economic policy employment house would make raising business and labour standards

Developing nations are plagued with corruption as well as desperate economic situations and are often in competition with each other in exporting whether that is manufacturing for slightly richer countries of South East Asia or natural resources in Africa.  In the context of such an economic rat race, it would be unfair to impose a western standard on these countries. An increase in standard is not a cheap process as it increases the costs of labour and will stretch resources resulting in cutting back the number of jobs and hence will increase unemployment and poverty just as happened in many Latin American countries [1] . It is better to employ many and provide some means of sustenance to all, as will happen with very low wages and standards, rather than employ less and give (relative) luxury to a few. Developing nations that have lower labour standards can gain a comparative advantage in trade: the lower the cost of the industry, greater the turnover of the industry. [2]  [1] Stern, R. and Katherine Terrell, ‘Labor Standards and the World Trade Organization’, Discussion Paper N 499,2003   [2] ‘The benefits of International Labour Standards’, International Labour Organisation,

International labour and business standards go hand in hand with development standards and will de facto increase implementation levels  What are international labour and business standards? They are globally acceptable methods of doing business and employing labour. These include Conventions Against Forced Labour [1] , Discrimination [2] and Child Labour [3] . These also form guideline structures for social policy such as labour dispute resolution bodies, employment services and good industrial relations. Therefore, this goes hand in hand with reducing poverty and increasing the standard of living of the employees, and hence the standard is a facet of development in itself. This helps in achieving the goals of a stable long term plan for economic growth as well paid workers are necessary for consumer spending. Employing higher standards would be a way to tackle the problems with distribution of aid at the grassroots and increase efficiency within the system organically. [4]  The poorest countries invariably have the lowest standards of labour and business. It is essential to raise these standards to an international level, implementing standards against practices like child labour. If this is done then the purpose of development aid, which is to increase the day to day standard of living of the people, will improve. In an absence of such a pre-requisite, a developing country will be free to employ standards that do not reflect the same principles of the donor nation. Thus, to avoid a hypocritical scenario, this pre-requisite is necessary.  [1] C029 - Forced Labour Convention, Adoption: Geneva, 14th ILC session, 28 June 1930,   [2] International Labour Office, ‘Discrimination (Employment and Occupation) Convention’, International Labour Organisation, 1958 No.111,   [3] ‘ILO Conventions and Recommendations on child labour’, International Labour Organisation,   [4] ‘How International Labour Standards are used’, International Labour Organisation,

This is a common logical fallacy. With limited resources, there is a limited bandwidth within which one can stretch the standard above the capable standard. It is not favourable to increase this gap too much for then it is not realistic. Many countries have ratified ILO Conventions but not implemented any of it. [1] For example India has ratified both ILO core conventions on discrimination but domestic laws have not managed to curtail the widespread discrimination on the basis of caste, particularly for being a Dalit, gender, and ethnicity. [2]  It is important that the standards not only need to be raised, but rather the current standards need to be implemented better – which means a stricter hand to the current regulations.  [1] Salem, Samira and Rozental, Faina. “Labour Standards and Trade: A Review of Recent Empirical Evidence” Journaln of International Commerce and Economics. Web Version August 2012.   [2] ‘India Hidden Apartheid’, Center for Human Rights and Global Justice, Human Rights Watch, February 2007,  P.80

When developing countries employ poor labour standards, other countries follow the example in order to be competitive  As long as developing nations constantly keep employing poor labour standards, it will keep putting a strain on the global economy. This is because other countries will be pressured to do the same just to remain competitive. This creates a race to the bottom effect and would create “poor conditions and loss of freedom in the global South, and causes workers in the global North to lose their jobs to cheap outsourced labour”. [1] Higher labour standards in developing countries therefore also benefits developed countries. However the converse is also true; labels like ‘fair trade’ provide a guarantee of ethical quality and show that consumers are willing to pay more to ensure good labour standards.  [1] ‘Changing Global Trade Rules’, International Labor Rights Forum,

Labour standards are necessary to protect basic human rights  Labour and business standards are a cornerstone of agreement on universal human rights between various international actors and so it is right that they should be linked to aid. In 1998 the ILO Declaration on Fundamental Principles and Rights at Work were adopted and are considered binding on all members regardless of whether they have ratified the conventions. [1] The business and labour regulations protect the basic worker rights and improve job security through demanding the elimination of discrimination and empower workers through the recognition of “freedom of association and the effective recognition of the right to collective bargaining” [2] like in those in developed western countries. This then provides a minimum standard and aid should only be given to those that ensure those minimum standards they have signed up. It would also help compliance to prioritise those who go further in their protections of labour when it comes to receiving aid. It should be remembered that there has been general acceptance of international labour standards not just for human rights reasons but also because having minimum standards is beneficial economically – for example a 40 hour working week is more productive per hour than a 60 hour week. [3]  [1] the ILO Declaration on Fundamental Principles and Rights at Work, ‘About the Declaration’, International Labour Organisation,   [2] ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up, Adopted by the International Labour Conference at its Eighty-sixth Session, Geneva, 18 June 1998 (Annex revised 15 June 2010),   [3] Robinson, Sara, ‘Bring back the 40-hour work week’, Salon, 14 March 2012,

