Whether in the South or in the North, women bear the burdens of the debt crisis and structural adjustment policies

A CADTM Contribution to the UN call for comments on the impact of economic policies on women’s fundamental rights

23 March by Chiara Filoni


Sri Lanka (CC - Flickr - Max Wilson)

The CADTM (Committee for the abolition of illegitimate debt) is an International network that has, over the past thirty years, warned of the effects of illegitimate debt and structural adjustment policies.

Public debt and the austerity measures taken to reduce it have social and economic repercussions on the populations. Here we analyse in particular the consequences for women.

These policies are in fact “sexist”, as much in their nature as in their effects. The Structural Adjustment Plans (SAP), applied since the debt crisis of the 1980s, have impoverished women in Southern countries in the same way as the austerity plans that have been imposed in Europe since the sovereign debt crisis in 2010-11 have been the cause of serious consequences for women.

Far from grappling with the real culprits of this crisis, austerity measures hit the most fragile sectors of the population, among whom women are over represented, and the most vulnerable (single mothers, women who are young, aged, migrant or from ethnic minorities and/or from rural areas etc.). Privatisations, liberalisations, reductions in social spending because of neoliberal policies, cut through women’s social rights, accentuate their impoverishment, worsen gender inequality and slash the advances made by gender equality movements.

Here are the effects that some [1] of these structural adjustment measures in the South and austerity measures in the North have had and continue to have. They cause more unfavourable consequences on women, whatever their country, culture or level of development, or the amount of social damage caused by the measures.

The effects of the debt crisis and austerity policies on women’s working conditions and wages

Wherever they are applied, neoliberal measures only aggravate crises, stagnation and decline hand-in-hand with impoverishment and the inequalities that primarily affect women.

It is important to note: well before the European debt crisis and the recession in the Southern countries professional opportunities for women were far from being comparable to men’s. In the South as in the North women are more subjected to unstable employment (short-term contracts, temporary [2] or undeclared work), enjoy less social cover and pension rights, and are the first to be laid-off. [3] All these injustices have become worse, as we shall see, since the beginning of the crisis and the application of restrictive fiscal policies.

The debt crisis has had important repercussions on unemployment and the measures taken have further aggravated the situation.

According to the International Labour Organisation (ILO) real wages in most African countries have lost 50 to 60% of their value since the 1980s, [4] whilst in Europe, since the beginning of the crisis, women’s unemployment has continually increased (with a small improvement this last year). In September 2017, it reached an average level of 9.3% (against 8.6% for men) in the Eurozone. [5]

The level of unemployment among women in Greece went from 11.7% in May 2008 (6.1% for men) to 25.3% in July 2017 (17.5% for men). This figure reaches 55.9% for women under 25 (46.6% for men). [6] In the South of Italy 56.7% [7] of mothers seeking work are unemployed.

In the southern countries wage controls that become wage freezes and sharp wage cuts appear to be prerequisite conditions for loans from the International Financial Institutions (IFI). South Korea is an example: in 1997 the country received a $57 billion loan from the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
on condition that labour market flexibility be introduced. [8] Wages were cut and workers were laid-off in a ratio of seven women to one man. [9]

The policies imposed in order to repay the debt were three pronged:

Devaluations increase the cost of imported goods and decrease the prices of home made goods on the foreign markets. These measures are supposed to improve exports, so reducing the balance of payments Balance of payments A country’s balance of current payments is the result of its commercial transactions (i.e. imported and exported goods and services) and its financial exchanges with foreign countries. The balance of payments is a measure of the financial position of a country vis-à-vis the rest of the world. A country with a surplus in its current payments is a lending country for the rest of the world. On the other hand, if a country’s balance is in the red, that country will have to turn to the international lenders to meet its funding needs. deficit and to provide sufficient cash-flow (generally in foreign currency) to pay the debt.

Austerity measures affect the most fragile and precarious sectors of the populations among whom women are more numerous.

