| 22 March 2004 | Monday | 30 Muharram 1425 |
Living with child labour
The explosion in microelectronics
HAVING declared war against terrorism, after the 9/11 attacks, it did not take long for the US to realize that by virtually naming Islamic extremism as being the breeding ground for terrorism, the US appeared to have pitted itself against the Islamic world.
Many US policymakers felt the need for Washington not to present itself as being hostile to a faith whose followers dominated the region extending from the Atlantic to the Pacific, and constituted one fifth of the human race. The region contained the bulk of the world's oil and gas reserves and was strategically situated athwart some of the world's key trade routes.
The concept of Greater Middle East (GME) was propounded by the Bush administration and it covered a vast region from Morocco to Pakistan where the US, together with the major industrialized countries that make up the Group of Eight, would like to promote political freedom and comprehensive social and economic reforms.
The basic reasoning for the GME initiative was that just as the Helsinki process had brought Europe together, the gains resulting from the reforms and development envisaged for this critical region would "tear down the attractions of Islamic extremism".
Secretary of State Colin Powell expounded the concept of this "partnership" between the US and the Middle East in an address to the Heritage Foundation in December 2002, that would put the US on the side of reform, and a modern future for the region.
This concept followed the publication of the first ever Arab Human Development Report in 2002, that highlighted the poverty and backwardness of the entire Arab world. The analysis of the causes of this state of affairs attributed it to deficits in three main areas, those relating to freedom, women and knowledge.
Arab as well as non-Arab economists began to point out that poverty and lack of basic needs were major factors in the rise of religious extremism, as well as of its offshoot, namely terrorism.
The use of force to combat terrorism had to be complemented by measures to address the causes of religious extremism. February 2003 was marked by the initiative to create a Middle East Free Trade Area.
It is noteworthy that the area included in the "Greater Middle East" by the US in its initiative coincides with the area the state of Israel identifies as being directly relevant to its security.
Israel has been opposed to the spread of sophisticated technology to the region, and feels justified in taking pre-emptive action, as it did against the Osirak Nuclear Reactor near Baghdad in 1987. One basic US goal is to safeguard the security of Israel.
Bush has chosen forums that back the neo-conservatives, as well as Israel, to propound the concept of GME. In November 2003, he spoke on his Middle East Partnership plan to the National Endowment for Democracy, in which stress would be laid on reforms in the region in the economic, political and educational spheres. The key role would be played through global links between the US and Arab private sector, involving non-governmental, business and civil society organizations.
The choice of the American Enterprise Institute, that had backed the war on Iraq, and was not known to be sympathetic to the Arab world, to unveil his plans for bringing democracy to this vast region did not produce favourable reactions in the countries concerned.
February 2004 saw the idea of partnership plans turn into a grandiose unilateral reform design. Apparently the pressures of the 2004 presidential campaign have led the planners of the President's election strategy to seek maximum advantage from the initiative.
The previous approach had been to hold consultations both with the Arab and Islamic countries on the one hand and with partners in NATO, G-8, and the European Union on the other.
The change in the manner of presentation not only raises suspicions about ulterior motives but arouses justifiable concern that the superpower may resort to compulsion to enforce democracy along its own model.
When a draft of the initiative was published in a London-based Arabic daily, Arab leaders were quick to show their unhappiness over an apparent US effort to impose change. Even President Hosni Mubarak of Egypt, a friend of the West, described the proposal as "delusional".
Writing in the New York Times on March 9, Dr Zbigniew Brzezinski, who had been National Security Adviser in the Carter administration, described the unilateralist approach as "the wrong way to sell democracy to the Arab world".
While welcoming the Bush administration's long-term commitment to democracy in the Middle East, he felt that the manner of presentation, and suspicions aroused about ulterior motives had produced a hostile reaction to the initiative, and called for early steps to rescue this "potentially worthwhile project".
Apart from the fear that the US may resort to compulsion is compounded by the fear not only in Arab countries but also in Europe, that the US is using this initiative to delay a genuine peace settlement in the Middle East.
Dr Brzezinski recalled the statement by Vice-President Dick Cheney at the recent World Economic Forum at Davos that just as the spread of democracy was "the pre-condition for peace and prosperity in Western Europe" after World War II, "democratic reform is also essential to a peaceful resolution of the long-standing Arab-Israeli dispute". This statement appeared to be a rationalization for postponing efforts to resolve the Israeli-Palestinian conflict.
