I think the real problem is that this is exploitation only if you think the coir-mat makers were either coerced or unwillingly go about their business.

Recall that if you are an Indian coir-mat maker, you probably have one major alternative to making coir mats: subsistence farming. Coir-mat makers sit in their houses making mats because it pays better than any other easily accessible work.

There's a meta-question about why the shady middleman gets so much of the profit, but there's usually an economic answer. The simple one might be that unlike your average coir mat weaver, he knows enough English and enough math to negotiate a deal. Middlemen are not per se evil; the business risk one takes is their dispensability.

As for the question of a false dilemma, it's not one. The world of the Indian mat weaver is surely a circumscribed one (near-subsistence diet, minimal access to money, no Internet), but two pertinent facts present themselves: the evil middleman in this case is surely the most convenient or best-paying local outlet for coir mats. Either that, or the weavers are complete idiots, and I don't think that's likely. If coir mat weaving didn't pay, they'd be subsistence farmers. If Debbie wasn't there buying mats, they'd be selling to a local market, probably consisting of people like Seth who stay at the local resort.

Furthermore, even pennies go pretty far in an economy where everyone makes pennies. Doesn't Seth Stevenson wonder why his fancy resort was so cheap? A large part is because the workers there can live on pennies per day, and are paid accordingly (probably generously by local standards, but wildly below any developed-world minimum wage).

It's thus in any part of the developing world. If you're an office professional in most parts of the Philippines (to choose an example I know) you'll probably earn about half what a Canadian would doing the same job. And those are elite jobs in that country, ones which assure you of an awfully good life. But of course, since basic needs are very cheap.

Where developing nations get really screwed, cost-wise, is on imported goods. That's one reason why they all turn into exporting nations of one kind or another.

One of the only good allegorical comedy sf novels [...] I ever read was Greg Costikyan's First Contract. It's a parabolic fable in which a super-advanced galactic civilization makes contact with Earth, and then immediately sets out exploiting the whole solar system (including a deal in which the UN Secretary-General sells Jupiter for the modern equivalent of bead necklaces). The planet becomes much like a third-world country, relatively speaking: overrun by miracle-products from the rest of the universe that are really last decade's complete junk by galactic standards. All terran currencies are effectively worthless in the greater galaxy.

The tide starts to turn when an entrepreneur comes up with an improved design for the standard zero-g drink dispensing bulb. He strikes a deal with the galaxy's most ruthless exploiters, a race which controls the galactic equivalent of Wal-Mart, but with a harder attitude towards its suppliers. Earth labor and resources are so cheap by galactic standards that terran products can undercut other planets by magnitudes (read "China or India" and "USA or EU" here...), but conversely, the contract makes for a titanic influx of hard extrasolar currency.

The moral of the story (as Earth is saved from complete backwaterness by turning nearly the entirety of global production to fulfilling the lucrative contract for improved drink bottles with the evil outer-space Wal-Mart aliens), is that there's a pretty wide gulf between legitimately distressing third-world practices (dubiously-convicted prison labor, toxic chemicals, genocide) and the happily exploited coir mat workers of India.