Originally posted in The Financial Express on 23 September 2022
Impact of inflation on economy: Part IV
A double regression on poverty, child labour feared
Economists apprehensive about EU GSP+ facility, official dispells doubts
Halima has sent her son to a motor workshop in Dhaka’s Banglamotor area, at age as early as 11 years. It, evidently, represents a double regression, from progression in poverty alleviation and child-labour elimination.
She syas she has been compelled to do so. Bearing household expenditure of four members with her monthly income became difficult in the capital city. Halima Banu works in a private hospital as cleaning-staff member. Her husband is a construction worker and does not have regular earning.
Like Halima’s, many other families in low-income group are recently compelled to send their children to work trying to manage household expenditures amid surging inflation in recent times. Experts caution that such trend may lead to rise in the number of child workers again.
Low-income-group families like this are using every available means to survive the penury-like situation induced by price onslaughts. Inflation rose to 7.48 per cent in July from 5.36 per cent in the corresponding month last year. Food inflation also jumped to a peak 8.19 per cent, government data show.
Ms Halima said she could meet family expenditure hardly for 15 days with her monthly income while for the rest half of the month she had to take loan from near ones. She has two more children, aged between five and eight years.
“How long could I continue to manage my family expenditure in such a way?” she questioned.
Nurul Alam (not real name) is a dropout student of class five in a local primary school in city’s Jatrabari. Now, he is working in a light- engineering factory near old part of the city.
“I miss my school and friends, but my family is unable to bear cost of five members and forced to send me for work,” the 14-year-old laments.
Alam feels that his parents also felt guilty of sending him for such work being helpless.
In a field survey on the twist to an improving child-labour scenario , the FE correspondent has found cases representing how surging inflation compels a multitude of low-income group of people to send their children to work.
Bearing household expenditure became difficult from one source of income or two in recent times. People struggling to live in the capital city, after pandemic-driven reverse migration, are either searching works for their children or already sent them to work.
In a new phenomenon of Corona-enforced rise in poverty, a good number of poor women and elderly men are seen panhandling wherever there are crowds of people, particularly in marketplaces and around schools and colleges.
Economists say such poverty-pushed escalation in child labour may affect the country’s GSP++ benefit from the European Union after Bangladesh will have graduated to middle-income country (MIC) by 2026 from the least-developed country (LDC) status–unless the wheel is rolled back into reverse gear.
The government of late ratified the Minimum Age Convention 1973 of the International Labour Organisation (ILO) on March 22, 2022.
Md Hafizur Rahman, Director-General of the World Trade Organisation Cell (WTO) at the Ministry of Commerce (MoC), says, “Child labour is almost eliminated in formal sector but it may exist in informal sector which is quite large in Bangladesh.”
The DG asserts that availing GSP++ facility will not be hampered if child labour is completely eliminated from formal sector, such as the largest export-oriented apparel sector.
Economist Dr Hossain Zillur Rahman, however, points out that as informal sector constitutes almost half the economy of Bangladesh, existence of child labour would matter in getting the tariff benefit from the EU.
“The government should conduct a data analysis of economic impact of inflation to assess the situation,” Dr Rahman, who is Executive Chairman of Power and Participation Research Centre (PPRC) and former adviser of caretaker government, suggests.
Lower-income people are forced to send their children to work when their incomes do not match family budget, he notes.
“Unfortunately, the government does not have any data on which areas the high inflation is leaving its impact,” he says.
The economist suggests that social-safety net should be intensified in urban areas.
Md Abdullah Al Mamun, Director, Child Protection and Child Right Governance Unit of Save the Children International, Bangladesh, thinks there is vulnerability to raise child labour and early marriage due to rising cost of living.
He says limited-income people tried to adjust family cost by compromising education cost of their children and then send them to work.
“School-retention programme of Save the Children is trying to bring back the dropout children to school. It is an effective tool to thwart child labour and early marriage.”
Experts have cautioned that such situation may affect Bangladesh’s commitment to eliminating child labour as a ratified country to avail the European Union’s GSP+ preferential tariffs.
A joint report of UNICEF and ILO, published last year, warned that globally nine million additional children were at risk of being pushed into child labour by the end of 2022 as a result of the pandemic.
Executive Director of the Centre for Policy Dialogue (CPD) Dr Fahmida Khatun says due to inflationary pressure, poor, low-and fixed- income families are under tremendous pressure to make ends meet.
“Current level of income of these families is inadequate to cover expenses even for basic necessities. If such difficult situation continues, poor families will be forced to send their children to the informal labour market for extra money,” she adds.
Increased child labour will definitely have an impact on the availability of EU GSP++ as this provision requires compliance on many rights- related issues and abolition of child labour, she noted.
“Therefore, government must tackle inflation with appropriate economic-policy tools,” Dr Fahmida says.
“… poor families should be provided with food and essentials at low prices. Expansion of the open-market sales (OMS) and its efficient management are also required,” she suggests.