Tuesday, October 02, 2012

Drought and flooding could lead to bonded labor in Pakistan

When Muhammad Yunus began his micro-credit Grameen Bank in the 1970s it was in response to the unfair practices of moneylenders in his native Pakistan. The moneylenders would loan money to the poor at high interest rates. If the poor couldn't repay, they would become bonded laborers for the moneylenders.

The problem still exists today, but something has since changed to make it harder for the poor to repay... the effects of climate change. The poor farmer would hope that a good crop would give him enough money to repay the loans. Now repeated floods and droughts have doomed more poor farmers into default.

From Reuters Alert Net, writers Saleem Shaikh and Sughra Tunio describe the how the fortunes have changed for many farmers.  
“Because,the agriculture and livestock farming families were still recovering from the heavy damages (caused by last's year's devastating rains) to crops and livestock, this year's drought conditions have multiplied economic and health miseries and sufferings of these pastoral and nomadic families,” said Ali Akbar Rahimo, executive director of the Association for Water, Applied Education and Renewable Energy (AWARE), a not-for-profit local NGO in Tharpakar and adjoining districts.
Tharparkar’s deputy commissioner, Tahir Memon, said this year’s drought has left many families with massive financial losses, particularly if their loans came from private moneylenders.
Generally, farmers procure fertiliser, seed and other farm inputs on credit each year from local moneylenders and sell some of their crops to clear their loans if there are good rains. Those who cannot often default, and many defaulter families end up in bonded labour at brick lins, or working in factories, shops,  or the houses of moneylenders.
Because of the absence of formal government-run lending facilities, most farming families in Tharparkar district are at the mercy of moneylenders, whose inflated interest rates can keep poor families trapped in debt for decades. 
Drought in Tharparker is also worsening health problems in the district, as people and animals too weak to migrate turn to drinking contaminated water, officials said. Pregnant women and young babies are particularly hard hit.

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