Dynamic factors affecting the role of labour standards in national competitiveness
Developing countries should avoid the outdated conventional wisdom that they must choose between national economic development and workers’ welfare. In fact, many non-democratic states appear to hide their political motivations for suppressing unions and worker rights behind the pretext of national development. Policy interventions should be based on maximizing the positive economic effects of labour standards and minimizing the negative effects, particularly in terms of productivity enhancement. The arguments in Chapter 4 concerning the positive economic effects of labour standards on the economy are closely related to the dynamic analysis here regarding human resource development (HRD) and its contribution to national competitiveness in global trade. In particular, as this chapter will show, higher labour standards in development lead to higher productivity and other joint gains (or win-win outcomes) in world trade, providing that economic development is seen as a long-term, dynamic process.