweatshops risks harming the very people it
is intended to help. For beneath their grime,
sweatshops are a clear sign of the industrial
revolution that is beginning to reshape Asia.

This is not to praise sweatshops. Some
managers are brutal in the way they house
workers in firetraps, expose children to
dangerous chemicals, deny bathroom
breaks, demand sexual favors, force people
to work double shifts or dismiss anyone
who tries to organize a union. Agitation for improved safety conditions can
be helpful, just as it was in 19th-century Europe. But Asian workers would
be aghast at the idea of American consumers boycotting certain toys or
clothing in protest. The simplest way to help the poorest Asians would be
to buy more from sweatshops, not less.

In our first extended trip to China, in 1987, we traveled to the Pearl
River delta in the south of the country. There we visited several
factories, including one in the boomtown of Dongguan, where about
100 female workers sat at workbenches stitching together bits of leather to
make purses for a Hong Kong company. We chatted with several women
as their fingers flew over their work and asked about their hours.

"I start at about 6:30, after breakfast, and go until about 7 p.m.," explained
one shy teenage girl. "We break for lunch, and I take half an hour off
then."

"You do this six days a week?"

"Oh, no. Every day."

"Seven days a week?"

"Yes." She laughed at our surprise. "But then I take a week or two off at
Chinese New Year to go back to my village."

The others we talked to all seemed to regard it as a plus that the factory
allowed them to work long hours. Indeed, some had sought out this factory
precisely because it offered them the chance to earn more.

"It's actually pretty annoying how hard they want to work," said the factory
manager, a Hong Kong man. "It means we have to worry about security
and have a supervisor around almost constantly."

It sounded pretty dreadful, and it was. We and other journalists wrote
about the problems of child labor and oppressive conditions in both China
and South Korea. But, looking back, our worries were excessive. Those
sweatshops tended to generate the wealth to solve the problems they
created. If Americans had reacted to the horror stories in the 1980's by
curbing imports of those sweatshop products, then neither southern China
nor South Korea would have registered as much progress as they have
today.

The truth is, those grim factories in Dongguan and the rest of southern
China contributed to a remarkable explosion of wealth. In the years since
our first conversations there, we've returned many times to Dongguan and
the surrounding towns and seen the transformation. Wages have risen
from about $50 a month to $250 a month or more today. Factory conditions
have improved as businesses have scrambled to attract and keep the best
laborers. A private housing market has emerged, and video arcades and
computer schools have opened to cater to workers with rising incomes. A
hint of a middle class has appeared -- as has China's closest thing to a
Western-style independent newspaper, Southern Weekend.

Partly because of these tens of thousands of sweatshops, China's economy
has become one of the hottest in the world. Indeed, if China's 30 provinces
were counted as individual countries, then the 20 fastest-
growing countries in the world between 1978 and 1995 would all have been
Chinese. When Britain launched the Industrial Revolution in the late 18th
century, it took 58 years for per capita output to double. In China, per
capita output has been doubling every 10 years.

In fact, the most vibrant parts of Asia are nearly all in what might be called
the Sweatshop Belt, from China and South Korea to Malaysia, Indonesia
and even Bangladesh and India. Today these sweatshop countries control
about one-quarter of the global economy. As the industrial revolution
spreads through China and India, there are good reasons to think that Asia
will continue to pick up speed. Some World Bank forecasts show Asia's
share of global gross domestic product rising to 55 to 60 percent by about
2025 -- roughly the West's share at its peak half a century ago. The
sweatshops have helped lay the groundwork for a historic economic
realignment that is putting Asia back on its feet. Countries are rebounding
from the economic crisis of 1997-98 and the sweatshops -- seen by
Westerners as evidence of moribund economies -- actually reflect an
industrial revolution that is raising living standards in the East.

Of course, it may sound silly to say that sweatshops offer a route to
prosperity, when wages in the poorest countries are sometimes less
than $1 a day. Still, for an impoverished Indonesian or Bangladeshi
woman with a handful of kids who would otherwise drop out of school and
risk dying of mundane diseases like diarrhea, $1 or $2 a day can be a
life-transforming wage.

