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Abdul Wahid

Tahir Naeem Malik

May 27th, 2024

Circular Causation of Modern Slavery in Pakistan

0 comments | 5 shares

Estimated reading time: 10 minutes

Abdul Wahid

Tahir Naeem Malik

May 27th, 2024

Circular Causation of Modern Slavery in Pakistan

0 comments | 5 shares

Estimated reading time: 10 minutes

As Pakistan’s economy continues to remain vulnerable, long-term economic weaknesses — of policy, infrastructure and awareness — has meant that the poorest sections of society are caught up in a cycle of economic bondage that is a form of modern slavery, exacerbated by loss and damage caused by increasingly frequent natural disasters. Abdul Wahid and Tahir Naeem Malik examine this circular causation, and make a case for widening the understanding and definition of modern slavery.    

 

Pakistan faces a critical challenge with debt bondage affecting almost 2.34 million people, ranking it 18th for vulnerability to modern slavery in the Global Slavery Index 2023. In the Asia-Pacific, the country ranks fourth for modern slavery risks, with 10.6 per 100 individuals trapped in debt bondage and 80 at risk. Despite government initiatives, effectiveness is low at 37 out of 100, as economic pressures and relationships between sharecroppers, small farmers and property owners exacerbate the issue.

There is a need for a broader understanding of modern slavery. The prevailing perception is that only debt bondage and similar practices constitute modern slavery but this overlooks the exploitative management practices used by employers in the workplace, which also fall under the umbrella of modern slavery.

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In this post, we explore the various manifestations of modern slavery in Pakistan, including those that may not be traditionally recognised as such.  To define modern slavery — it refers to conditions of exploitation from which an individual cannot escape due to threats, violence, coercion, deception or a compulsion born from the absence of any viable alternative means of survival.

In urban centres, young workers often face exploitation by employers offering wages below the statutory minimum and requiring work hours beyond legal limits. This covers both informal and formal sectors, including retail, manufacturing and even academia, where Research Associate positions are advertised with inadequate compensation. Such practices devalue academic research and exploit early career individuals seeking to gain experience and contribute to their fields — it is often regarded as a normal part of one’s career rather than an exploitative condition.

The situation in private security firms is particularly concerning, with companies receiving significant fees per security personnel from clients but remitting only half the amount to the workers. This widespread discrepancy, especially prevalent in contracts with local businesses and public sector organisations, persists with minimal legal or administrative intervention. The lack of scrutiny, often due to the use of cash payments, exacerbates this issue.

In rural areas, labour conditions are considerably worse, with individuals, especially women working in agriculture, trapped in debt bondage and exploitative work environments. These conditions, marked by significantly lower wages for women and sometimes abusive relationships with employers, highlight profound gender inequality and labour exploitation issues in the rural economy.

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The entrapment of individuals in modern slavery in Pakistan is significantly influenced by their low educational attainment and precarious financial positions. This is exacerbated by the persistent increase in inflation, which has remained above 25 per cent for the last year. The decline in industrial production in the country directly affects labour consumption, further straining employment opportunities. Given their limited options, individuals with minimal education and poor financial health find themselves coerced into bonded labor — a condition where they receive salaries well below what is fair or sustainable.

In a study conducted by authors in 2023 on debt bondage found that dowry expenses and the emergence of sudden illnesses serve as significant factors contributing to the issue. On the other side, Pakistan holds the second-highest global ranking in the ratio of out-of-school children, with more than 28 million children not attending formal education. In Pakistan, 50 per cent of the population lacks access to primary healthcare services, and about 42 per cent do not have health insurance.

The cost associated with climate change has emerged as an additional, ongoing catastrophe for affected individuals, particularly highlighted by the recent floods in Pakistan. These floods resulted in substantial losses for many, including the destruction of homes and the loss of valuable assets such as livestock and precious metals.

Consequently, for reconstruction and rehabilitation, individuals have been compelled to seek loans under stringent conditions from the informal sector, typically at interest rates ranging from 30–35 per cent. Already in a state of financial vulnerability from before the floods, these individuals are now also faced with the repercussions of climate change. The United Nations reports that 10 million people in flood-affected areas of Pakistan are without access to necessities.

The 2022 floods in Pakistan submerged a third of the nation, impacting 33 million people, including many children. Damaged water systems left over 5.4 million people dependent on contaminated water sources — resulting in 1,739 fatalities, and inflicted damage worth PKR 3.2 trillion (US$14.8 billion approx.), along with economic losses amounting to PKR 3.3 trillion (US$15.2 billion approx.). Despite Pakistan contributing to less than 1 per cent of global greenhouse emissions, its population is 15 times more likely to succumb to climate-related disasters, underscoring a profound disparity between the country’s minimal contribution to global emissions and the severe impact of climate change on its people.

This, in turn, perpetuates a cycle of modern slavery, as these individuals are unable to afford education, healthcare and basic necessities for themselves and their families. Gunnar Myrdal’s theory of circular causation in his seminal book Asian Drama: An Enquiry into the Poverty of Nations (1968) elucidates the self-perpetuating nature of poverty, which is sustained by a nexus of inter-related factors including limited educational opportunities, inadequate financial resources and entrenched systemic inequalities.

This cycle of causation highlights the dire need for systemic interventions to break the chains of modern slavery by addressing its root causes, including economic instability, educational deficits, and the lack of viable employment opportunities.

Various initiatives under the Benazir Income Support Programme (BISP) have played a role in mitigating modern slavery in rural areas, particularly benefiting women. However, a fundamental action for the government should involve ensuring that all workers receive written work contracts from their employers. Additionally, the adoption of microfinance solutions with minimal costs — similar to models employed by Bandhan Bank in India and Grameen Bank in Bangladesh —  is crucial. It is also essential that salaries be directly deposited into workers’ bank accounts.

This approach not only enhances transparency but also strengthens the enforcement of labour laws and protections. Finally, the government should also extend financial assistance to flood-affected areas, collaborating with international donors to prevent reliance on informal borrowing for rehabilitation. This approach will help safeguard vulnerable populations from exploitative lending practices and support sustainable recovery.

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The views expressed here are those of the authors and does not represent the views of the ‘South Asia @ LSE’ blog, the LSE South Asia Centre or the London School of Economics and Political Science. Please click here for our Comments Policy.

This blogpost may not be reposted by anyone without prior written consent of LSE South Asia Centre; please e-mail southasia@lse.ac.uk for permission.

Banner image © Zeeshan Tejani, Karachi, 2020, Unsplash.

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About the author

Abdul Wahid

Dr Abdul Wahid is Assistant Professor at the NUML School of Business, National University of Modern Languages, Islamabad.

Tahir Naeem Malik

Tahir Naeem Malik is Professor of International Relations at the National University of Modern Languages, Islamabad.

Posted In: Pakistan

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