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Liberty Institute Briefing Paper on Trade and Development
November 1999
International Trade and Child Labour: The role of the market
Social and labour conditions have become a highly charged subject, particularly
after attempts to link trade and social conditions under the auspices of
the WTO. On the one hand, lower labour conditions, including the use of
child labour is said to give economic advantage to some countries, and
therefore there is a demand for protection in some other countries. On
the other hand, these poor labour conditions are said to be the fallout
of market reforms and free trade, and therefore there is a demand for restricting
trade. No doubt child labour provides an emotive shield for a range of
other agendas.
However, rather than a restrictive linkage between trade and child
labour, historical experience clearly shows that an open market and free
trade are the best instruments for improving the labour conditions, including
elimination of child labour.
The Problem
Estimates of child labour in India range from 17.5 million to 200 million.
The enormity of the situation is well known to social activists, governmental
and intergovernmental agencies. In this regard, many well-meaning initiatives
have also been undertaken. The Indian agenda is to end child labour in
hazardous industries by the year 2000 and all child labour by the year
2010. But how serious are we? And what can the international community
do to help the process?
The existence of child labour is a part of our everyday reality.
In spite of restrictions in most nations, children continue to work. This
has been so throughout history. Indeed, children as an integral part of
the family have always worked, and will continue to work for various reasons,
as they do currently even in the developed countries. However, the situation
in developing countries needs special attention. A holistic analysis of
the contemporary society and choices before the children and their families
needs to be undertaken.
The Causes
Policy planners agree that a significant reason for child labour is
poverty. Though children are not paid well, they nonetheless contribute
to the family income. They are often prompted to work by the parents. Lack
of schooling opportunities is a contributing factor. But the reasons are
also social and cultural. Many children work because it is an accepted
norm within the social structure. Acceptance of such traditional factors
as expecting the lower castes or classes to perform manual labour leads
children of these classes and castes into manual work at an early age.
Rapid migration to the urban areas has further aggravated the situation.
However, much of child labour today exists either in the informal or the
illegal sector. The laxity of officials in enforcing existing labour restrictions
perpetuates child labour. The hard fact is that in developing countries,
subsistence and survival takes primacy over anything else.
Good Intentions and Tragic Outcomes
Past experience has shown that where governments implemented a policy
of banning child labour under international influence, severe negative
and unintended consequences followed. In Bangladesh, for example, a boycott
of garments made by child labour caused 50,000 children to loose their
jobs. These children then took up even lower paid jobs in other industries,
or other demeaning jobs, some even being pushed into prostitution. Clearly,
a focus on particular export sectors may lead to an effective political
campaign, but does very little to address the real issue. Most children
who work do not belong to such sectors but are spread across the spctrum
from agriculture to small-scale manufacturing to informal trade and services.
An immediate abolition of child labour appears neither practical nor even
desirable.
Good intentions are never a sufficient condition for improving social
and economic realities. It will be a tragedy if, as a result of well-meaning
but hurried policies aimed at prohibiting child labour, children are further
victimised because the policies fail to take into consideration context-specific
situations of the developing economies.
Human Rights and the Rights of the Child
Recent efforts to link international trade with child labour are also
fraught with negative consequences. Is it fair to link trade with child
labour? Is this a trade-related agenda? Is the demand a result of an alliance
between the "protectionist" lobbying groups who want to safeguard their
economic interests, and the short-sighted "morally driven" human rights
groups? One can easily condemn one group and applaud the other, but that
would lead us nowhere.
What is important is that this issue, like any other violations of
human rights, must be treated in their specific economic, political and
social context. The approach must be sensitive to the needs of the working
children and their families. So it becomes important not to equate child
labour with child abuse.
The Self-Inflicted Wounds
The complete eradication of child labour is a noble goal. As with many
other issues of rights abuse, there are two ways of looking at the possible
solutions. One is the positivistic way, to rely and emphasize the legal
and administrative measures, including economic sanctions. The other is
the holistic way, to seek to bring about change through creating a suitable
environment and a capacity for sustained effort. Solving the problem requires
raising public awareness and fostering public demand for change. The problem
of child labour simply cannot be wished away by fiats and dictats.
The Indian government has committed itself to face the challenge.
However, it can no longer ignore its own role in promoting policies that
have stymied economic opportunities for vast majority of our people and
perpetuated socio-economic disparities.
For instance, an inflationary monetary policy and efforts to protect
domestic industry, distorted the market, stifled economic growth, induced
economic inefficiencies, reduced employment and economic opportunities,
and led to politicisation of labour. Consequently, under political patronage
organised labour has all but priced India labour out of competition. This
is best seen in the fact that economic growth in recent years has hardly
led to creation of jobs in the organised sector. As a result, barely 15%
of Indian workforce is in organised sectors of the economy, and over a
half of that are in bloated public sectors and various quasi-governmental
organisations. Most of the remaining workforce has been pushed to the margins
of economy and subsistence. Is it any surprise then that so many Indian
families continue to depend on their children's contribution to make two
ends meet?
Role of the Market
No society in history has been able to develop without the labour of
their children. At the dawn of industrial revolution, over 95% of children
had to work. In less than two hundred years, today's developed and industrialised
countries broke away from thousands of years of human history and made
child labour mostly redundant by substantial gains in productivity and
incomes. In recent decades, some of the newly industrialised countries
compressed this process in to a single generation.
Rather than learning from these recent experiences, most developing
countries, like India, pursued policies that prolonged the historical process
and agony of their children. Clearly, domestic economic reforms must be
expanded and accelerated if we are to avoid wasting our most precious resource,
our children.
The international community must aid the process of all round development
by encouraging free trade, promoting economic prosperity and economic development,
and thereby helping developing nations to eliminate child labour forever.
Deep-rooted socio-economic problems cannot be done away by legislation
alone, by state intervention, or by international economic sanctions.
The need is to create a situation whereby children in developing
countries will no longer have to work, where it would be worthwhile for
them to attend school, where the parent’s income alone will be sufficient
to provide for the children. We should not need the WTO to tell us to reform
if we are really concerned about improving the lot of our own people.
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A version of this paper, co-authored by Dr. Munmun Jha of Indian Institute
of Technology, Kanpur and Barun S. Mitra, was published in The
Economic Times, 7 December 1999.
Comments and suggestions are welcome. Please write to Liberty
Institute.
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