Inter-Agency Network on Women and Gender Equality, IANWGE
Day of Dialogue on Gender and Finance for Development 
United Nations, February 25, 2002

Organized by the Inter-Agency Network on Women and Gender Equality 
Task Force on Gender and Financing for Development

Talk by Professor I. Bakker York University Toronto, Canada

Thank you for this opportunity to contribute to the FfD dialogue. In the short time that I have today, I'd like to organize my remarks around three questions:

  1. First, why is a gender perspective important for understanding and improving the FfD agenda?
  2. Second, have discussions of gender been adequately mainstreamed into the finance for development framework? If no, then how can a gender perspective be taken further? 
  3. Finally, can we make such a framework more accountable to gender equality goals? In other words, can we rebalance global economic governance to meet the needs of all stakeholders?

Now of course each of these questions is very large, so in what follows I'll simply try to raise some of the issues that we might consider in our discussions today. I do so building on the work of people who had regional dialogue is and those who have worked on background papers, such as Professor Maria Floro of the American University.

Let me turn to the first question: why is a gender perspective important for the FfD Agenda?

The gender dimension represents a commitment to developing financial mechanisms and outcomes that meet outcomes that are in line with overall development goals including gender equality. Key issues included the potential of all groups in society, including both women and men, to influence, participate and benefit from all economic development. New work on macroeconomics shows that in many instances, economic development policies formulated without gender awareness would not only worsen gender inequalities, but also make it harder to achieve macroeconomic goals such as growth. There are also instances where growth may be achieved at the expense of gender equality. So a gender perspective asks: does the finance for development agenda increase, decrease, or leave unchanged gender equality goals?

One example referred to in the Monterrey Consensus are gender -responsive budgets, that relate to the mobilization of financial resources at the national level. Here it has been shown that, efficiency gains can be realized through the improved targeting that results from gender responsive budgets. This avoids what in the language of economics are called 'false economies' - by this I'm referring to attempts to reduce or contain financial costs in one sector such as health care by transferring actual costs and time-use to the unpaid sector. Gender budget analysis opens the door to evaluating work beyond the paid sector of the economy by linking fiscal policy to the unpaid provision of care. So this is one example of how a gender perspective is important to financial resource discussions.

This leads me into my second set of questions namely: have discussions of gender been adequately mainstreamed into the finance for development framework? To answer this question I want to look at how development and governance frameworks have changed and where we would like them to go.

The current development framework is linked to a more market-based paradigm that emphasizes a greater role for private capital and private capital flows in development. The Monterrey Consensus is built from this framework of thinking, although it differs from its predecessor, the Washington Consensus because of its welcome emphasis on the need for greater gender mainstreaming and a more integrated role in the development process for people living in poverty.

Despite these praiseworthy goals, there are a number of commitments outlined in the Monterrey Consensus that may undermine these intentions.

1.  Macroeconomics and liberalization 

For example, the call for sound macroeconomic policies and fiscal discipline in para.8 of the Monterey Consensus that deals with mobilizing domestic financial resources reflects a framework of accountability that prioritizes the needs of capital markets - the three "Cs" of credibility, consistency and confidence - with the social sector subservient to those three C's. What I mean is that governments have to demonstrate their credibility to investors and the financial markets first by creating a consistent policy framework that will ensure investor confidence. In practice, what this has meant for the many developing countries are policies that combine commitments to low inflation, fiscal discipline and budget austerity, with liberalization of markets and the privatization of public assets.

In other words, governments have tended to become much more accountable to market forces in terms of their financial policies and less accountable to their citizenry and social needs.

However, market accountability may or may not lead to the kind of resource allocations that have a sustained long-term impact on gender equality and poverty reduction.

Let me give two sets of familiar examples: the impact of public spending and the impact of the privatization of public services.

Research from a gender perspective has shown how changes in patterns of public spending and revenue raising have different gender - based distributional results. One example is social expenditures, which are often lowered when there is a crunch on public finances or when there is a financial crisis. These cuts will tend to hit the poorest the hardest. Here it is worth noting that, first of all women are disproportionately poor and second because resource allocation within labor markets and the household is often gender - biased, poor women tend to be hit harder than poor men. More generally, when provision of health, education and other kinds of services by the state is reduced, this tends to impact poor women the most, as aspects of the care economy previously supplied by government, are displaced into households or marketized. This is an example of how the care economy tends to be treated as what economists call an externality- an infinite resource- that's "invisible" in fiscal policy making. Put differently, the purely financial view "free rides" on the unpaid burdens of women who provide the public good of the care economy. So the key point I want to emphasize here is that we need to make this invisible process more visible in the finance for development dialogue and work toward making gender equality and poverty eradication global public goods (GPGs) that are collectively provided. Otherwise, we risk undermining the entire sphere of social reproduction upon which communities and individuals rest.

