The Financial Crisis, Trade and Effects on Women

Transcription

1 The Financial Crisis, Trade and Effects on Women Richard Newfarmer Special Representative to the UN and the WTO World Bank Geneva March 4, 2009 With thanks to the organizers: International Trade Centre (ITC) and Geneva Women in International Trade (GWIT) This presentation was prepared with Patrick Reichenmiller (EXTGE) based on materials from Gender Department in Poverty Reduction and Economic Management VP of the World Bank 1

2 Recession is fast becoming global and deep Real GDP, percentage change % change Forecast Developing countries High-income countries Shape of the coming recession: U or L? Source: World Bank, adapted from Global Economic Prospects, 2009?

3 Trade is like likely contract, for the first time since 1982 Percentage change Annual growth of global trade volumes Source: World Bank, Global Economic Prospects, 2009

4 Impacts 4

5 The crisis has first and second round impact on women and families Drop in aggregate emand/ exports Impact 1: Loss of employment Tightened credit markets Drop in remittances Impact 2: Fall in MFI lending resources --and loss of unemployment Drop in household income. Increased risk of poverty Impact 3: Vulnerable hhd coping strategies ood price shocks First round impacts Second round impacts

6 Impact 1: Women workers in export industries lose jobs Thailand Fruits 80% Export Manufacturing Country Industry % of workforce female Malaysia Garments 78% Bangladesh Philippines Garments Electronics 85% More than 50% High Value Export Agriculture Country Industry % of workforce female Uganda Cut flower 85% Ecuador Cut flower 70%

7 mpact 2: Tightening credit markets can squeeze MFI loans to women producers MFIs typically lend to women: Over 3,330 MFIs reached 133 million clients in million of the clients were among the poorest when they took their first loan 85% of these poorest clients were women

8 Impact 3: Household Coping Strategy Households pull girls (and boys) out of school Low income countries: Madagascar (fall in ag income) girls more likely to drop out of schools. Cote d Ivoire (drought) enrollment decreased 11 ppts for girls and 14 ppts for boys. Middle income countries: Mexico (peso crisis) girls attendance fell by 8%, no impact on boys. Peru (1980s crisis) no impact on school enrollment for either girls or boys, schooling increased.

9 Reasons to focus on polices that affect women transfers to women have larger effects on children s health than similar transfers to men. % change in child's anthropometric measure Children s weight for height Woman's income Children s height for age Man's income Children s height for age Brazil Bangladesh South Africa Source: Thomas (1990) for Brazil, Khandker (1998) for Bangladesh, and Duflo (2003) for South Africa.

10 and because the effect of female borrowing on household welfare is larger than the effect of male borrowing (e.g. Bangladesh) 1 Impact of a 10% increase in borrowing from Grameen Bank Percentage change Per Capita HH expend. Women's Labor Supply Girls' height for age Borrowing by Women Borrowing by Men

11 Policies that make a difference to women: Mapping impacts of the crisis to policy Impacts Policy/programs Women s s employment Women s s participation in trade Macro policies for growth Employment generation programs Trade finance Enabling environment Women producers Women and girls human development Expansion of microcredit Agricultural credit Cash transfer programs Other social safety net programs

12 World Bank Response to the Crisis Policies to rekindle growth and trade Increasing financial support for poor countries Substantially increasing IBRD lending ($100 billion over next 3 years) Fast-tracking tracking IDA funds ($42.5 billion over next 3 years) Food crisis response Shoring up the private sector: $30 billion over next 3 years Ensure trade flows Bolster distressed banking systems Keep infrastructure projects on track Other support: Ensuring liquidity (MIGA) Technical analysis, advice, and diagnostic tools

13 World Bank Efforts: Gender equality as smart economics World Bank Group s Gender Action Plan Supports actions to expand women s economic opportunities in product, credit, land and labor markets, and in infrastructure investments. Bank now incorporates gender in 90% of health and education projects Gender assessments in 46 countries and in nearly all poverty assessments Increasing focus in finance, infrastructure, and private sector projects World Bank Group s Six Commitments on Gender Equality 1. Integrate gender equality into agricultural and rural development projects 2. Channel $100mn in credit lines for women entrepreneurs through the IFC by Report on progress on empowerment of girls and women in country by June 1 4. Advance public-private partnerships on adolescent girls economic opportunities 5. Create a Private Sector Leaders Forum to support the Gender Action Plan 6. Increase IDA investments for gender equality based on a review of the IDA-15 cycle Multi Donor Trust Fund for Trade and Development Studies to understand the gender dimension of trade (e.g., Afghanistan) IFC s Doing Business Project on Opportunities for Women

