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Inequity of communism

Inequity of communism

Author: Balbir K Punj
Publication: The Pioneer
Date: May 23, 2002

Our comrades who oppose labour law reforms in India, purposely don't tell their followers how "anti-labour" are the labour laws in communist havens like China and North Korea. Just go through the Beijing government's official publication, Labour Law of the People's Republic of China.

Not a word in the document gives the workers of the communist paradise "the right to strike" -- though Article 3 grants them equality and choice of occupations, etc. Security of job or the right to participate in management are nowhere mentioned. Trade Unions are allowed under Article 7, only for the purpose of negotiating employment terms with employing units. The only stipulation is that wages should not be below minimum -- a law equivalent to our own Minimum Wages Legislation.

This offers a sharp contrast to the labour laws in most democracies, including India, where labour has the right to strike work. It is interesting to observe that while in our Industrial Disputes Act, a worker can be sacked only if he has committed a verifiable breach of discipline (details of which are laid down) Chinese legislation is inclement.

On termination of job, the Chinese law only states that, "a written notification shall be given to the labourer 30 days in advance". Such vague provisions as "a worker found to be seriously violating labour discipline or rules and regulations of the employing unit", or even being a mere subject of criminal investigations, are enough to terminate the services of any worker under Articles 25 and 26 of the Chinese labour law. Nothing is said about who has to prove these allegations and how. In our Industrial Relations Legislations, any charge against a worker has to be proved by an independent inquiry in which the worker will have the right to be present, represented and heard. The procedure here is so strict and pro-labour that many a times, employers have enticed trouble-making workers to quit in exchange of a sumptuous sum rather than fixing a charge against them.

The Chinese law states that the employer can revoke the labour contract if, among other things, the "objective conditions" of the existing contract have undergone a change so that the original contract cannot be fulfilled. If an employer is close to bankruptcy or "runs deep into difficulties in production and management and if reduction of (his) personnel becomes really necessary", all that he has to do is "explain" the situation to the union, report to the administration and then go ahead and close the unit or resize the labour strength as he wants. Compare this with our Industrial Disputes Act under which the employer has to take specific permission of the Government for closure or reduction of staff and pay compensation in case the Government approves of it.

The comrades also hide it from their own followers that in China, there is no specified vacation-length that workers can enjoy as a statutory guarantee. In our case, the law itself says that for 11 months of work a labourer is entitled to one month of paid vacation. Nor does the communist law specify the number of days of casual and medical leaves, unlike as in our country. The same applies to maternity leave and many other service benefits that are yet to become a part of Chinese law.

Communists in India would brush aside these "comparative realities" with a stereotypical reply, that it is systemic difference: Communist China is a welfare state and capitalist India is an exploitative state! They are mistaken -- a politically communist China is economically more capitalist than India. The MNCs, including the ubiquitous Coca Cola and Siemens, have flooded China and employers with the right to hire and fire enjoy greater privilege in China than even back home.

The double-speak that characterises the political lingo of the communists is useful in misleading the working class. Mr Somnath Chatterjee and his ilk tend to gloss over the truth about labour legislation in communist countries when they stall even a reasonable change in existing labour laws here. The historic experience in communist countries has been that labour, instead of being protected, is exposed to various disabilities, and their general standard of living plummets.

Flagging under communist rule, erstwhile East Germany had not half the wages prevalent in West Germany. The terms of unification of the two Germanys were set to grant the East Germans progressive increase in wages over three years so that they could come up to the level of West Germans.

Remember the Poles in 1970s under a repressive communist regime. Finding that the wages they got brought them no goods or services, they revolted. Gdansk shipyard revolt became the flashpoint of a rebellion, which finally ended the communist regime after a protracted struggle of 20 years.

In India as well, the communist-ruled states are the most anti-labour. West Bengal and Kerala are indicative of what may happen to the country if the communists were to ever come to power. There has been a massive flight of capital from these states. West Bengal, where Indian industry registered its genesis one century ago, is in a shambles. Compare the industrial dynamism of the Mumbai-Pune belt with the depressed condition of Kolkata's suburbs. In distant Jamnagar, a huge oil refinery has come up; but in the new port of Haldia, even a petrochemical unit is unable to succeed.

In Kerala, now that Congress-led Government has survived a critical exchequer-position recently, a beginning has been made to create a conducive environment for the new enterprises with Chief Minister AK Antony rolling back the Government employees' strike and agreeing to Asian Development Bank's terms to curb runaway strikes and agitation to secure large assistance to modernise the State.

The Left, by blocking even the moderate reforms suggested by the Centre, is preventing generation of employment. Mao's brand of communism in China failed to generate more industrial employment and had to contend with a low rate of growth. The Chinese economy grew by eight to nine per cent only after the market reforms were introduced under Deng Xiao-ping.

Prime Minister Zhu Rongji of China is an open supporter of the market economy. In Bangalore, during his India trip last January, he had high words of praise for IT-doyen NR Narayanamurthy. Market reforms have pushed FDI in China to 4.7 per cent of its GDP whereas it is a miserly 0.5 in India -- and the communists are running down the Vajpayee Government for its policy of allowing the MNCs to enter the country.

Experience in the US and the UK also emphasises how flexibility in employment and increase in productivity also guarantee jobs. The service industry in the United States, the fastest growing economic sector, is expected to create 20 million jobs during this decade. In the last decade, against some two million jobs lost, four million additional ones were created as labour productivity rose for the first time in the latter half of the 1990s. In India service economy like call centres is estimated to produce 1.1 million high-salary jobs directly in the next few years, and its overall impact on the economy would be enormously positive.

We need to match the productivity of our competitors like Hong Kong, Korea and Malaysia, and their narrow delivery time and high quality. The Left critics of the Government talk about other things but never come round to the point about how to create jobs, and make productivity concomitant with India's potential.

(The writer is a BJP MP and can be contacted at ethtv2@id.eth.net)

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