Microenterprises and cheap labour

By Dr. K Siddique-e- Rabbani, Professor of Physics, University of Dhaka
17 February 2004, 18:00 PM
Microcredit has achieved a great success but falls short of the goals of large-scale poverty alleviation. On a step beyond microcredit, very small scale production units or microenterprises have the potential for bringing in the much desired poverty alleviation, and are getting a lot of emphasis in the recent days, but one needs to tread very cautiously on this path. If the fundamental human, social and economic issues are not understood in their subtlety, this may lead to social exploitation and deprivation - contrary to what was expected.

The emphasis on micro or small enterprises that is in vogue rotates mostly around financial gains from 'solely exportable' items, since it relates to a market well familiar to the promoters of these programmes - the foreigners, or the educated middle class in our country. In coining the term 'solely exportable' I mean an item that has no use by the community which produces it, sending the item to a city or to a distant rural area even within the same country is included in this 'export' concept. Such activities essentially use the rural people as a source of cheap labour for gaining a competitive edge in another affluent market. In my opinion, this will never lead to poverty alleviation. Look at your housemaid - a source of cheap labour - does she have any bright future to look forward to after 10/20 years? Look at a garment worker - she has to agitate on the streets to get her Eid bonus even after thirty years of this industry. She is trampled to death in the eventuality of a small fire for not having a properly designed building. Her security, wage, quality of life, have hardly seen any improvement over this period, rather weighed against price index of commodities, these are decreasing with time. What has changed is that we have more lavish and expensive transports in the cities, and air-cooled houses, shopping malls or offices, and a rich person in the west gets a shirt at a price much cheaper than he ought to have paid. The disparity is continuing to increase pushing the poor down and down to sub-human existence. Truly speaking, the poor workers are subsidising the expenses of a rich westerner and helping increase the affluence of the city dwellers in the same country through activities that only exploit cheap labour.

In my opinion, what is needed is a scheme that will allow the people to use their own ingenuity and intellect to have a control over both production and marketing of their products. Besides, the products should be of such a nature that can be used by the people themselves in order to enhance their own quality of life. Exports will come eventually as a natural economic activity, when they have mastered the techniques and learnt management skills. Therefore "Make local, sell local" should be the prime slogan.

To achieve this we need two things - technology and finance. There have been financial inputs, but technology so far has remained ignored. We have educated and trained manpower in the Third World, but the emphasis of the training has been in looking for solutions in the borderlines of science and technology that will only help the developed west expecting that these will 'trickle down' to our common people somehow. This has proved wrong. That bringing the benefits of modern science and technology to the majority of people living in the Third World is a big challenge, that this calls for lots of ingenuity and innovation with a very good understanding of basic science, is a message that needs to be put across. The financial organisations need to work closely with the scientific community and the rural people to innovate solutions to their real needs; to invent viable products that can be used to develop and expand these micro-enterprises; to educate and train them so that they themselves can invent or improvise products for their own use eventually.

These are intelligent people, lack of formal education does not make them duffers. They know when and how to plough the land, to sow the seeds, to take all necessary care and to reap the harvest so that the 14 crore people including the highly educated among us in the cities can have enough to eat. If they can achieve this gigantic feat, there is no reason behind underestimating them.