Not all standards benefit human rights and some could even undermine individual’s most basic human rights such as that to sustenance and shelter. Standards combating child labour, for example, could be misguided. In many developing countries, child labour is an important source of income for children’s food and education.  Holding to the ILO’s convention on child labour would therefore affect families’ and children’s income and development opportunities. Since child labour is dependent on level of economic development, developing countries should work on combating poverty before reducing child labour. India implemented most international standards, including the convention for child labour. However, research has found that children working full time have better chances of making it to adulthood than those who work less, because they’re better fed [1] . Children’s physical wellbeing will often therefore benefit from being allowed to work.  Rather than imposing labour standards the way to end such practices is to provide incentives that pay for parents to send their children to school as with the Bolsa Familia in Brazil. [2]  [1] Cigno, Alessandro, and Rosati, Furio C., ‘Why do Indian Children Work, and is it Bad for Them?’, IZA Discussion paper series, No.115, 2000,  , p.21  [2] Bunting, Madeleine, ‘Brazil’s cash transfer scheme is improving the lives of the poorest’, Poverty Matters Blog guardian.co.uk, 19 November 2010,

This is similar to the debate of imposing uniform carbon emission caps on all nations. This would be unfair as the developing world would be at a disadvantage as it takes away one of the ways in which poorer countries compete effectively in the global market; through having lower prices as a result of those lower standards. That is why keeping lower standards that are more easily met is better than having an unachievable and unfair standard.

Strategic interests can be put to risk by such pre-requisites. Donor nations have strategic interests when awarding aid, which ensure that future trade relations are well secured (such as United States and the Middle Eastern oil states). This is why aid goes to countries that often have links with the donor.  If there are too many conditions attached and when the developing countries cannot meet them these countries will go elsewhere. China is increasingly a competitor in giving aid and overtly at least ties in far fewer conditions into the aid they give. Sudan was cut off from aid programmes due to its internal conflict, but China invested in development projects without asking for any conditions [1] .  [1] Zafar, A. "The Growing Relationship Between China and Sub-Saharan Africa: Macroeconomic, Trade, Investment, and Aid Links." The World Bank Research Observer 22.1 (2007): 103-30.

Increasing a standard, even if not as high as the donor would want, increases the standard of the present situation  Increasing the required standard of business and labour will result in increases to the current standard labour and business standards even before aid is entirely tied as countries implement changes to ensure they get the most possible aid. Simply setting an expected level of labour and business standards will therefore create improvement in those standards. In the case of the Decent Work Country Programme for Bangladesh 2006-2009 Bangladesh has been implementing the program due to its positive benefit towards achieving the millennium development goals. This is despite challenges such as the lack of employment opportunities in the country. The programme has been successful in improving social protection, working conditions and rights for female, male, and children workers in a few sectors and areas [1] .  [1] International Labour Organization, Bangladesh: Decent Work Country Programme 2012-2015, 2012

Historically the donor of Foreign Aid has always set down pre-requisites  When a donor nation parts with foreign aid for development to a nation, it must always choose who it prefers to give it to as there is a limited pot of money to donate there needs to be a way of allocating it. It is not surprising therefore that countries with shared colonial histories tend to dominate aid flows, thus Britain has historically given most aid to countries that were its colonies; in 1960 Malta and Cyprus received most, while India was the biggest recipient for much of the rest of the 20th Century. [1] Further, often countries offering aid, such as the US, the UK, and the EU, require the pre-requisite of democracy or the start of a democratisation process. Therefore, it is justified to add a pre-requisite for better standards of business and labour as it helps implementation, and principally meets the goals of the developmental aid itself. [2]  [1] Provost, Claire, ‘UK aid: where does it o and how has it changed since 1960?’, Datablog guardian.co.uk, 14 April 2011,   [2] Dollar, David and Alesina, Alberto. “Who Gives Foreign Aid to Whom and Why?” Journal of Economic Growth, Volume 5, No. 1(Mar., 2000).

The concept of a nation’s sovereignty is losing weight against the rights of a global citizen. Citizens everywhere in the world should be able to enjoy equal standards of employment and not suffer at the hands of a nation’s neglect. The rights of a nebulous entity such as the state should not be equated with the much more vital rights of individual workers to humane standards of treatment and good working conditions.

Achieving development at the cost of principles of development is not acceptable. The means by which you achieve development is equally important, and will remain integral in the principles and priorities of a nation once it achieves developed status. The road is as important as the destination! Building the economy on poor labour standards is building on unstable ground as those jobs will simply move as soon as costs rise in any way.

There is nothing wrong with individualised standards. It is the question on implementing them better and not raising standards  The chances that these international labour standards are even relevant to these developing nations are low. For example, India need not ratify the two core conventions on protecting trade union rights because these are rights that pertain to workers in formal employment. A majority of India’s workforce is not in formal employment, and hence not covered by any legal provisions. Similarly in many developing economies a large portion of the workforce is engaged in subsistence farming, something that labour standards are never going to apply to as those involved will do whatever they need to in order to get by. Therefore, there needs to be a different standard applied to the situation specific problems. What needs to be recognised is how no to low labour standards in developing countries can be a significant improvement over the only alternative that was previously available; subsistence farming. One size fits all does not work in such a diverse global economy and donors should recognise the benefits of helping development to bring people out of subsistence farming.