The fact that Prime Minister Ariel Sharon has stepped up military strikes in occupied Palestinian territories has strengthened suspicions that those officials who are supportive of hardline Israeli policies are guiding the US policy in the Middle East that damages American credibility.
They wish to delay any serious American effort to resolve the core dispute between the Israelis and Palestinians as they favour Israel gaining the maximum advantage before efforts for a genuine peace settlement are taken in hand.
Dr Brzezinski underlines the need to respect Arab sensitivities on their religious and cultural traditions. So long as the Palestinians live under Israeli control, and are humiliated daily, they would not be attracted by the virtues of democracy.
The same holds true of the Iraqis living under the US occupation. If the Bush administration wants its initiative for introducing democracy and modern institutions in the Middle East to succeed, it has to follow certain principles.
Firstly, the programme must be devised in consultation with Arab countries, and not just presented to them. The Europeans also need to be fully engaged, in order to join in persuading the nations of the region about the scope and goals of the plan. Any differences of approach between the US and Europe should be reconciled at the G-8 summit meeting next June.
Secondly, democracy and other reforms will be acceptable only after Arabs have secured self-determination. The grant of sovereignty to Palestinians and Iraqis must be expedited if the programme for introducing democracy in the Arab lands is to succeed.
Dr Brzezinski also believes that the US, instead of delaying a peace settlement in the Middle East, should give it priority, and after defining it, work energetically to implement it.
This will give greater credibility to the democracy initiative, and show the countries of the region that there is a shared basis for a genuine partnership with the democratic West.
The transformation of the Middle East will be a more complex undertaking than the restoration of postwar Europe. Social restoration is easier than social transformation. "Islamic traditions, religious convictions and cultural habits must be treated with patient respect. Only then will the time be ripe for democracy in the Middle East".
The gist of comments by objective analysts is that Washington must resist the temptation to demand blind support for US interests, which its present rulers are inclined to do on the basis of the unquestioned political, economic and military clout of the country.
Instead of using the GME initiative as a stick with which to browbeat Islamic countries, the US administration should carry out a fundamental course correction that will make it acceptable to the G-8 countries at their summit meeting next June.
The writer is a former ambassador.
Living with child labour
It was raining in Islamabad on a freezing December 13 last year when one saw a pair of boys, almost 10 years' age, clad in only a kameez and shalwar trying to shield themselves from cold by sitting around a bonfire of pieces of chipboard and wood.
They work from 8 in the morning till 6 in the evening as assistants or aides to the cycle repairman. For the labour they get ten rupees a day and one meal. This is happening in Islamabad right within the city courts premises.
Then there is this story of a ten-year-old girl whose monthly salary of Rs.1000/- for serving as a domestic, was pocketed by a Masjid Imam, because he was the one who got her the job. Then one fine morning, or maybe an evening, the Imam raped her. She managed to reach the District Courts.
These two cases are typical of what children of this country of the pure have been going through. Permeating poverty aggravated by the World Bank/IMF supervised stabilization programme, and readily adopted by the military government, has only degraded the lot of children beyond the point of endurance.
Pakistan is one among 192 countries to have ratified the Convention on the Rights of Children (CRC) in 1990. The CRC has 54 articles dealing with individual rights of any person less than 18 years of age to develop his or her full potential, free from hunger and want, neglect, exploitation or other abuses.
This Treaty is based on the principle that each child has the right to benefit from provisions aimed at securing his or her well-being and to develop into active and responsible member of society. That Pakistan has failed to live up to its commitments is stating the obvious. Pakistan legislated Employment of Children Act 1991 under which the age of the child was fixed at 14 years.
It provided that no child shall be employed or permitted in any of the occupations set forth in part I of the schedule of that Act {part-I of this schedule lists six occupations including transport of passengers, goods and mails by railway, cinder picking, work in catering establishment at railway station, work relating to the constructions of railway station, port authority or work relating to crackers and fire works} or any workshop wherein any of the processes set forth in part-II of that schedule is carried on.
Exception has been made for child labour in occupations, carried on with the help of the family, or in a school. Pakistan ratified the International Labour Organization (ILO) convention 182 in 2001 pledging to take all necessary measures to eliminate as a priority the worst form of child labour.
ILO has recently launched a four-year project in support of a time-bound programme to provide technical assistance to Pakistan to implement the Convention.
Pakistan has reportedly achieved substantial progress in eliminating child labour from carpet and soccer ball manufacturing industries. Yet a number of children are still engaged in child labour harmful to their health safety or morals as defined under the Convention.
