South Asia’s toxic debt

In February, Anti-Slavery International launched major research into debt bondage in South Asia. Report author Krishna Prasad Upadhyaya explains how poverty, discrimination and slavery remain part of daily life for millions in India, Pakistan and Nepal.
 
While ‘toxic debt’ is now synonymous with the vast amounts of money squandered on unsound investment, it could equally apply to the few dollars trapping an estimated 9.5 million people across South Asia in literally toxic working conditions.

Across India, Pakistan and Nepal, debt bondage is a hazard to the labourers who work nearly every day of the year in fields, factories, brick-kilns, sweatshops or even homes, for wages that fail to cover the daily necessities of life.

Unable to afford medical care or the cost of unavoidable events, like weddings or funerals, and without access to banks, the only alternative for many landless labourers is to ask a boss or landowner for a loan or an advance.

Quickly the labourers become 'bonded' and find that they must work simply to pay back the interest of their loan.

They lose control over their conditions of employment and what, if anything, they are paid. Their debt is often inflated through exorbitant charges, often making it impossible to repay the original loan and trapping them in a cycle of debt.

Tragically, debt can be passed on through the generations. Entire families can inherit the debt, with children taken out of school by their parent to work off the interest repayments. Without an education, the one chance for the children to escape poverty is lost.

In the Indian state of Tamil Nadu, some parents will even arrange for a daughter to work without a salary for up to three years in return for a lump sum payment to cover the cost of her wedding.

In Pakistan, it is not uncommon for the desperate to go as far as sell their kidneys to try and break free from debt. Unfortunately, even after taking such a desperate measure, the associated ill health caused by the loss of the organ makes it easy to fall back into debt.

Despite laws in all three countries that outlaw bonded labour, unscrupulous landlords and bosses continue to prey on the poorest and most vulnerable members of their society for their own profit.  

Across the region, even with India 'developing' at pace, around 90 per cent of people still work in the informal or unregulated economy. Most poor people do not own their own land, and are completely dependent on the whim of their boss or landowner to make their living or even for a place to live.

So why if there is legislation banning bonded labour does the practice continue to exist? Our own research has found that debt bondage is not an issue that affects the population equally. Prejudice of the wider society against Dalits and other minorities, as well as an ineffective government response to the issue are the major reasons for the continuation and toleration of slavery.

The Indian government has admitted that more than 86 per cent of bonded labourers come from low caste or are indigenous people, while in Pakistan, nearly all of the 2.8 million bonded labourers in brick kilns or sharecropping are Dalits from the minority Hindu community. In Nepal, seasonal agricultural forms of bonded labour only affect Dalits or minority groups, which make up between 15-20% of the population.

People from these communities are pressured to work in industries considered ritually polluting, including work in brick kilns, mines, leatherwork, domestic work or manual scavenging (the cleaning of dry latrines with their bare hands).

Clearly the cleaning of toxic human waste is also polluting in a physical sense and seriously damaging to the health of the worker, especially as protective equipment and clothing are not usually provided.

Often caste is used as an excuse to force people to take on debt. In the rural areas of Orissa in east India, members of the barber-caste are pressured by the community to take an annual advance (of usually only 10 - 15kg of rice) in return for providing the service of unpaid weekly shaves and monthly hair cuts to upper caste people. Barbers are also forced to perform unpaid ceremonial duties, including the washing of the feet of guests at weddings and the cleaning up of marriage feasts.

Bonded labour will remain widespread until the governments of India, Pakistan and Nepal are willing to establish national action plans that include the creation of bodies to monitor and co-ordinate action to end slavery.

It is also essential for these governments to recognise that the issue of land reform and universal access to education are major contributing factors behind the pervasiveness of debt bondage.

Both are also central for preventing former bonded labourers from slipping back into slavery.

Take the Nepalese government’s decision to ban the 'Kamaiya' form of seasonal bonded labour prevalent in the western plains of the country in 2000.

Though this decree is estimated to have freed around 18,400 indigenous Tharu people from slavery, the lack of follow up land reform and retraining resulted in many former Kamaiya suddenly finding themselves without support or alternative work and quickly falling back into bondage.

However, in Indian states where land redistribution has taken place there is evidence that former bonded labourers have been able to build new lives for themselves and their families.

Finally, by guaranteeing workers a minimum wage and making sure that aid and investment target specifically Dalit and the other minority communities vulnerable to this form of exploitation, it should be possible to finally prevent another generation from falling into a toxic debt currently poisoning the lives of millions.