This was made abundantly clear in Cambodia, when we met a 40-year-old
woman named Nhem Yen, who told us why she moved to an area with
particularly lethal malaria. "We needed to eat," she said. "And here there is
wood, so we thought we could cut it and sell it."

But then Nhem Yen's daughter and son-in-law both died of malaria,
leaving her with two grandchildren and five children of her own. With just
one mosquito net, she had to choose which children would sleep protected
and which would sleep exposed.

In Cambodia, a large mosquito net costs $5. If there had been a sweatshop
in the area, however harsh or dangerous, Nhem Yen would have leapt at
the chance to work in it, to earn enough to buy a net big enough to cover
all her children.

For all the misery they can engender, sweatshops at least offer a
precarious escape from the poverty that is the developing world's greatest
problem. Over the past 50 years, countries like India resisted foreign
exploitation, while countries that started at a similar economic level -- like
Taiwan and South Korea -- accepted sweatshops as the price of
development. Today there can be no doubt about which approach worked
better. Taiwan and South Korea are modern countries with low rates of
infant mortality and high levels of education; in contrast, every year 3.1
million Indian children die before the age of 5, mostly from diseases of
poverty like diarrhea.

The effect of American pressure on sweatshops is complicated. While it
clearly improves conditions at factories that produce branded merchandise
for companies like Nike, it also raises labor costs across the board. That
encourages less well established companies to mechanize and to reduce
the number of employees needed. The upshot is to help people who
currently have jobs in Nike plants but to risk jobs for others. The only thing
a country like Cambodia has to offer is terribly cheap wages; if companies
are scolded for paying those wages, they will shift their manufacturing to
marginally richer areas like Malaysia or Mexico.

Sweatshop monitors do have a useful role. They can compel factories to
improve safety. They can also call attention to the impact of sweatshops
on the environment. The greatest downside of industrialization is not
exploitation of workers but toxic air and water. In Asia each year, three
million people die from the effects of pollution. The factories springing up
throughout the region are far more likely to kill people through the
chemicals they expel than through terrible working conditions.

By focusing on these issues, by working closely with organizations and
news media in foreign countries, sweatshops can be improved. But
refusing to buy sweatshop products risks making Americans feel good
while harming those we are trying to help. As a Chinese proverb goes,
"First comes the bitterness, then there is sweetness and wealth and honor
for 10,000 years."

EXCERPT

Chapter One

He must have been a raffishly handsome young man,
with his bushy eyebrows, large coal-black eyes,
high-cheekboned face, and thick mop of black hair
dangling over his ears. He looked pale but improbably
serene, showing no sign of the torture he had endured,
and those eyes were still wide open and frozen in a final instant of surprise.
He had a strong, projecting chin, but his head ended a few inches below that
chin in a jagged eruption of blood, tissue, and bone. His head had been
hacked off with a machete and was impaled on a bamboo stake, and he
seemed to be staring at me.

I stared back. That abrupt transition from human flesh to bamboo stake
wrenched my gut and paralyzed my legs. I was scared stiff. The mob that
had killed him was in front of me now, the killers waving machetes and
screaming Allahu akbar, God is great. There were about two dozen of
them, mostly men in their twenties and thirties, all riding motorcycles slowly
down the main street of the little farmtown of Turen, Indonesia.

It was a typical warm afternoon in what seemed a bucolic, prospering
community. A tropical drizzle had created a shine on the beautifully paved
blacktop road, but there were plenty of trees to shield people from the rain.
Comfortable one- and two-story homes lined the road, their walls neatly
whitewashed, their roofs made up of pleasant red tile. A few repair shops
and small restaurants competed for business, and a billboard advertised "Sun
Silk Shampoo" with an image of a young woman with thick, beautiful, black
hair. A few bicycle rickshaws were waiting for rides and several pushcart
vendors were selling fried rice and noodles. Townspeople were emerging by
the side of the road to see what was causing the racket.