14 Making regulation more business-friendly can make the investment climate more women-friendly Source: Doing Business database, ILO Female Entrepreneurs (% of entrepreneurs) Female unemployment (% of male unemployment) 40% 30% 20% 10% 0% Easiest Most difficult Easiest Most difficult Countries ranked by ease of doing business, quintiles

15 Starting a business can be even harder for women DRC different rules Uganda women disproportionately disadvantaged by cumbersome procedures (less mobile, fewer contacts, seen as soft targets by officials) Enterprises that Responded Government Officials have "Intefered" with their Businesses 50% 40% 30% 20% 10% 0% 43% 25% Female-headed Enterprises All Enterprises

16 eforming trade-related institutions can help women Women perceive tax and customs as greater constraints to business growth % Tax rate Tax Administration Customs Perceived Barriers to Business Growth Women Men Source: Ellis et al. Gender and Economic Growth in Kenya, 2007

17 nd providing financial services to women can promote their contribution to growth Banking profile in Tanzania Total Men Women Currently banked (2006) Previously banked Source: Finmark Trust 2007

18 Conclusions The financial crisis will hurt everyone, and probably affect women more adversely than men. Effects on women and children, if ignored, will both increase current poverty and imperil future development. Effective policy responses should focus on those policies that can help women most and build on women s roles as economic agents.

19 References and Further Reading bu-ghaida, Dina and Stephan Klasen (2004), The Costs of Missing the Millennium Development Goal on Gender Equity, orld Development, Vol. 32 (7), pp uvinic, M., Guzman, J. and C. Lloyd (2007), Gender Shapes Adolescence, Development Outreach 9(2): uvinic, M. (2009), The Global Financial Crisis: Assessing Vulnerability for Women and Children, Identifying Policy esponses, Working Paper PREM Gender and Development, World Bank. ord, L., Verhoeven, M., Blomquist, C. and B. Rijkers (2009), The Global Economic Crisis: Assessing Vulnerability with a overty Lens, PREM Policy Note, World Bank. llis, A. (2007), Sub-Saharan Africa Gender on the Agenda for Shared Growth, Presentation Doing Business 2008, ternational Finance Corporation, Washington, D.C. orrison, A., Bott, S. and M. Ellsberg (2005), Preventing and responding to gender-based violence in middle and low-income ountries: A global review and analysis, Policy Research Working Paper, World Bank. olotaroff, J. and L. Fort (2008), Operationalizing Country Gender Assessments: Lessons from Afghanistan, Presentation outh Asia Social Development & Gender Seminars Series, World Bank, Washington, D.C. wamy, G. (2004), The Impact of International Trade on Gender Equality, PREM Policy Note, World Bank. dry, C., Hoddinott, J., Alderman, H. and L. Haddad (1995), Gender Differentials in Farm Productivity: Implications for ousehold Efficiency and Agricultural Policy, Food Policy 20: orld Bank (2006), Equity and Development: World Development Report 2006, World Bank, Washington, D.C. orld Bank (2006), Gender Equality as Smart Economics: A World Bank Group Gender Action Plan, Fiscal Years , orld Bank, Washington, D.C. orld Bank (2007), Confronting the Challenges of Gender Equality and Fragile States: Global Monitoring Report 2007, World ank, Washington, D.C. orld Bank Group (2008), Doing Business: Women in Africa, World Bank-IFC, Washington, D.C.

20 The Financial Crisis, Trade and Effects on Women Richard Newfarmer Special Representative to the UN and the WTO World Bank Geneva March 4, 2009 This presentation was prepared with Patrick Reichenmiller (EXTGE) based on materials from Gender Department in Poverty Reduction and Economic Management VP of the World Bank 20