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Gender Equality & Trade Policy

Gender Equality and Trade Policy
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VII. The Global Economic Crisis and its Impact on Trade and Gender Equality

The recent global economic crisis has had distinct impacts both on trade and gender disparities among countries. This crisis significantly affected the balance of payments of developing and developed countries alike and created severe financial instability worldwide. The contraction of world merchandise trade in 2008–2009 was sudden, deep, generalized and synchronous. The magnitude of trade contraction was the largest in the post-war period and was mainly due to an abrupt and sharp reduction in global demand. The crisis affected the trade in services and in merchandises, differently. Fluctuations in services exports exhibited less synchronicity across countries, experienced lower magnitudes of decline, and recovered more completely.(see note 84)

Expansionary counter-cyclical policies such as fiscal stimulus packages and investments in large-scale social protection systems by many countries were important in fostering recovery, but the current improvement remains fragile and uneven. The return to growth is driven by developing countries, particularly emerging economies with strong demand, such as China and India, and the resurgence of world trade. (see note 85)

While the volume of exports of many emerging economies has already recovered to, or beyond, pre-crisis peaks, exports of developed countries have not yet seen a full recovery. World trade is expected to grow by about 6.5 per cent in both 2011 and 2012, moderating from the 10.5 per cent rebound in 2010.(see note 86) Increased exchange-rate instability among major reserve currencies has however given rise to new trade tensions. There is a serious risk of competitive devaluations that could harm global trade growth, which until now, has been critical to the recovery of the world economy.(see note 87) Rising of oil and food prices may also jeopardy global recovery.

The decline in international trade in 2008-2009 has had direct negative repercussions on women employed in export-oriented industries, particularly in the textile and agriculture sectors.(see note 88) Women also tend to lose jobs first, due to their higher share of employment in part-time, low-skilled and temporary jobs.(see note 89) Furthermore, women tend to have fewer reserves than men to shield themselves from the negative consequences of a drop in income, since their wages are lower than those of men.(see note 90)

The formal economy suffered the most severe blows in the crisis. The unemployment rate has been exceptionally high and is persisting in the recovery phase. While some workers employed in the formal sector were able to avail themselves of unemployment benefits, the high unemployment in the formal sector has forced many into the informal economy. Women in the informal economy of developing countries have encountered increasing competition from unemployed male wage workers moving in this often female-dominated sector, a factor which, combined with the decrease in global demand, has led to the demise of the weakest and poorest informal women-run businesses.(see note 91)

Despite clear signs of recovery, the need to strengthen social safety nets to help the most vulnerable groups of people is still pressing. Concerns exist that improved productivity during the recovery could also result in higher unemployment as companies re-organize their production to save costs. These trends underline the need for policy responses to address the linkages between trade and employment, the increasing poverty and inequality within and between countries, and the disparities in economic opportunities between men and women.

The severe decline in national budgets also affects the availability of public services, resulting in additional expenses for the households and in further burdens for women as primary caregivers within the family.

Therefore, the economic recovery has to encompass a “human and gender- sensitive recovery” and a social protection component to restore lost jobs and income opportunities while strengthening social safety nets to help the most vulnerable groups of people, including women.

Trade-employment linkages: the ILO Global Job Pact

A High-level Segment Ministerial Roundtable on “The Global Jobs Pact: Crisis Recovery through Women’s Economic Empowerment”, co-organized by ILO and UNDP in June 2010, discussed how several countries had mitigated the effects of the crisis on women. ECLAC and ILO noted that even though most of the measures implemented by governments in Latin America and the Caribbean to address the crisis had not explicitly promoted gender equality, the protection of incomes of the most vulnerable workers indirectly benefited women who make up a large proportion of such workers.

Other policies specifically targeted women, opening up occupational opportunities by encouraging women’s employment or setting up quotas to ensure that women benefit from employment support programmes. Policies that expanded public social and care infrastructure also had a positive impact on gender equality since they generated employment for women in the medium term and increased the supply of services, leading to a more equal sharing of domestic responsibilities in the long run.

As the global economy emerges from the economic crisis, recognizing the gender distinct impacts of the crisis and incorporating gender considerations into all policy responses will ensure that both men and women are re-integrated into economic activity in more equal terms and equally benefit from the recovery. The social and economic benefits of inclusive economic growth dynamics will help to build stronger and more equitable societies and economies.


84 UNCTAD (2010a). Evolution of the international trading system and of international trade from a development perspective: The impact of the crisis-mitigation measures and prospects for recovery http://www.unctad.org/en/docs/tdb57d3_en.pdf

85 Ibidem.

86 United Nations (2011). World Economic Situation and Prospects 2011, http://www.un.org/esa/policy/wess/wesp.html

87 UN/DESA. Monthly briefing World Economic Situation and Prospects, No. 24, 6 October 2010, http://www.un.org/esa/policy/publications/dpad_wespmbn.html

88 Swaziland reported an increase in unemployment in the textile sector where women are the most affected. In Cambodia, unemployment has increased in the garment industry and tourism, after having hit the construction and real estate sectors and their mainly male workforce. The garment industry in Cambodia, the key export sector, has laid off 30,000 workers, which corresponds to 10 percent of the workforce. Between October and December 2008, over 500,000 jobs were lost in export-oriented sectors in India, these being gems and jewelry, automobile industry and textiles. In Ho Chi Minh City in Vietnam, 65 percent of the 31 companies dissolved in 2008 were textile-garment firms. The devastating impacts of the crisis on employment in the export sectors are still unfolding. UNDP (2010). The current economic and financial crisis: A gender perspective, pages14-15, http://content.undp.org/go/cms-service/stream/asset/?asset_id=2560964

89 In Brazil, the manufacturing sector was the hardest hit sector early in the crisis. Yet, although manufacturing is a field strongly dominated by men, proportionally speaking, women lost more jobs in this sector. Disaggregating data by economic activities shows that the largest relative declines in female employment occurred in the following sectors: mining and processing; manufacturing; and electricity, gas and water production and distribution, as well as in commerce, and repair of vehicles and personal objects. Black women were the worst affected (9.9 percent), compared with white women (7.7 percent). In other words, the crisis accentuated the pattern of white, male domination in Brazilian industry. Brazil Gender Equality Observatory (2009), Impact of the Crisis on Women, page 45, http://www.observatoriodegenero.gov.br/menu/publicacoes/impacto-da-crise-sobre-as-mulheres-versao-bilingue/view

90 United Nations (2009). World Survey on the Role of Women in Development: Women’s Control over Economic Resources and Access to Financial Resources, including Microfinance, ST/ESA/326

91 Ibidem.

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