It seemed like any of Indonesia's tens of thousands of little villages, except
that it had abruptly tumbled into savagery. Some motorcyclists were waving
S-shaped machetes, two feet long and bloody, while others wielded sickles
that were equally grisly. A few were clenching their fists in power salutes of
victory, and they were all grinning happily, cheering and shouting, while the
fast-forming crowd on the sidewalk waved back and roared its approval. In
the middle of the cluster of motorcycles was a glossy black one, and its driver
smiled proudly at the responsibility he had been given. Behind him on the
same motorcycle was a long-haired younger man, perhaps twenty years old,
his black shirt unbuttoned to the waist, his face gleaming with excitement.
Black Shirt was standing up on the footrests, holding on to the driver's
shoulder with his left hand, and with his right he was holding up the bamboo
stake. Exultantly, he waved it all around, as if he were exhibiting a doll's head
on a handle, so that everyone could admire it. Black Shirt was small and
skinny, shining with his eagerness to please, and he looked less like a killer
than like a proud high-school kid in the center of a homecoming parade.

I was standing under a tree to keep out of the drizzle, and the motorcyclists
did not see me at first. But now the cries faded as the mob became aware of
the presence of a foreigner. Black Shirt frowned, switched hands and thrust
the severed head toward me, he too shouting Allahu akbar. The head was
raised high, and my eyes locked on the bloody tissue, jagged and ragged,
where the neck ended.

Instinctively, I transferred my notebook to my left hand and reached up with
my right to feel my own neck. I massaged it absentmindedly with trembling
fingers, appreciating its continuity and imagining a motorcyclist's machete
arcing down on it and parting the skin.

. . .

I had come to Java not in search of a beheading but to understand the
upheavals in rural Indonesia caused by the economic crisis in Asia. The crisis
had begun in Thailand in July 1997 and then had devastated once-booming
economies throughout the region, leaving Indonesia worst hit of all. I was
staying in a town in East Java called Mojokerto, where I met Salamet, a
twenty-seven-year-old rickshaw driver. Salamet was a gentle man with a
round face, a drooping moustache, and a pleasing smile. Years of work as a
rickshaw driver, rock-crusher, and gravel-hauler had left him as strong as an
ox, and with roughly the same build. He was of only average height, but he
had a barrel chest and a boxer's neck, and he might have looked intimidating
if he hadn't spent so much time gently cradling his youngest daughter. He
would sit back in his rickshaw, his bare feet dangling out over the footrest,
rocking the girl on his knee and griping about the rising price of food.

The neighborhood seemed as placid as the nearby river running through the
town, but Salamet had been telling me that tensions were mounting. One day
when he was eating a bowl of noodles, he told me between loud slurps that
one bad sign was the rise of sorcery. "Sorcerers are taking advantage of the
confusion these days," he warned. Slurp. "There didn't used to be much black
magic around, but now it's beginning again." Slurp.

Salamet referred to a series of two hundred gruesome murders in East Java,
mostly of Muslim leaders whose bodies were chopped into pieces that were
left hanging in the trees. I believed that some army unit was behind the
killings, trying to create political instability or even conditions for a coup d'état,
but to Salamet and most people in Mojokerto the obvious suspects were
sorcerers. Javanese have always believed in black magic and sorcery, and
rumors were spreading that the killers wore black and could vanish into thin
air. "Those killings -- that's the work of sorcerers," Salamet told me
confidently. Slurp.

In nearby towns angry mobs began to kill suspected witches and sorcerers.
And even in Mojokerto vigilante groups were organized to fight against the
sorcerers, whom people called "ninja" after the Japanese warriors. Salamet
joined one of these vigilante groups, and the men in it spent their days
sharpening their knives and their nights roaming around looking for sorcerers
to kill. They were good family men, and I went with some of them to a
meeting at the local mosque where a charismatic man named Ahmed Banu
was urging the crowd to butcher the sorcerers. Banu and the others greeted
me warmly, made sure I was seated comfortably, and then got down to
business.

"If we Muslims are being treated like animals, will we stand for it?" Banu
asked, his voice rising to a crescendo.

"No!" his followers yelled back.

"If we catch the ninja, what should we do? Give them to the police or kill
them?"

"Kill them!"

"So send this message to your families," Banu added grimly: "When we catch
the attackers, we must kill them."

