Sweatshops and Foreign Investment

by Yukari Deguchi

Economic gap is the defect of capitalism. Thanks to its benefit, certain companies have grown up, the rich became much richer, and the poor became much poorer. That’s why there are many sweatshops. In free market, some big companies pursue cheap labor force to reduce the cost. The famous fashion brand GAP is one of the examples of such companies. GAP doesn’t have any own factories. All products are made by subcontracted factories in developing countries, which have many cheap labor forces, and loose labor regulation. The majority of these workers are young women and children from poor households because they weren’t educated and they have little sense of human right. When the fact of exploitation was exposed by NGOs in 1990th, GAP canceled the contracts with such factories.

The victim of exploitation is not only human, but also animal. The world’s famous McDonald’s industrialize the food and animals to reduce cost and to pursue the quantity and speed. MacDonald’s modify the genes of chicken to grow up bigger and faster. The chickens are reared by confined to so narrow cages with many others. Farmers who contract with these fast food companies have to purchase new expensive machine to obey the companies’ command. So the farmers carry a huge debt loan. The exploitation can be seen easily in everywhere in supply chain.

Thanks to the NGOs and civilian resistance, these big companies cancel the contracts with the factories to eliminate exploitation. But when the factories fold up, where will the workers go next? Who will employ them? How they live? It’s not the solution to cancel contract to protect the companies brand. We can easily imagine what will happen to the workers; they will be employed in other sweatshops.

Why did they choose such works? Why the companies can get cheap labor force? The answer is that the workers have no choice to live because of many various kind of gap. So that would be pointless to criticize only the factories and companies. It’s not the only simple problem about human rights.

Then, we have to face to a question; what’s the difference between sweatshops and foreign investment? Why are there sweatshops while other developing countries get benefits of foreign investment? I’d like to explain this question with the information from other classes.

Do you know Great Mekong Subregion (GMS) Project by the Asia Development Bank? It is one of the biggest economic blocks and includes six countries around the Mekong river; Thailand, Cambodia, Laos, Burma, Vietnam, and China. To make logistics more efficiency and to promote free trade, the big economic highways were built and the countries are trying to achieve the elimination of tariffs through AFTA (Asia Free Trade Association). There are many business chances in GMS, and companies and business persons all over the world pay attention to it. Some big companies have already expanded into it, and these businesses are not exploitation, of course.

So what is the difference between these countries and those which have sweatshops? I think these successful countries are now playing a part of world free market as good partners of big companies and countries. So companies can’t ignore their voice. On the other hand, areas and countries which have sweatshops―such as poor African countries, Latino countries, and some less-developed countries in Asia―are usually excluded from world free market.

The cause of sweatshops is in the structure of world economy. It’s deep and difficult problem to solve. But what we, the consumer, should do is to know the process of making and carrying the products, I think.



Food, Inc. American Vista, 2008


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s