World View : Trading With Tiny Hands : Nepal and many other poor countries have become dependent on child labor.

That chic and sumptuous high-pile carpet that adorns the lawyer’s office in Stuttgart, Germany, or the beachfront condo in Redondo Beach may have begun its life here on a high-backed vertical loom worked by Meena, 13.

Six days a week, the village girl and seven friends, who sleep in a single cramped, dark room in a dirty dormitory whose halls smell of urine, get up at 6 a.m. and, after gulping down a meager breakfast of warm tea, begin work.

Meena, a small girl with straight black hair who is timid as a rabbit, sits on a rough plank, facing her loom. Guided by a chart on which each dye color bears a different number code, she begins to tie strands of triple-ply yarn to make that most luxurious of household items, the hand-knotted carpet.

Her small fingers flying, again and again she ties knots--an average of 60 to each square inch.

At 9 p.m., after hourlong breaks for lunch and dinner that she and her friends have to speedily cook for themselves, the 13-year-old’s workday is over, 14 1/2 tedium-filled hours after it began.

Tomorrow will be much the same for her, hunched over the loom in a long, dim room where the floor is made of filthy bricks and where the only sounds as dozens of youngsters work in silence are the foreman’s cries and the thud of metal mallets swung by the children to pack the knots more densely.

Meena, daughter of peasants from Nepal’s impoverished hills, doesn’t know it, but she is a valuable cog in her country’s economy. Just as the bedrock of the Old South was cotton and tobacco and England’s fortune was spun in the “dark satanic mills” of the Midlands, the Himalayan kingdom of Nepal has come to count on carpets.

And, at the same time, like many other developing countries, this nation has rapidly grown dependent on cheap, easily exploitable child labor. An estimated 160,000 Nepalese children work in carpet mills, sometimes alongside their parents at home looms but often in appalling conditions of servitude little better than slavery, according to the Child Workers of Nepal Assn., a social organization.

“Hand-knotted carpets are made out of the sweat and blood of children,” charges Suman Srivastva, director of an Indian training institute for children freed from bonded labor.

Nepal is not unusual. According to a study just released by the world’s largest trade union federation, 100 to 200 million children ages 4 to 15 work in streets, factories, mines and rock quarries from Brazil to the Philippines--often under dangerous conditions and for a miserable wage or no compensation at all.

The Brussels-based International Confederation of Free Trade Unions, which claims to represent 120 million workers in the United States and 123 other countries, calls such widespread child labor “the best-kept secret” of modern commerce.

All too often, the federation found, minors in developing countries are exploited to make goods that are then shipped for sale to richer lands, including the United States, whose youngest citizens are protected by child labor laws.

In the Philippines, union investigators found, children work up to 24 hours a day in peak season to sew lingerie for a German multinational to sell in Europe at a more than 1,000% markup. In Bangladesh, they reported, 40% of 700,000 garment workers are children, and most of their output is shipped to the United States.

In Pakistan, say activists who oppose child labor, youngsters who work in sporting-goods companies that export field hockey sticks, soccer balls and volleyballs to America may never have any free time themselves to play games. In Peshawar and Lahore, children perform the initial manufacturing work on surgical instruments but have poor access to health care themselves.

With its carpets, Nepal, one of the world’s poorest countries, has scored a coup in overseas markets. Growing from a fledgling industry with a modest initial load of exports in 1964, Nepal’s carpet-makers last year shipped 34.2 million square feet--enough carpets to cover nearly 600 football fields, goal post to goal post--and earned $204 million, or 60% of Nepal’s export income.

Foreign consumers, especially Germans, who buy 80% of Nepal’s carpets, have fallen in love with their warm, muted colors, thick woolen pile and abstract, non-Oriental motifs. From this boom, Meena and other child workers benefit little more than did the Lancashire millworkers of the Industrial Revolution or the antebellum slaves.

In interviews, the young Nepalese said they are paid just enough to buy food, pay rent (their landlord owns the carpet factory) and purchase cloth to make into clothes. For each square meter (about a square yard) of carpet that she ties, Meena is supposed to be paid the equivalent of $7.40. In two weeks, she is lucky to finish a square meter. Abroad, that much of her handiwork retails for $153 to $184, according to factory owner Nyami Tashi Lama.