Because suppression of subsidies for staple products was one of the imposed conditions, many women – principal local producers of staple foods – were unable to pay increased prices and so continue with their production. At the same time devaluation had increased the costs of imported agricultural inputs such as fertilizers.

The inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. that follows devaluation can seriously harm small retailers. In Senegal, before the devaluation of the CFA franc in 1994 women selling used clothes on the markets could earn 15,000 francs selling 50kg in one day. Today, the same quantity of clothes cost 75,000 francs and take two weeks to sell. [10]

The liberalization of the economy and exportation is detrimental to the local economy and women’s rights. In Sri Lanka more than 40,000 women lost their livelihoods when cheap imported cloths replaced their own hand made cloths, although some of the women found abominable sweat-shop work in textile exporting factories. In the country, more than 80% of the work-force is female and employed in the free zones where tax and social regulations are waived in favour of export production and where wages are around €62 p/m. [11]


Precarious living conditions and pension reforms

The reduction in household income caused by the recession aggravates the instability of women’s employment and women’s general standard of living. Women have greater difficulty than men to accept jobs where it would be difficult to reconcile professional and family obligations, so they more easily accept employment below their levels of qualification or competence.

Women receive lower pensions than men (for equal age and competence). This is caused through women working more in undeclared or temporary work and the gender gap in revenues.

Seen worldwide, the number of women who have passed retirement ages and receive a pension is 10.6% less than men. [12] In southern counties few women receive pensions, whilst in Europe, because of pension reforms, the instability of the retired and the risks of sinking into poverty are aggravated.

In Greece the “Katrougalos” act, passed in May 2016, modified the pension system: widows and bereavement benefits were reduced or even abolished (if the spouse is under 55). [13] What’s more, the gradual suppression of the EKAS, a small benefit in favour of the pensioners receiving the smallest pensions and a reduction of occupational pension payments at the same time as pensions are burdened with increased stoppages at the source press more and more old (and not so old) women into poverty.

Retirement ages now come later.

In Austria the women’s retirement age was raised in 2014 from 57 to 60 years of age. Also, in Italy the Fornero reform (named after the employment Minister of the caretaker Monti government put in place by the EU in the wake of the 2011 debt crisis) [14] specifies that women will no longer be able to receive their pension before the age of 66.

Another cause of inequality that appears in times of austerity is gender professional segregation that corresponds with quite precise gender working divisions. As we have seen, there is a high concentration of women working in education, health and social work, followed by the wholesale and retail sectors. According to the ILO, this form of segregation has increased by 50% over the last ten years. Gender professional segregation exists as much in the emerging economies as in so called developed economies. [15]


Cuts in social protection and public service funding

In Europe, in order to cut costs so as to find the means to pay the debt resulting from the 2010-11 crisis, social budgets have suffered severe cuts. It’s women who are the most affected by these cuts; they require these services (maternity benefits and care, gynaecology, and a greater life expectancy means they require them longer) and occupy a greater number of jobs in health, education and public service. [16]

Everywhere we look State assistance to the family is being significantly reduced, whether it be unemployment benefits, social benefits, family benefits, maternity benefits or aid to the aged or to dependent persons and efforts in favour of gender equality.

Here are some examples.

In the UK, family allowances and aids linked to maternity and birth have all been restricted or frozen since the beginning of the financial crisis. Other benefits, such as for housing, have been reduced and all these measures hit women more forcibly than men. A TUC (Trades Unions Congress) study has found that single mothers have lost no less than 18% of their net incomes. [17]

In Belgium, under the Di Rupo government, 25,000 unemployed have been struck from the benefits lists: [18] this measure more heavily affected women because women represent 61% of the most needy. The decision by the European Commission, in July 2015, to withdraw the law increasing maternity benefits is a prime example of the failure of the EU and its member States, to support a sincere and human protection for European women. [19]

Concerning policies of gender equality we cite the closing of the Spanish ministry for equality and its absorption by the health ministry in 2010.

