Can Poor Women Afford to Be Optimistic as the World Economy Recovers?

Opinion Asia

A hint of optimism is in the air as a result of the current financial crisis showing signs of easing out. Most governments would attribute the positive signs of recovery to the Economic Stimulus Packages (ESPs), among other related factors, generated over the last year. As economies display tendencies toward slight improvement, there are discernible indications that the poor, especially women, may not necessarily come out of this crisis in the same way as men.

Government efforts to curb economies from sinking deeper into recession include strategies ranging from supporting businesses with significant tax exemptions to subsidies and tax rebates. Some countries, notably the US, adopted fiscal measures to stimulate jobs in the infrastructure and public works sectors. Clearly these measures were installed either to help create employment or to help employers continue to provide jobs for people.

In many of the stimulus efforts, explicit attention was also paid to the most vulnerable such as the poor, women, and the elderly. But for this group as a whole, fiscal measures were targeted to include direct cash transfers, conditional cash transfers and a myriad of social programmes to augment falling household incomes and to encourage consumption and spending. Thailand, for example, has aggressively pursued housing programmes targeted at poor households.

While the commitment of governments across the world to help the poor during this time of economic crisis is laudable, it is equally important to ask if the stimulus efforts to help the poor cope during this period of downturn have had a different impact on men and women and if both men and women have had different struggles wading through the crisis.

Countries in Asia with ESPs include China, India, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand. Although ESPs consist of the different components such as public spending on goods and services, stimulus packages for consumers, and fiscal measures aimed at firms, some countries have decided to prioritise infrastructure development over others.

India is a case in point, announcing a budget of about $55 billion devoted to improving roads, ports and all other infrastructure. Other examples are Taiwan, South Korea and China. Out of the total 180 billion Taiwanese dollars of Taiwan’s stimulus package, 58.3 billion or close to one-third has been channeled into infrastructure development. Similarly in South Korea, a much greater proportion of its ESP has been allocated toward infrastructure projects more than the other sectors of the economy. Specifically four trillion won has been channeled into infrastructure development while 3 trillion won account for tax breaks for investment in factories and 3.4 trillion won for small businesses. In the case of China’s four trillion yuan economic stimulus package, 280 billion yuan has
been allocated toward housing projects for low-income households and 370 billion yuan toward rural infrastructural projects. In contrast, only 40 billion has been channeled into healthcare, cultural projects and education programmes.

It cannot be denied that creating jobs in construction is highly effective to counter the effects of an economic downturn, particularly as this sector is able to quickly absorb the unskilled, ensuring that these workers have jobs during a crisis period. But this sector is inherently gender-biased since the infrastructure and public works sectors mainly provide jobs to male workers.

But if government spending is channeled into education, health, and agricultural sectors, for example, the likelihood of women workers being assured of jobs increases considerably since these sectors employ large proportions of women, especially education and health. Moreover, the education and health sectors are less sensitive to economic fluctuations.

While these sectors are more appealing for this reason and more robust during times of economic crises, it must be recognised that these sectors tend to demand skilled workers who have undergone the necessary training to take on jobs relevant to these industries. What this means is that unskilled and lowly educated women are sorely disadvantaged—a group that is most marginalised in the labour market.

For these reasons, there is a greater need to ensure that ESPs reach out to women or, to put it differently, that they need to be gender-sensitive. The urgency for tailoring ESPs to ensure women’s labour force participation stems from the fact that some of the industries hardest hit by the credit crisis are the garment, textile and electronic sectors dominated by women workers. In the Philippines, for example, about 75 percent of workers laid off in the export-processing zones (EPZs) are women. Those lucky enough to retain their jobs have found themselves having to accept salary reductions because of shorter work weeks, contractualisation and outsourcing.

Governments are incumbent to ensure that women do not bear the brunt of the economic downturn. Instead they should be recognised as integral contributors and participants in solving the economic crisis.

Appropriate policies are necessary to ensure that those women who want to work are able to find suitable jobs given their skills. Job training is one of many strategies to ensure women’s continued employment in the labour force and their ability to enter male-dominated sectors. There should also be programmes to enable women to access financial resources to help them start up businesses since the supply of loan funds have dipped from donors and financial institutions. Because women do not have the social capital men have in securing employment, relevant programmes to help women find jobs also becomes necessary.

While the current fiscal stimulus packages in most countries are aimed mostly at revitalising the economy in the short term, it is prudent for governments to look at the broader impact these strategies will have on different quarters of society in the long run, particularly the most vulnerable.

It cannot be under-emphasised that women, in particular, are an important investment in the longer term. In households where women are actively employed in wage work, children are the greatest beneficiaries of women’s labour because women’s earnings lead to greater spending on children’s health and education. Thus, economic interventions for women become particularly critical in times of economic crises because these translate into economic development prospects for the future generations.

By Theresa Devasahayam Theresa Devasahayam is a Fellow at the Institute of Southeast
Asian Studies (ISEAS), Singapore, and the Coordinator of the Gender Studies Programme at the same institute.