Anything that results in or perpetuates poverty also encourages child labour. For many years, governments from industrialized countries have been re-engineering their economic systems in order to meet the moneylender's demands.
The World Bank's International Monetary Fund subjects deep-in-debt countries to a Structural Adjustment Programme (SAP), which forces governments to increase exports, privatize schools and health care, and deregulate the industry.
By attracting foreign manufacturers to come and set-up local businesses, these countries must restructure their whole export economy. They promise these manufacturers cheap, non-unionized labour, as well as lax work legislation. The World Bank's requirements have particularly devastating repercussions on the children of poor families.
Numerous industry sectors hire subcontractors for a large part of their production needs. Consequently, large companies save significantly on labour and other general expenses. The local companies must deal with fierce competition when it comes to securing contracts, so they look for the cheapest possible labour force: children. Some of the very large and profitable companies in the world refuse to take responsibility for the subcontractors' business practices.
Poverty, performance leveling, technology, an expanding informal economy, and the International Monetary Fund's re-engineering requirements are the "new world economy" factors that have contributed to the increase in child labour.
Why do these children work?