Brokers scour the countryside to keep the 1,200 carpet factories in Bhaktapur and other Katmandu valley locales filled with small hands, social workers report. Some brokers pay ignorant or gullible parents for the children; others promise to send home a percentage of their wages. Often, no money is sent.

“The bosses prefer children,” said Anju Shrestha, program officer with the Nepal Center for Women and Children Affairs. “Their hands are considered to be defter, and they are more patient.”

Country girls, who are commonly submissive and quiet, are believed to make the best carpet workers of all.

Once in the Katmandu valley, the children often become bonded labor, working long hours for no pay to reimburse a theoretical debt that they or their parents are supposed to owe to the broker or factory owner. “In most cases, they never see the money they are supposed to earn,” Shrestha said.

For Meena, the gap between her wage and the value of what she makes is too abstruse to understand. For this girl who has never been inside a schoolhouse, the high point of the week is Saturday night, when she watches Nepalese movies with the other child workers on their factory owner’s television.

Her back always hurts, she complains, like those of all the young girls, who took precious time from their lunch break one day last month to sit on tattered mats and learn the Nepali ABCs in a room overlooking tangles of drying yarn dyed aqua, violet and teal.

One of Meena’s friends now coughs all night but doesn’t know why. Another has hands that hurt, especially in the winter. Social workers say the children often develop eye problems from having to stare for years at their looms in the twilight of the carpet factories, and cases of premature arthritis are common.

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Laws in Nepal prohibit the employment of children under 14 and limit 14- to 16-year-olds to 36 hours’ work per week. Some government officials or carpet magnates routinely cite such legislation to maintain that, since child labor is illegal, it cannot exist. But it is readily evident that the laws are massively flouted.

N.C. Lamichhane, member secretary of Nepal’s Carpet and Wool Development Board, a quasi-governmental body, adopts a franker approach than most. “We never say we don’t have child labor,” Lamichhane said. “We do. Our study shows it is 11% (of what he said was a 200,000-member work force). That’s due to our poverty.”

It’s also due, he acknowledged during an interview, to government connivance with factory owners over the years to ignore violations of child-labor laws.

In developing societies, it should be noted, child labor has ardent defenders with plausible arguments. Alka Raghuvanshi, arts editor of the Indian newspaper The Pioneer, says: “It is important to remember that child labor, as it is understood in the West, is not applicable in the Indian context. . . . If a child is helping his father on the loom or the wheel, is he or she to be considered child labor?”

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For those who clamor that all children should be educated, Raghuvanshi cites the sad example of the weavers of Andhra Pradesh, who after a few flush years sent their children to school. Even with diplomas, the students couldn’t find jobs, she said. And they hadn’t served the long apprenticeships needed to become top-notch silk weavers. They ended up, she said, making cheap towels and loincloths.

Third World countries also have viewed with suspicion Western campaigns such as the Brussels-based labor confederation’s to eradicate child labor and improve the lot of their work force, considering them a masked attempt to wipe out one of the few advantages they enjoy in an increasingly global economy: low wages.

Finally, in the poorest of countries, for many children, the possibilities outside of employment are often scant. School exists for the lucky few.

“If a child is not employed, it will beg, or lie in the street, or use drugs,” contended Lama, the owner of Meena’s factory, as he stood in the middle of a garage where finished carpets were stacked for export.

Lama thinks the government should supply teachers to instruct children at the factories so that they can learn and earn at the same time. The 2% export tax he has to pay on his carpets could be applied to pay for the program, he suggests.

Nepal’s carpet industry was growing at a feverish rate, reaching 30% to 40% per year, but the breakneck pace seems to have ended this year. One reason appears to be a devastating eight-minute expose aired on German television last April that reported that 90% of Nepal’s export carpets were woven by children working in conditions akin to slavery.

“It’s wreaking havoc,” complained B.P. Khanal, spokesman for the Ministry of Foreign Affairs.

The Carpet Board’s Lamichhane denies that but concedes that export growth has slowed in the last 10 months to about 8%. And he knows his industry has taken a painful public-relations hit.

“The trade is 100% export-oriented. Unless the foreigners buy, we can’t sell,” he says. “And who is buying our carpets? The young generation. And they are very serious about such issues.”

For two years, U.S. diplomats in Katmandu say they have warned the Nepalese that unless they adhere to their own ban on child labor, they could have problems in foreign markets. Mounting consumer awareness is one reason. Another is a bill introduced by Sen. Tom Harkin (D-Iowa), that would ban U.S. imports from industries employing child labor. The bill is awaiting action in the Senate Finance Committee.