The Economic Survey of Pakistan defines labour force as comprising all persons of 10 years of age and more. This negates the government commitment to eliminating child labour, and legitimizes child labour. Reliable data on child labour is not available.
But the carpet weaving business depends entirely on child labour. The argument goes that their supple fingers make it possible for fine weaving of carpets. They are paid a pittance for their labour.
Children are also seen in the profession of 'helpers' to the mechanics in workshops or being assistants to the drivers for extended periods of time where they are abused physically and even sexually. In Islamabad, one finds child pickers carrying bags of garbage.
The only capital they possess is a bicycle and an old polythene bag astride its carrier. It appears that they have earmarked the garbage bins among themselves for a peaceful coexistence.
What could be more demeaning than the child labour at these places? Some progress has, however, been made and child labour eliminated from football industry in response to ultimatums from importers abroad.
The Labour Force Survey 1999-2000, conducted by the Federal Bureau of Statistics (FBS), showed that children aged 10 to 14 represented on average around 20 per cent of the total population.
Of the 104 million children in the country only about 50 per cent attend schools, and most of them drop out. According to FBS, there are about 2.5 million children workers of whom 73 per cent are boys.
A few years ago the number was 3.1 million. Human Rights Commission of Pakistan disputes the government figures and estimates the number to be "realistically in the region of 11 - 12 million". Assuming a 2.8 per cent population growth rate there may be approximately 13 million children working today.
According to the planning commission there were in 1991 as many as eight million working children in the 10 to 14 years age group. A large number of them were working in hazardous occupations in spite of Employment of Children Act. Even this figure is an underestimate since it does not take into account children in the age group of 15 and above.
The data is not to be believed because anecdotal evidence is overwhelming that the problem is much graver. Child labour is employed even as domestics in our own homes.
Child labour seemed so normal a few years ago that one didn't give it a thought. It has been prevalent for as long as one remembers. Boys and girls working at home were the order of the day. They still are.
Poverty has forced many families to send their children out to work including in dangerous professions of camel jockeys in the Gulf States. Endemic poverty forces large poor families to pool everybody's effort including children's' to be able to produce enough to keep body and soul together. If children do not work the family including the children may have nothing to eat or wear.
Moreover, having been denied equal opportunity by the society like access to education or health, what else can the children do to survive in this harsh and heartless environment? If they are forbidden according to this law from taking up employment wherever it is available, they will simply be forced to starve.
It is easy to make a law and unburden one's conscience, but it is quite another to do something substantial like providing appropriate opportunities for equal access to education and health, or lay down the basis for a long term solution, and live up to its commitments both under the law and its international covenants.
More than the legislation and international covenants, what one needs is a sincerity of purpose. The former US president Johnson had launched 'Head Start' programme in the sixties for under-fives.
It provided intensive support for poor children with education, health and nutrition. This provided the basis for them to learn when they enter primary school.
One famous study followed for thirty years the destiny of children from the programme and found that for every dollar spent on Head Start child social security saved seven dollars.
Investment in human development and more particularly in children is a cost-effective method of overcoming a number of problems including that of child labour and poverty.
Children in the rural areas also work for the family and may be required to walk several kilometers every day to fetch water and firewood. More than the child labour, the denial of opportunities must cause greater worry. Child mortality in this country is very high.
About 38 per cent children under age 5 are underweight according to Human Development Report. Nineteen 19 per cent are under-nourished. Infants with low birth weight are 21 per cent.
Infant mortality per 1000 live births is as high as 84. Zimbabwe, Kenya, Uganda, Yemen, Haiti have a lower mortality rate. Under-five mortality rate per 1,000 live births was 109 in 2001 and is higher than India's at 93.
Such a poor human development index and falling investment on children primarily in education presages a disaster. No amount of legislation will yield any positive results. We must invest heavily in education and health by under emphasizing our obsessive concern with security.
As a percentage of the GDP we spend as low as 1.8 on education and 0.9 on health; and as high as 4.5 on military and 5 on debt servicing, most of the latter defence related.
As many as 4,000 children, are in jails in Pakistan. Instead of paying lip service to the cause of children, the least the government can do is to allow wholesale release on bail of all the children under 18, subject of course to adequate sureties.
The explosion in microelectronics
Technological developments and innovations have sharply reduced the costs of communication and transportation, modifying the geographical distribution of economic powers and forcing industries to adapt to these changes.
