Women and Austerity in the Global South
By Treesha Lall
Image: Red Women's Workshop (Link)
The COVID-19 pandemic has had a devastating impact on the lives and livelihoods of billions around the world. With widespread unemployment, an insatiable medical crisis and a slew of socio-political problems dogging the heels of nations for almost two years now, sights are set on what the future holds. For the Global South, this paints a gloomy picture, wherein many countries are yet to emerge from the pandemic and others are already feeling the after-effects of prolonged socio-economic disruption. By the end of 2020, developing countries in the region had accumulated burgeoning debt. Struggling to rebuild public health infrastructure and shore up fragile national economies to provide for an increasingly indisposed population, governments turned to emergency international borrowing. Organisations like the International Monetary Fund (IMF) mobilised emergency fast-track funds to the world’s poorest countries. At the same time, however, these International Financial Institutions (IFIs) continued pursuing intensive and unsustainable debt payment programmes. In 2021, the World Bank pledged about 6 billion as part of its COVID-19 fast track facility but also refused to waive a 3.77 billion $ US debt that 73 of the world’s poorest countries owe it. If loans need to be serviced no matter what the cost, poor nations could spiral into a period of severe austerity in the next few years, posing a serious threat to the accessibility to basic human rights for close to 75 billion people (as it has been in the past).
Austerity measures are a part of adjustment measures pushed by the IMF and other IFIs to member and borrower States after a period of economic crisis and fiscal deficit. To repay borrowed funds, for States, austerity entails a sharp cut in public spending, ‘targeting’ and limiting the scope of benefit schemes, broadening regressive taxation and a neo-liberalist contraction of government regulation in labour markets. In the past, austerity measures and premature budget cuts have been the cause of stalled development in poor countries. Between the 1980s and 1990s, Structural Adjustment Policies (SAPs)- which encompassed austerity- put in place by the IMF in several regions such as Sub-Saharan Africa, Latin America and East Asia were the cause of what academicians call ‘a lost decade’ of development. In the last few years, it has also meant a deprivation of basic welfare needs for people. For instance, in 2014, India and Nepal, on the advice of the IMF both downscaled food subsidiaries and distribution schemes. In North African countries such as Algeria, Morocco and Egypt, around the same time, educational and training programmes were suspended. Ghana initiated price hikes on water.
In the Global South, austerity has had a significant and especially alarming effect on the social and financial status of girls and women. One of the central tenets of austerity is that governments effectively forfeit social security and benefit schemes that target education, child and old-age support. By doing so, governments pass the responsibility of care for the dependents of society to women, who undertake about 75% of all unpaid care work. Across the world, women spend approximately 18 hours a day engaged in this activity, allowing the State to pull away from welfare. In this regard, gender roles in the economy that assign women the role of primary caregiver facilitate the design of austerity policies just as much as they are cemented by it. Unpaid care work creates a significant hindrance for women and girls to access their right to work.
Loosened labour market regulation hits women harder as well. Labour market ‘Flexibilization’ means controlling higher minimum wage demands, employment benefits and collective bargaining opportunities in a bid to make labour markets more competitive. All such practices engender unstable, temporary and frequently exploitative work for women. Women are also over-represented in the public and agriculture sector in the Global South, both of which become unviable employment options on account of cuts in wage bills and agriculture subsidies respectively. As a measure to rebuild the neo-liberal economy, austerity frequently invests singularly in the rebuilding of ‘viable’ sectors and associated employment, economic sectors that happen to be male dominated. Women, who already have fewer employment options are forced to turn to low-paying and unsafe informal sector jobs. Approximately 80% of women in Asia and 54% in Latin America and the Caribbean region work in non-agricultural informal sectors, depriving them the right to demand workplace security.
Income disparity is therefore intrinsically linked with austerity, where women are disproportionately pushed to the bottom rungs of the financial classes. They end up requiring much greater support through public services and thereon become increasingly vulnerable to the ill-effects of austerity. Especially susceptible to austerity-induced unemployment, gender wage gaps and increasing consumer taxation are women belonging to vulnerable social groups. Single mothers or women members of the LGBTQ+ community struggle to find access to healthcare, shelter and social security through a minimised welfare sector.
Additionally, austerity undercuts gender budgeting, a gender-sensitive fiscal measure introduced only recently in the region. Through gender budgeting, a specific percentage of the central and state budgets is set aside and allotted to the security and empowerment of women. In periods of austerity, policy reform often mandates cutting funding allocated to furthering causes pertaining to women. For instance, between 2014 and 2016 Brazil cut up to 40% of the budget reserved for benefit schemes for women and girls, including services for survivors of violence and abuse. Notably, violence and domestic abuse against women is already highly exacerbated by austerity. Austerity allows governments to withdraw social support as well as funding from appropriate criminal redressal systems. Without proper shelter, employment and access to social security, women are forced to remain in a state of economic and financial dependency, which may include continuing to stay in an abusive household or locality. This is cause for serious concern, especially today, when, across the globe, cases of domestic abuse during the pandemic have been rising exponentially. Moreover, driven by unemployment, many women and girls undertake sex work, a highly unregulated and informal industry in the global south where many are subject to physical abuse and sexual violence.
The COVID-19 pandemic is steadily shaping up to be the worst global financial crisis in 75 years and despite various rhetorical messaging, the IMF is expected to enforce austerity on many developing countries as early as 2021. Approximately 85% of 67 borrower States are already bound by terms and conditions on emergency lending to begin immediate fiscal consolidation. It is expected that approximately 159 countries could put austerity measures in effect, with the period of implementation stretching to 2025. The scale of fiscal contraction under austerity is expected to be at 3.3% of GDP, significantly higher than the 1.34% recorded after the 2007-08 financial crisis. For women, the pandemic has created several challenges. Ranging from being subject to mounting cases of domestic abuse and sexual violence during the lockdown to facing a clampdown on education, women’s issues today demand continued State support. To secure human rights for women, it is imperative to look for equitable and sustainable fiscal consolidation measures in the future and find alternate pathways to protect women from the new wave of austerity.
Fortunately, this is not a distant possibility. In place of austerity, countries can look to progressive taxation, a tighter system to detect tax avoidance as well as an impact assessment of the invisible gendered effects of such policies. States must also involve more women in political / economic decision making and outline a more strategic framework for the rebuilding of social infrastructures. The COVID-19 pandemic presents an opportunity for the development of novel and equitable solutions for debt servicing. There is a responsibility to recognize the cracks in the status quo on the part of nations and on IFIs and multi-lateral organisations, to rethink overarching frameworks that have been pushing disparity and human exploitation for a decade.