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Small subsistence loans, usually up to Rs. 1,000, are taken and returned on a regular basis. These are generally benign and help workers tide over small consumption needs when wages are insufficient. Indeed, they can be helpful to workers. Generally, these small loans do not have the serious implications associated with long-term indebtedness, though there are cases in which small loans accumulate to become larger loans that cannot easily be repaid and involve the worker in greater restrictions. |
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Larger loans are taken for “lumpy” expenditures. These can range up to Rs. 150,000. The main reasons for these larger loans are to cover significant periods of no income (payments withheld to miners until the coal has been sold; seasonal unemployment in agriculture and fisheries); to pay the costs associated with illness (especially prevalent in the sectors with hazardous working conditions, such as mining, carpet-weaving and glass bangle manufacture); or to meet the large costs of weddings and funerals (the costs of an appropriate wedding or funeral can easily exceed the annual earnings of a family). Particularly in the cases of sharecroppers and migrating miners (most come from specific regions of NWFP), large advances are made at the start of the contract. |
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In the agricultural sector, sharecroppers and other tenants generally take loans to cover the costs of their share of agricultural inputs. Again, these can be substantial, depending on the type of share system practiced in a given area. |
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Generally, these loans are given without explicit interest, though researchers came across cases in which interest was charged (particularly for large loans in the carpet sector). However, all loans are made on an oral basis. When workers are illiterate and there is a large socio-political gulf between them and their employers, there are occasions on which the size of the loan can be adjusted upwards or prices of inputs and outputs manipulated to increase the size of the loan or decrease the value of repayment. The rapid assessments came across many complaints from workers about practices of this kind.
Themes and Trends A number of significant, if tentative, conclusions can be drawn from the rapid assessments:
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Indebtedness of workers to their employers is widespread in seven of the ten sectors surveyed: agriculture; mining; carpet-weaving; brick-making; marine fisheries; glass bangles; and domestic work. Generally, these workers cannot change their employment until the debt is repaid. |
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The correlation between indebtedness and bondage/ forced labor is not strong. There are many instances in which the indebtedness is relatively benign, i.e., it can be repaid in a reasonable period of time from current earnings; it provides real help to the worker’s family in “smoothing” consumption expenditure (and generally without interest); and it has few onerous implications for the freedom of the worker. At the same time, elements of bondage/ forced labor can exist without worker debt. The researchers noted that they found some labor arrangements in the begging sector “that came close to outright slavery”, despite the absence of a basis in debt. In the tanneries sector, the lockout policy of employers is an alternative mechanism (to debt) to “discipline” workers in hazardous conditions and with low pay.
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Despite this relatively weak correlation, the rapid assessments show that there is real cause for concern about substantive debts of a worker to the employer, those large sums that cannot realistically be repaid from current income. In general, these substantive debts are also effective in the sense that employers and labor contractors are confident of being able to enforce the debts and track down any heavily indebted worker who escapes. The reason for concern is that these substantive debts can, in certain circumstances, give rise to highly coercive and abusive labor arrangements: the most acute forms of bonded labor.
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Where there is relative social proximity between the employer and the worker, coercive and abusive labor arrangements tend not to arise, even in the cases of substantive debt. Thus, it is reported that the most acute forms of bonded labor do not exist among sharecroppers in NWFP and Balochistan, where tribal solidarity prevents the emergence of abuse. |
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The situation is, however, different when there is a wide social gulf between employers and workers. In several of the sectors reviewed, the majority of workers belong to vulnerable groups: those of low caste, long-distance migrants (such as miners from Swat) and non-Muslims. When these vulnerable groups slip into substantive debt, they are at high risk of coercive and abusive labor arrangements.
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While the rapid assessments were not intended to assess the incidence of either bonded labor or its most acute forms, they do support the hypothesis that the problem of labor bonded by debt and subject to coercive and abusive labor arrangements is significant in five of the sectors surveyed: agriculture; mining; carpet-weaving; brick-making; and domestic work. All these sectors employ a large number of people, so that the bonded labor issue in Pakistan is of sufficient magnitude to justify urgent national attention and international assistance. The problem may also exist in both marine fisheries and infrastructure construction in remote areas: these two sectors require further investigation.
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