That night, I tossed and turned. Would these villagers, who had been so
hospitable to me, actually attack people they suspected to be sorcerers? I
wondered whether I had lent credibility to Banu by attending the meeting,
increasing the chance that he and his friends would butcher strangers. Finally,
I decided that it was all talk and fell into a comfortable slumber. But in the
morning, my interpreter brought a local newspaper and I learned that at
roughly the same time that Banu was holding his meeting, mobs a bit farther
to the south had been tearing apart five men who lacked identification and
were consequently suspected of being sorcerers. Two were burned alive and
three were beheaded, their heads impaled on pikes and paraded through the
nearby towns.

"Where did that happen?" I asked.

"In a little town called Turen," replied my interpreter, a local journalist. As I
looked at the articles, I felt revulsion and fear, but in the mix there was also a
large dose of curiosity. What kind of people could commit such grotesque
acts? How could citizens behead their neighbors? The killings struck me as a
modern version of the seventeenth-century Salem witch trials. If there were
any sorcery in Indonesia, I mused, it was the economic and social alchemy
that left people running around in mobs carrying human heads on pikes. The
despair and social disintegration that accompanied the crisis seemed to leave
Indonesians particularly inclined to supernatural explanations, particularly
vulnerable to manipulation by secret army units, and particularly likely to
respond with mob violence to each new threat that appeared to disrupt their
lives.

"Let's go," I suggested. "Let's try to find some of the people who did it and
talk to them."

It was an odd drive. In journalism you occasionally find yourself careering the
wrong way on a one-way street, heading in precisely the direction that you
know quite confidently you should be fleeing from. I was tense with
apprehension but also soothed by the vivid green countryside we were driving
through. It seemed impossible to reconcile the macabre news accounts with a
landscape that was tranquil and lovely that morning: paddies sprouting rich
green rice plants, dark green forested hills in the distance, occasional coconut
plantations with endless rows of palms.

This was the first time in ten years that I had been in this part of East Java,
and the economic development over the intervening decade was dazzling.
The previous time I had bounced over rutted gravel roads in creaky old buses
filled with exhaust smoke. Once a bus had simply let me off on a remote
hillside where the road had washed out, and I had been forced to spend the
night in a peasant's house, cadging bananas for dinner. Now, just ten years
later, I was hurtling along a road that was sleek, paved, and straight, and
modern cars and trucks were gliding by clean restaurants and stores. I was
traveling on a modern highway to meet mobs that paraded heads on pikes.

When Dante set forth into the Inferno, he was battered by the "sighs,
lamentations, and loud wailings resounding through the starless air." I was
encountering my own netherworld, with its own wails and laments and cries
for help. Since the economic crisis had spread economic and social
convulsions through the region, Asia and especially Indonesia had been
transformed into something that in its bleakest hours resembled Dante's ninth
ring of hell.

As we approached Turen, traffic thinned out and virtually disappeared. We
stopped at a regional police station to ask if it was safe, and a senior officer
-- a tall, stout man with a crisp uniform -- assured us pompously that the day
had been calm so far. We asked if it might be possible to take a policeman in
the car with us for safety's sake, and he frowned.

"No, I'm afraid not," he said. "All the police officers are staying inside the
compound here."

"Why?"

He hesitated for a moment, deflated, and then said: "They think it's too
dangerous to go out in the streets." . . .

As I nervously probed my neck for reassurance, what rocked me was a
sense of utter sadness and confusion. This was Java, a gloriously cultured
land that had been civilized before Britain and whose people are renowned
for their kindness and restraint. This was a nation that the World Bank had
hailed as a model for the developing world. But now the Asian economic
crisis had contorted it into an example of Asia at its very worst. Suddenly,
theParadiso of Asia had become the Inferno.

Two conclusions might seem obvious from these economic and social
upheavals: First, the Asian economic crisis was a catastrophe of historic
proportions. Second, the Pacific Century is over before it began. Asia may
hobble back eventually, but when people start running around hacking off
each other's heads, they are not on the brink of a middle-class or an industrial
revolution.