Because of the recent crisis in Europe and the application of structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

IMF : http://www.worldbank.org/
measures we see essential responsibilities leaving the domain of State activity to be claimed by the private sphere of influence and to weigh on women. Women having to work for free – a foundation stone of the patriarchal society in which we live – has been aggravated by the wave of privatisations of public enterprises, done within the framework of austerity policies at the insistence of the IFIs.

These privatisations, very often the counter-part to receiving loans, mean only price increases, degraded quality of services and less accessibility for the poorest and for rural inhabitants.

The privatisations in numerous Southern countries, meaning, for instance, that people must go to public wells to fetch water, increases the workload of women – it is they who are generally supposed to fetch the water for the family. This is also an important chore that leads to many girls leaving their schooling and having their health degraded (the weight being often carried on the head causing back and neck pains) not to mention being exposed to the violence that is often present around the well.

The privatisations and closing of health services not only cause unemployment among women but often means they are called upon to care for the elderly and sick in their families who are no longer cared for by the health services.

Since 2010, about 850 local clinics and 11 hospitals have been closed in Greece. [20] And, in those that are still functioning there is such a shortage of staff and medical material that many services are unable to treat all their patients. Before Syriza came to power the Troika Troika Troika: IMF, European Commission and European Central Bank, which together impose austerity measures through the conditions tied to loans to countries in difficulty.

IMF : https://www.ecb.europa.eu/home/html/index.en.html
made women pay €1,000 to bring their babies into the world. [21]

In the Democratic Republic of the Congo (DRC) the privatisation of health services imposed by the World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

and the IMF means that women about to give birth may die with their babies on the steps of the hospital if they cannot provide evidence that they can pay for the care and they may be kept hostage in the maternity service against the payment for gynaecology services after the birth! This country has the sad World third place for infant and maternity deaths. Many women lose their lives in giving life.

The SAP and austerity policies also have an impact on women’s sexual and reproductive rights. These rights are a very specific question closely related to the promotion of gender equality. Everywhere, throughout the Southern countries and in Europe, funding is being reduced for AIDS prevention, access to safe abortions, family planning and preventive medicine, especially for women.

In France, over the last ten years no less than 20% of maternity services have been closed [22]

Falling incomes, rampant precariousness and the pressures of austerity are often causes of significant rises in violence on women.

As Yvonne ’Ngoyi, member of the CADTM network in DRC has said: “Many women go into prostitution to pay their school fees, to gain a job, to get papers etc. or for even much less such as a meal. In Lusaka many girls take up prostitution saying that their only wealth is their bodies”.

Where there are structural adjustment policies they aggravate the dynamic of crisis, stagnation and decline, and at the same time also aggravate poverty and inequalities that primarily affect women. Everywhere, they block the emancipation of women and endanger the fragile feminist gains. It is clearly the women who suffer the most from policies aimed at debt repayment. It is therefore to the women that the most is owed, not to national or international financial creditors. The women hold an enormous social debt. Without their free work, in production, reproduction and care our societies would quite simply collapse.


The author thanks Christine Vanden Daelen, Anouk Renaud and Marie-Laure Coulmin Koutsaftis for their advice and suggestions.

Translated by Mike Krowlikowski and Christine Pagnoulle.


See the call for contributions concerning “The impact of economic reform policies on women’s human rights” by Juan Pablo Bohoslavsky, independent expert on human rights and foreign debt for the UN.


See also:
- International Day for Women’s Rights: Debt is not just a financial instrument, it is also a gendered tool
- How Patriarchy and Capitalism Combine to Aggravate the Oppression of Women



Footnotes

[1Because of lack of space only a selection of examples may be mentioned.

[2According to Eurostat, between 2007 and 2013, temporary employment went down from 19% to 15.7 %. Under the effects of the employment crisis temporary employees were the first to be laid-off. See: https://www.inegalites.fr/L-etat-de-la-precarite-d-emploi-en-Europe?id_theme=23 (in French)

[3In the EU, where 7% of men are in temporary work inferior to 20 hours a week, it is the case of 19% of women. See https://www.inegalites.fr/L-etat-de-la-precarite-d-emploi-en-Europe?id_theme=23 (in French)

[4OXFAM (UK. & Ireland), “Embracing the future, avoiding the challenge of world poverty: Oxfam’s response to the World Bank’s ‘vision’ for the Bretton Woods system”, July 1994.

