Liberty
to Trade
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.
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