Slave Labor in North Korea

Slave labor

To say that North Korea is an oddity would be an understatement. Known as the hermit kingdom, years of cruel and incompetent rule have left North Korea economy in ruin. Closed off from the rest of the world and shrouded in mystery, reliable news report are spotty at best. But a reported famine in the mid-1990s is believed to have killed over 1 million people.

The isolated and sometimes violent country became even more of a pariah nation when it detonated a nuclear weapon in 2006.Subject to international sections and burdened with an antiquated economy and almost no industrial base, the hard line regime was in need of some hard cash. But what could North Korea export in order to earn money? The answer was simple. Her people. Tens of thousands of North Koreans slave away in far off and exotic lands around the world in a multitude of industries.

How does the system work? First, the North Korean government enlists workers for overseas assignments. It then signs bilateral agreements with foreign governments, some of them of questionable character themselves, in such places as Africa, Eastern Europe, the Middle East and Southeast Asia.

Hundreds are believed to be currently working in Mongolia and about 21,000 in Russia Usually the workersˊ salary is paid directly to the local North Korean embassy. What happens to the funds after that is anyone’s guess. And exactly how much one receive for tis life of travel, excitement and adventure? A western mining company was approached by a North Korean intermediary and told that it could be provided with workers for 1.50 per day.

Stories of exploitation abound. In one instance it was found that a group of almost 100 North Korean women were working in a rundown Mongolian factory producing high end goods for such well known UK brands as Edinburgh Woollen Mill (EWM)

Thousands of North Koreans are working as lumber jacks in remote locations in Siberia. It has been reported that the workers get two days off per year and are under constant pressure and threats to meet production quotas.

During the political turmoil in Libya the approximately 200 North Korean workers there (mostly doctors, nurses and construction workers) were ordered to stay put and not to return home, even though a war was waging around them. The reason? The need for the hard currency that they generated was great, but the fear that they would bring home ideas of revolution was even greater.

Invariably the workers come with minders and oversees, to make sure that they stay in line and are productive. Most of the workers have families back home who are in effect hostages, and the threat of retaliation against loved ones can be a great motivator.

So in addition to low wage competition from China it would appear that companies and workers now have a new threat to worry about. No wage competition from North Korea.

Questions

1- What are the possible downsides for a company that chooses to use North Korean labor?

2- What types of industries and governments do you think would be most likely to use North Korean labor?

3- Do you think that North Korea’s exporting of labor is a sustainable proposition? Do you think that it will help them to overcome their internal problems? Explain.

The Answer

Almost all of the nearly 25 million citizens living in the isolated nation of North Korea are traditional Koreans who share a common background, culture, and language. North Korea has generally poor economy system to the extent that there are reports of localized and potentially widespread hunger nearly every year in various parts of the countryside. To gain access to scarce goods or essential services, North Koreans need to pay bribes, forcing them to moonlight to raise cash which in turn sets them up for shakedowns by the police. At the same time, North Korea neither overcame its isolation due to its nuclear weapons and hostile geostrategic posture nor reformed its economy.

Government systematically uses forced labor from ordinary citizens to control its people and sustain its economy. A significant majority of North Koreans must perform unpaid labor at some point in their lives. The economically isolated government depends on remittance revenue to maintain power over its citizens and to continue investing in its nuclear weapons program. Some estimates suggest that its nuclear program costs more than $1 billion, likely funded heavily by overseas laborers. North Korea sends an estimated 60,000 to 70,000 workers abroad to earn hard currency and ease unemployment. According to a business analyst, “sending groups of people to foreign countries where they don’t speak the language and can be sequestered in barracks or factory dorms is a much safer option than granting to foreign investors in North Korea the kind of freedom and mobility they demand”. Men take up logging work in Siberia and do construction jobs in the Middle East. In 2012, China took the unprecedented step of offering work visas to 40,000 unskilled North Korean laborers.

One of the possible downsides for a company that chooses to use North Korean labor is that the countries hosting North Korean workers may be breaching UN sanctions. The North Korean workers, who are sent abroad primarily to earn foreign currency for the isolated nation, play an important part in the regime’s attempts to avoid international sanctions, which were put in place in response to its nuclear tests. North Korea needs the hard currency to fund its nuclear weapons development program so it export its people