labour reform

At the Bharat Forge factory in Pune, vast hangars are filled with huge machines heating and shaping metal. But there are very few workers around – perhaps a good thing given the sweltering heat.

A population of over 1.2bn supposedly gives India a ‘demographic dividend’ but at the country’s biggest manufacturer and exporter of automotive components, the talk is of a shift to high tech manufacturing rather than labour intensive processes. 

The global mining industry could hardly be accused of being introspective. It’s a tough business, all about grade, costs and prices. Everything else is secondary. Nowhere has this attitude been more apparent in the past than at the annual Africa Mining Indaba in Cape Town.

This year, the obligations of the industry as a development partner were front and centre in the main auditorium; the debate was as much about people and politics as it was about mining. The agenda has clearly changed. 

Despite a big round of minimum wage hikes, Indonesia’s manufacturing belt hasn’t seen the end of the recent wave of labour disputes.

Wednesday witnessed the latest in a series of mass protests organized in recent weeks in Jakarta by workers’ unions complaining about “outsourcing”— local lingo for taking on temporary workers without the additional cost of providing healthcare and pension benefits. 

A few months ago, Alexandre Tombini, governor of Brazil’s central bank, told beyondbrics that Brazil was finally “going horizontal”. Enough of picking winners and piecemeal, ad hoc measures, he said: it was time for across-the-board reforms that would deliver a more efficient economy and a level playing field for all.

So much for that. Back in the present day, Guido Mantega, optimist and finance minister, on Tuesday announced cuts in payroll and other taxes and a special line in finance for the construction industry. After Friday’s shocking GDP figures, it looks like a knee-jerk effort to get the economy moving – or at least its most labour-intensive sector. 

What to make of Mexico’s new labour law, which finally met with approval from the country’s Senate this week and is expected to be signed into law any day now?

Read some of the international coverage, and you might form the idea that the law is a watered-down initiative that fails to open up the dark and murky world of Mexico’s powerful unions. And you’d be right – sort of. 

The incoming Mexican administration of Enrique Peña Nieto has been providing more details of its plans for reform, both before and after it takes office on December 1.

The labour reform is already winding a slightly laggardly way through the Senate having passed through the Lower House a few days ago. It was initiated by the outgoing president, Felipe Calderón, but with what appears to have been a generous nod and a wink from Peña Nieto. 

Despite a clamour of protests by leftwing legislators and street protesters, most foreign investors are likely to be heartened by Felipe Calderón’s undoubtedly diluted labour reform in Mexico.

So said Rogelio Ramírez de la O, who was the chief adviser in economics to none other than Andrés Manuel López Obrador, the left’s defeated candidate in the recent presidential election.