Friday July 01, 2022

Corona and the socialisation of losses

April 14, 2020

The coronavirus has clearly exposed the flaws in our system which cares less for the health of all and more for ruining peoples’ lives everywhere by spending huge amounts on building arsenal.

Today we see that finally people are asking the powerful whether it was not wiser to buy technologically advanced medical appliances like ventilators than warplanes.

However, there is another side to this pandemic which it seems not many have pondered upon. There is more to the argument than just saying casually that the poor, the daily-wage earners or those who toil in industrial sites (or should we say labour camps?) will suffer a lot more than the rich.

Have we not seen already how in the system that we have today, whenever there is an economic crisis those who always advocate against socialization of production get bail-out packages and favours from the state to stay put in their position lest they go bankrupt. This goes against the principle of the free market, but who cares when it is about saving one's wealth. This is how their profits, before the crisis, are privatised – but their liabilities and losses, during an economic crunch like today, are socialized and distributed among the people.

It hasn’t been a month since Pakistan, and specifically Sindh, imposed a lockdown and shut down business activities but the results have already started to surface – obviously to be borne by the lower classes. Karachi, the hub of economic activity, has industrial sites where millions of workers toil in sweatshop-like factories, without work safety and insurance, to produce commodities worth billions of rupees that are then exported to Europe and America.

Little do these skilled labourers, stitching clothes for the consumption of fast fashion, know that their products will be sent to other countries and a pair of these pants will be sold at an amount equal to their one month’s salary. These workers work round the clock to produce supplies for famous international brands such as H&M, Mango, Gap, Zara and many others.

What do most of the workers get in return? They receive a salary not more than the set minimum wage, without health benefits, insurance, paid leaves and emergency funding. On top of that, workers who don’t have any choice but to sell their skills in these factories can get fired on a day's notice and that too without their dues. These workers are not usually registered with the government, which again saves a lot of money for factory owners and also comes in handy when workers are sent packing.

So what do the factory owners get in return for flouting international labour standards? They get protection by our state apparatus. This is done so on the pretext of getting a GSP Plus scheme for the country, which helps Pakistan send its products to European markets at lower duty rates. However, to continue getting the status for the said scheme Pakistan needs to maintain safety standards at workplaces where these products are made. But hardly ever are these standards maintained in industrial areas.

We saw how in 2012 the Baldia Factory fire killed nearly 300 workers. According to the inquiry, the factory had no built-in system to preempt any such incident. It is worth mentioning here that the said factory was producing garments for a German brand KiK. Human Rights Watch (HRW) revealed in its report a year ago how the textile industry in Pakistan flouts labour laws and does not meet global standards. The report noted that the organization came across child labour in these mills and also observed severe discrimination against women.

How much profit do the owners make out of the GSP Plus scheme? This can be seen in a recent report which noted that the country’s exports to the European Union have increased from 4.538 billion euros in 2013 to 7.492 billion euros in 2019 – an increase of 65 percent.

This sheer profiteering at the expense of the labouring class is surreptitiously individualised or privatised by factory owners who keep saying that there is not much business left in the textile industry but their sweatshops still keep running round the clock with three shifts, day and night, to produce commodities for the international market. However, the day these owners or investors start getting a little cut on their profits, they want the workers to bear the consequences.

In the past few weeks, when businesses have been shut down and industries have been forced to stop production, we saw that some factories were still running, jeopardizing the lives of thousands of workers, solely in order to keep getting profits. Similarly, another example of the socialization of losses is the firing of a number of workers at a large textile (and denim) company in Korangi, Karachi; the said company is a supplier for famous international brands. A video went viral only a few days ago in which a worker can be heard asking how labourers, including himself, who worked hard for years for this company which made it possible for the owner to build seven other factories in the country, could be removed by them during a pandemic.

It should have been the owner’s ethical duty to bear the cost of a few weeks or months during the lockdown because of the pandemic, and support the workers who literally built his fortunes for him. But capital knows no ethics. Therefore, the only option left for the fired workers now is to become beggars, depend on charitable NGOs or worse on the state’s promised help which hasn’t been seen anywhere as yet.

The Sindh government had issued a notice preventing industrialists and companies from firing their workers because of the lockdown and the ensuing crisis. But it was just a notification, which had no legality attached to it. Rather than paying lip service to this issue, the government – federal or provincial – should pass legislation, making it mandatory for industrialists to reveal their profits and prohibit them from firing any worker during this pandemic lockdown.

In the coming days, the firing of workers and socialization of losses will not be limited to industrial sites. It will also be seen in the service sector. Already a renowned not-for-profit headed by a ‘human rights champion’ has fired its employees without any notice.

Only time will tell how the labour force of the country will be able to cope with the exacerbating situation. The key to stop the socialization of losses is resistance by the workers, forcing the government to make the rich pay for the corona crisis.

The writer is a journalistcovering human andlabour rights.

Twitter: @Fawadhazan