The price of new technology (digital and communications) has declined drastically - by the mid-1990s a Pentium chip PC was costing 1/10,000 times of the IBM mainframe of the early 1970s.
The changes induced have radically altered the demand for skills and the nature of trade, requiring sympathetic changes in the roles and policies of governments and economic actors, as sovereignty of nation states becomes increasingly restricted, if not meaningless.
The boom in microelectronics and telecommunications has changed the nature of markets (forcing concomitant changes in the structure of firms) and has shifted the balance of economic power between domestic classes, countries and continents.
It has created new channels of social mobility while rendering obsolete many old skills and jobs. By reducing the importance of transportation costs it has reinforced the concepts like comparative advantage based on factors of production that still remain immobile (e.g. labour) in a world otherwise characterized by freely-flowing finance, technology, information and services.
This revolution, which has reduced communication and transaction costs is having, and will continue to have, far-reaching results. To begin with, these developments have enhanced the mobility of large volumes of capital in what are smoothly operating financial markets, the regulations on information of ownership of capital, introduced after September 11 notwithstanding.
These near frictionless financial markets are becoming less dependent on intermediaries like brokers. With the enhanced mobility of capital the local investors of yesterday have today become players in global markets.
This increased mobility of capital across international borders has also made somewhat irrelevant the major assumption of conventional trade theory regarding the international immobility of factors.
In the information age services do not have to be consumed where and when produced. Owing to the microelectronic revolution they can be traded across not only geographical boundaries but also time barriers, as they can now be stored electronically.
Moreover, the globalization of markets has decreased the importance of single large specifically located markets (since everyone can access this global market), thereby intensifying competition.
Globalization has forced adaptations in technology with companies switching from large fixed investments to computer-led, if not controlled, flexible specialization, changing structures of firms to enable quicker responses.
In a highly competitive global market experiencing rapid changes in product mix, design and technology, fixed investments, having become less attractive and more expensive, will now play a reduced role.
Along with lower fixed costs of search for markets and customers and of advertising, the factors identified above have reduced the importance of economies of scale, increasing the scope and potential to exploit opportunities for product differentiation. The role of the standardized mass market is diminishing and that of exclusive niche markets for differentiated products growing.
The opportunities created by new communications technology has increased the span of coordination and control and just in-time technology reducing inventory requirements and warehousing costs, thereby enabling the creation of virtual firms like amazon.com and prospects for outsourcing through a global network of production and marketing outlets.
The revolution in microelectronics and telecommunications has enabled: a) transmission of information through fibre optics and satellite based communication systems at reduced costs; b) information storage and recall through increased memory of the chip; and c) information processing (through developments in the micro-processor).
Resultantly, the importance of comparative advantage and international division of labour has increased - high transaction costs are no longer a constraint to firms to locate or outsource operations based on comparative cost advantage. The logic of large firms which tended to integrate their operations, irrespective of core competency, as a means to reduce transaction and search costs, has been nullified.
In particular, the new communications technology has brought new areas, like services (computer software, consultancy), into the framework. Earlier services were not tradable across time and space.
Now they can be exported via the internet and even stored electronically and used a long time after they have been produced. Now that services are tradable they can be included as a component in the comparative advantage of developing countries, export of labour-intensive services (typing, programming, call centres, etc.).
Computers can be used to automate low productivity tasks previously performed by office secretaries. The tradability of services across space, the reduced attraction of large markets and shrinking importance of economies of scale are all combining to provide developing countries the opportunity to sell their labour-intensive services and manufactures.
Computers combined with new telecommunications technologies are enhancing to productivity significantly. Unfortunately, these productivity increases are not being measured by the existing set of output and performance indicators.
For instance, telecommunications output is measured in minutes of calls, a measurement that ignores the massive increase in transmission capacity through the introduction of faster modems and faxes.
Again, output in finance, health and education is measured in terms of hours worked. Using this definition the measured growth in productivity would be zero. As the share of these sectors in the economy rises, so does the extent by which productivity is underestimated.
With the rapid developments in technology productivity, growth is, therefore, being underestimated by larger amounts. Similarly, the output of the banking sector is measured in terms of cheques processed - this declines with ATMs replacing bank clerks. The customer convenience and time saved is not measured.
However, tax evasion in the digital age has become easier, since many transactions that were earlier conducted across well defined geographical borders are now conducted in cyber space and can be concealed from tax authorities. Resultantly, an increasing share of the tax burden is being borne by the relatively immobile unskilled labour.
The writer is a former finance minister of Punjab.