There is uneven implementation of labour standards even in western countries  Western countries often do embrace high levels of labour standards or do not follow their labour regulations. Germany for example has no minimum wage [1] while the USA has no legal or contractual requirement to provide minimum amounts of leave. [2] Moreover it is the demand for the cheapest possible products that drives down labour standards worldwide. If western nations truly want to change labour standards then the way to do it is with the consumer’s wallet not the aid chequebook. British clothing retailers such as Primark are often shown to be buying their products from sweatshops that use illegal workers, and exploit their labour [3] . If there is to be real lasting change in labour standards western firms need to be the ones pushing high labour standards and consumers would need to not automatically go for the cheapest product available.  [1] Schuseil, Philine, ‘A review on Germany’s minimum wage debate’, bruegel, 7 March 2013,   [2] Stephenson, Wesley, ‘Who works the longest hours?’, BBC News, 23 May 2012,   [3] Dhariwal, Navdip. "Primark Linked to UK Sweatshops." BBC News. BBC, 01 Dec. 2009. Web.

Development has many facets of which pure economic growth is a priority, especially in the context of a developing nation  It is a nation’s own sovereign decision to decide its own standards and pace itself. It is a sovereign right of self-determination of a nation to freely comply or refuse to comply with international standards. It is unfair to back a developing nation up against a wall and force them to ratify higher standards in return for aid.  It is notable that the countries that have developed fastest have often been those that have ignored the whims of the aid donors. The Asian tigers (Singapore, Hong Kong, South Korea, Taiwan, later followed by South East Asia and China) did not receive aid, but preserved authority over their developmental policies. Their success story does not involve the international labour standards and goes against many of the policy prescriptions, such as free trade, of international institutions, such as the World Bank and the ILO [1] . This shows that nations that follow their national interest rather than bending to the whims of donors are the ones that ultimately do best economically. These states only implement labour standards when they become beneficial; when it is necessary to build and maintain an educated labour force.  [1] Chang, Ha-Joon, “Infant Industry Promotion in Historical Perspective – A Rope to Hang Oneself or a Ladder to Climb With?”, a paper for the conference “Development Theory at the Threshold of the Twenty-first Century”, 2001,

Universal standards of labour and business are not suited to the race for development  Developing countries are in a race to develop their economies. The prioritisation of countries that are not currently developed is different to the priorities of developed countries as a result of their circumstances and they must be allowed to temporarily push back standards of labour and business until they achieve a level playing field with the rest of the world. This is because economic development is a necessary precondition for many of the kinds of labour standards enjoyed in the west. For there to be high labour standards there clearly needs to be employment to have those standards. Undeveloped countries are reliant upon cheap, flexible, labour to work in factories to create economic growth as happened in China. In such cases the comparative advantage is through their cheap labour. If there had been high levels of government imposed labour standards and working conditions then multinational firms would never have located their factories in the country as the cost of running them would have been too high. [1] Malaysia for example has struggled to contain activity from the Malaysian Trades Union Congress to prevent their jobs moving to China [2] as the competition does not have labour standards so helping keep employment cheap. [3]  [1] Fang, Cai, and Wang, Dewen, ‘Employment growth, labour scarcity and the nature of China’s trade expansion’,  , p.145, 154  [2] Rasiah, Rajah, ‘The Competitive Impact of China on Southeast Asia’s Labor Markets’, Development Research Series, Research Center on Development and International Relations, Working Paper No.114, 2002,  P.32  [3] Bildner, Eli, ‘China’s Uneven Labor Revolution’, The Atlantic, 11 January 2013,

It is irrelevant that some western countries do not always meet the highest labour standards; does it matter that Germany does not have a national minimum wage when there are minimum wages for each sector? These are countries where one labour standard can be sacrificed because the pay and standards elsewhere are much higher.  Of course consumers should be supporting attempts to increase labour and business standards but this is hardly exclusive; there is little reason for aid donors not to be demanding high standards at the same time as consumers are.

Individualised standards can be dangerous. International standards could be set at a minimum level on which every country could add measures tailored to its needs as is the case with the Declaration on Fundamental Principles and Rights at Work. Countries tend to ignore the importance on long term development and concentrate on plans for relatively short term success. By neglecting important issues countries suffer because they wake up when the issue at hand is too large to handle. For example, China’s economy has grown tenfold since 1978 but at the cost of great environmental damage. China now hosts 16 of the 20 most polluted cities of the world. The country has also landed itself with over 70% of its natural water sources polluted and is now the largest emitter of greenhouse gases. [1] Encouraging greener development earlier would have helped prevent this problem.  [1] Bajoria, Jayshree, and Zissis, Carin, ‘China’s Environmental Crisis’, Council on Foreign Relations, 4 August 2008,