Nepalese carpets had been assessed a 5.1% duty in the United States, but since July 1, they have been allowed in tariff-free on the strength of the Nepalese government’s certification that the carpets are indeed made by hand.

American buyers now absorb less than 2% of the Nepali output. Ironically, just as the opportunity dawns for the Nepalese to sell more carpets in the United States, their product may be getting the same politically unsavory reputation that non-union-picked grapes or lettuce once had.

“The Nepalese think this is a problem fomented by their competitors and it will go away,” a U.S. diplomat said with a disbelieving shake of the head.

After the German telecast, the Nepalese Ministry of Labor mounted a loudly advertised crackdown on underage workers, with at least 150 factories reportedly visited by government inspections. “Seventy-five percent of the children employed in the industry have now left,” Lamichhane claimed last week.

Meena and her friends have had a different view of the purported crackdown. When the first government inspector they had ever seen showed up at their factory in early June, “he went right to the office,” the girls said. “He never looked at us.”

As they talked with a visitor to their ABC lesson, one teen-aged mother nursed a baby she would later place in a sling by her loom. Their ramshackle dwelling lay down a dirt road in one of Nepal’s most historic towns, temple-rich Bhaktapur, 10 miles east of Katmandu, where Bernardo Bertolucci filmed some of the scenes for his visually stunning epic “Little Buddha.” Little of that beauty rubs off on the carpet makers’ lives. Their workday world is the factory, the squalid dorm, a solitary water pipe in the smelly courtyard and an outdoor privy.

It is possible that the cycle of child labor that Meena is caught in could continue indefinitely because of Nepal’s poverty and the lack of many real employment alternatives. But Lamichhane is skeptical. Unlike many government officials and carpet manufacturers, who are portrayed by Katmandu-based diplomats as consummate ditherers, the carpet board official dreads the possibility of a Western boycott.

“Our major industries are tourism and carpets,” he says. “If we are not careful, we’ll lose both. We must do something.”

His suggestion, similar to a plan already being implemented in India, is a label certifying that a carpet was not made with the labor of children (that is, children under 14) and that the dyestuffs used are environmentally friendly. The German-Nepalese Chamber of Commerce has endorsed such a plan, and the Harkin bill also has a “child labor-free” labeling scheme.

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In Nepal, however, putting such a project into execution is problematic. Many doubt the government or the factory owners can be trusted.

“We have an agreement already with our buyer that we will have no child labor in our products,” Lama, Meena’s boss, maintains. It’s not clear whether he’s trying to deceive or doesn’t know he has 13-year-olds in his own 150-member labor force. In any event, he was able to ship 80,000 square feet of rugs to Germany last year without any problems.

Meena lives and works with two older sisters, so her life is not as lonely as some children’s. The girls have been home only once in the past year, for a religious festival in October. It took them a day on a bus and two days walking through the hills to reach their native village in the Ramechap district.

Like her friends, Meena would like to go home for good but says she has no other skills besides tying yarn into carpets. At 13, she already seems to be worried about how she will earn her way in the world.

The visitor asks her how she would change life in the factory if she were the owner. The girl is silent a long time.

No, Meena finally says, she can’t imagine being the boss.

Warning: Children at Work

Here are some examples of developing countries that use child labor, as reported by the International Confederation of Free Trade Unions.

INDIA: A quarter of the world’s child labor force is said to be in India. About 1 out of 4 children ages 5 to 15 reportedly are working. The total is thought to be between 17.5 million and 44 million. Legislation in 1986 banned child labor, but some employers openly defy the law.

MEXICO: Children under 14 are banned from working. Children 15 and 16 may work up to six hours a day, provided they don’t work overtime or at night. Enforcement seems reasonably adequate for large and medium-sized companies, but less certain for small ones. There are significant numbers of underage street vendors.

NEPAL: The law allows employment of minors at age 16 in industry and 14 in agriculture, but for not more than 36 hours per week. Some government officials and carpet magnates routinely say that since child labor is illegal, it cannot exist. But it is clear that the law is massively flouted.

PHILIPPINES: The constitution forbids employment of children under 15 except under the responsibility of parents or guardians, and then only if the work does not interfere with schooling. But children as young as 4 were found working in factories. Many children work in the garment industry, making women’s clothing and lingerie for European multinationals.