[6Ibid.

[7Fondazione studi consulenti del Lavoro, étude de mai 2016 extrapolé de l’article http://www.ilfattoquotidiano.it/premium/articoli/buona-festa-della-mamma-disoccupata (in Italian)

[8CADTM, Interventions à la formation à Amsterdam, novembre 2016, http://www.cadtm.org/Interventions-a-la-formation-a (in French)

[9Kavita Ramdas and Christine Ahn, “The IMF : Violating Women since 1945”, May 19, 2011, http://www.ipsdc.org/the_imf_violating_women_since_1945/

[10Ibid.

[11Laurence Buzenot, Textile-habillement et zones franches à Sri Lanka, 8 March 2013, available in the original French here http://slkdiaspo.hypotheses.org/1652

[12ILO, World Employment and Social Outlook : Trends for women 2017, available here: http://www.ilo.org/wcmsp5/groups/public/---dgreports/---inst/documents/publication/wcms_557245.pdf

[13Women’s Solidarity Venue, Grèce : Non au durcissement de la loi sur les pensions de veuvage ! (Greece, refuse the pensions and widows law!). Available here https://www.change.org/p/le-parlement-hellénique-grèce-non-au-durcissement-de-la-loi-sur-lespensions-de-veuvage

[15Laurence Buzenot, Textile-habillement et zones franches à Sri Lanka (Textiles, garments and free-zones in Sri Lanka), op.cit.

[16In Europe, women make up 78% of the workforce in the social and health services and 60% of primary and secondary teaching staff. See Oxfam International and European Women’s Lobby, “Women’s poverty and social exclusion in the European Union at a time of recession – An Invisible Crisis ?”, March 2010, p.24, available here: http://www.oxfam.org.uk/resources/policy/economic_crisis/downloads/rr_gec_an_invisible_crisis_240310.pdf

[18Claude De Decker, “25.000 personnes exclues du chômage : ’Ce n’est qu’un début (“25,000 struck off unemployment, ’and it’s only the beginning’, fears Nollet”)’”, Le Soir, February 2016, http://www.lesoir.be/1126644/article/actualite/belgique/politique/2016-02-19/25000-personnes-ex-clues-duchomage-ce-n-est-qu-un-debut-craint-nollet (in French)

[19RTBF, EU : le congé de maternité de 20 semaines, ce n’est pas pour demain (20 weeks maternity leave is not on the horizon), March 2015, RTBF, https://www.rtbf.be/info/dossier/euranetplus/detail_ue-le-conge-de-maternite-de-20-semaines-ce-n-est-pas-pourdemain?id=8934185 (in French)

[20Marina Rafenberg, “En Grèce, un système de santé public à bout de souffle (In Greece, public health system at the end of its tether.)”, Le Monde, June 2017, http://www.lemonde.fr/economie/article/2017/06/14/en-grece-un-systeme-de-sante-public-a-bout-desouffle_5144339_3234.html (in French)

[21Guillaume Guichard, “Ces maternités qui doivent s’améliorer... ou fermer (These maternity clinics that must improve, or shut down)”, Le Figaro, January 2015, http://www.lefigaro.fr/conjoncture/2015/01/22/20002-20150122ARTFIG00465-ces-maternites-qui-doivent-sameliorer8230-ou-fermer.php (in French)

[22Solidarity France-Greece for health, Témoignages sur la situation sanitaire en Grèce aujourd’hui (Testimony on the public health situation in Greece today), June 2015, http://www.gaucherepublicaine.org/international/temoignages-sur-la-situation-sanitaire-en-grece-aujourdhui/7396365 (in French)

Translation(s)

CADTM

COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

35 rue Fabry
4000 - Liège- Belgique

00324 226 62 85
info@cadtm.org

cadtm.org