My next example concerns privatization of the care economy - in this sense what I would call the privatization of risk for many. For instance, selling public assets to foreign investors to finance budget deficits and repay debts often leads to user fees or in some cases the withholding of services and public goods, since newly privatized companies need to make profits. The point here is that there's a potential bias in assuming that privatization will lead to greater competition, job creation and efficiency. Here again we can learn from a more holistic notion of efficiency that takes into account non-market resources and values.

Finally, for many countries, the problem of public goods provision is much tougher because capital mobility makes it much more difficult to sustain the tax base. Corporations are now freer than ever to repatriate profits, or move them offshore to decrease taxes. As corporations increasingly emphasize shareholder value and the short-term orientation to profits, it becomes increasingly difficult for developing countries to tax them effectively. So, whilst increased liberalization and greater capital mobility may result in inflows of resources, the globalisation process can be a double edged-sword for developing countries, especially if their tax base is made more precarious.

So, it may well be the case that important aspects of market based development undermine the ability of governments to meet one of the key stated objectives of para.8 of the Monterrey Consensus related to gender equality goals which is to fund "sustainable investments in education, health, nutrition and social security programs which take special care of children and are gender sensitive and fully inclusive of the rural sector and all disadvantaged communities (para. 8)". I hope that we can contribute to this gap in today's informal discussions and use the political momentum of the Finance for Development process.

2. Capital flows, trade and investment 

Turning to mobilizing international resources for development, the emphasis in the Monterrey Consensus is on attracting financial flows to developing countries whilst maintaining a stable international financial system.

Here a gender perspective would introduce questions about the terms under which private foreign capital flows enter a country, how this can shift sectoral and budgetary allocations and to what extent sustainable development and gender equality goals will be affected. The introduction of regulatory and compensatory measures that are gender-aware are critical as are mechanisms for participation, monitoring and assessment that recognize the wide variety of old and newer actors involved in global economic governance.

If we take the example of trade, this also has significant gender implications since various sectors of the economy are affected in different ways as trade patterns change. Legal and social barriers to participation by women are certainly one aspect of this. Another aspect that shapes gender equality goals relates to the way in which national governments institutionalize market-based rules and practices through their trade and investment agreements. These mobilize large amounts of private financial resources that in turn can shape the parameters of fiscal governance. So this is very much of political process shaped by various governments and hopefully discussion in Monterrey it will deal with some of these difficult questions.

My point is that new trade and investment agreements tend to "lock in" the rights of investors to repatriate profits, and help to secure greater freedom of capital movements. In effect, trade agreements help to supplement the market-based financial disciplines - the three C's - that I have already mentioned. These frameworks tend to encourage fiscal prudence and balanced budgets and discourage counter - cyclical spending. Governments have to meet a fall in levels of demand through spending cuts, a strategy which might well postpone recovery and this has implications for growth, efficiency and the development of women's and girls' capabilities. So overall, the extent to which we can make progress on social development and gender equality goals needs to be considered in the context of the new global financial regime. This is why a gender analysis needs to be injected into these larger discussions -- only if we have a plurality of economic development strategies that balance stakeholder interests will we meet sustainable human development objectives.

Finally, how can we develop accountability frameworks that recognize and transform these new global economic frameworks and gender equality goals?

Here, I'd like to raise some issues concerning governance and accountability. A more comprehensive finance for development process informed from a gender perspective will need to address systemic issues and develop mechanisms for mainstreaming a gender approach to macroeconomic policies, as well as within international, multilateral and national institutions. This also means ensuring that civil society networks have not just voice but also the required resources to intervene and engage in the international financial system.

So one way to pose this issue is in terms of what political economists have called voice and exit in matters of governance. Put simply, poor women and men often have very little "voice" in matters of formal political representation and policy-making, in contrast to well organized producers, like corporations and their business associations, or indeed, well organized trade unions. Corporations, under the conditions that I've been describing, not only have voice, they also have the right to exit countries if the investment climate is perceived to have gotten worse. So, whereas capital is relatively mobile, labour is relatively immobile, hemmed in by restrictive immigration measures that prevents the free movement of labour. This is even more the case for the poorest members of society, particularly poor women who are often bound to specific places by virtue of their roles in social reproduction including work in subsistence that is by definition place- bound.

So addressing the asymmetry of voice and exit options from a gender-sensitive perspective will be crucial to reforming global economic governance structures and financial relations. A key part of the success of any new development paradigm will be to engender economic governance regimes by making the non-financial count in financial decision-making at all levels.

I hope that we will get the chance to come up with proposals today that address both these broader macro frameworks and this question of voice and exit, for instance, proposals to discuss the Tobin Tax or the social responsibility of corporations.

And also more specific initiatives designed to directly address gender equality goals such as the earmarking of resources released through debt relief for specific benchmarks and targets agreed upon at Beijing and in the Millennium Declaration or the commitment to 30% of key decision making positions being occupied by women. So it will be key for us to come up with some benchmarks for the Finance for Development agenda in order to evaluate its progress and to continue to highlight potential contradictions between the system of economic governance and realizing social development objectives -- including gender equality.

Thank you.

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