Yet those are, we think, precisely the wrong conclusions. As Zhao Yi, a
Chinese poet, wrote two hundred years ago: I>gai guan lun ting. It means
roughly: "You cannot rightly judge a person until his coffin lid is sealed." And
although during the crisis Asia was widely measured for its coffin -- and
sometimes seemed to stretch out inside -- it is far too soon to seal the lid. On
the contrary, instead of suggesting that the crisis was a catastrophe or that
the Pacific Century is over, we will over the course of this book make two
very different arguments.

First, the Asian economic crisis was the best thing that could have
happened to Asia. It entailed a terrible human cost, but it is also helping to
destroy much of the cronyism, protectionism, and government regulation that
had burdened Asian business. The crisis helped launch a political, social, and
economic revolution that is still incomplete but that ultimately will reshape
Asia as greatly as the fall of the Berlin Wall reshaped Europe.

This revolution is essential because for all the praise lavished on the Asian
business culture, up close it never looked nearly so impressive. Sometimes it
looked downright idiotic. I talked to Japanese bankers about their practice of
spending thousands of dollars taking their Finance Ministry bank regulators
out to $500-a-person expense-account dinners at no-pan-shabu-shabu
restaurants in Tokyo's Kabukicho red-light district. The attraction of these
restaurants is not the shabu-shabu, the thinly sliced beef that is dipped into a
hot pot in front of the customer. Rather the appeal is the waitresses in short
skirts and "no pan" (no panties). The restaurants keep water and sake high
up, so that the waitresses have to stretch to reach them. One of these
no-pan-shabu-shabu restaurants, seeking to ensure that customers could
appreciate its "special amenities," even put mirrors on the floors. "And if you
pay a tip," one official confided, "then the girl will climb on the table and lift
her skirt."

Imagine the intellectual level of the discussion at these dinners. Imagine the
caliber of Japan's bank regulation.

The Asian economic crisis forced a greater reliance on markets, democracy,
and the rule of law. One result is that Tokyo no longer has any
no-pan-shabu-shaburestaurants. The crisis also meant that Asian countries
finally got first-class financial institutions -- often American ones -- to
underwrite the industrial revolution and cultivate deep capital markets. Just as
Britain's economic near-collapse in 1976 and subsequent bailout by the
International Monetary Fund laid the groundwork for its renaissance over the
next two decades, Asia's upheavals will gradually help clear out the dead
wood and reinvigorate the region.

The second conclusion is broader: Partly because of this forced restructuring,
Asia is likely to wrench economic, diplomatic, and military power from
the West over the coming decades. The "center of the world," to the extent
that there is one, has migrated repeatedly over the years. It was China for
most of the first millennium b.c., then Rome during the Roman Empire, then
China again for well over one thousand years, then Spain in the sixteenth
century, then England, and finally America since the late nineteenth century.
Now the center of the world may be slowly shifting again, and eventually it
will settle in Asia.

The United States is incomparably ahead of Asia in information systems,
business management, financial services, and entertainment industries, plus it
has the advantage of operating in the international language. But the United
States's share of the world's gross domestic product (GDP) peaked in the
aftermath of World War II, at about 32 percent. Now America's share of
global GDP has fallen to 25 percent, and it is continuing to fall despite the
vigor of the American economy in recent years.

This is natural. Poor countries can enjoy "catch-up" growth rates of 5 to 10
percent per year, while mature nations seem unable to average much more
than 3 percent. The upshot is that just about every forecast -- by the World
Bank, by the Asian Development Bank, and by private economists -- shows
that the East will gain considerably in its share of the global economy in the
coming decades. The World Bank's forecasts show Asia's share of global
GDP rising from 19 percent in 1950 to 33 percent in 1992, to 55 to 60 percent
by 2025. In that year, Asia will still lag behind the West in technology, nuclear
weaponry, and per capita incomes, but it will have approximately the same
share of global income that the West had at its peak in the 1950s.

This shift of power to Asia is in large part a function of population: Just as the
city-state of Venice could not compete with the nation of Spain, and England
could not muster the power of a continental nation like America, so it will be
difficult for the United States to hold its own indefinitely against the rise of
countries in Asia. Sixty percent of the world's people live in Asia, and the
proportion will probably reach two-thirds by the middle of this century. In
contrast, 5 percent of the world's people live in North America, mostly in the
United States.