Bursting the macroeconomic policy bubble for gender equality

When gender equality was universally adopted as Sustainable Development Goal 5, “gender equality matters to economic growth” became the party line of global institutions. The floodgates well and truly opened after McKinsey & Company published its 2015 flagship report finding USD 12 trillion could be added to global GDP by 2025 by advancing women’s equality. A cascade of “killer facts” soon followed from unlikely gender champions, from the likes of Goldman Sachs estimating a 12 per cent increase in per capita income could be created by 2030 by closing the gender credit gap, to the G20 recognizing their economies stand to gain significantly from increased female labour force participation in the context of widely ageing populations and low fertility rates. Even the World Bank’s Doing Business Report, ranking countries according to how favorable their business environment is and frequently criticizedfor having a very narrow approach, has now included gender dimensions in three of its indicators, signaling that “gender equality matters!” It seems the message might even have slowly trickled its way up to finance ministries, as the World Bank now hosts a semi-annual “Community of Practice” for finance ministers on gender equality.

So with all this new buy-in for gender equality from those with their hands on the levers of power, how is it that the World Economic Forum found the gender gap had widened in the past four years and predicted it could now take 170 years for women to reach parity? Could it be that all the well-intentioned economists in the world do not have the expertise needed to advance gender equality? Instead, perhaps those who have been fighting tooth and nail for gender equality as a fundamental human right for decades should be consulted, that most-dreaded F-word: feminists.

If anyone bothers to ask them, feminists have been arguing since 1995 at least, when it became part of the Beijing Platform for Action, that macroeconomic policy is fundamental to impeding and therefore achieving gender equality. The current process of macro-economic policy formation, isolated from human rights discourse and still largely free from civil society engagement let alone participation from feminists, is an enormous obstacle to progress. Although you would not be able to tell from the recent report of the UN’s High Level Panel on Women’s Economic Empowerment, which managed to avoid the issue almost completely. For over twenty years feminist economists have identified orthodox macroeconomic policies as key structural barriers, maintaining and at times exacerbating gender inequalities. Gender equality may not only matter to economic growth, but the ways in which and whether we pursue economic growth matters to gender equality, and all human rights, as well. Ignoring that key dynamic by instrumentalizing women for economic growth alone is therefore counterproductive and too simplistic.

The IMF, as keeper of the keys of the macroeconomic toolbox, must demonstrate leadership in understanding this complex reality and guide governments in implementing gender-just macroeconomic policies. The IMF has not escaped the trend of making the economic case for gender equality. Under the leadership of Ms. Christine Lagarde, since 2013 the IMF has moved relatively quickly to now consider “gender” as an “emerging issue,” surpassing even the World Bank on engaging in what is traditionally seen as a “non-core” issue.

Its gender work has evolved from research laying out the “macro-criticality” of certain gender gaps, to making gendered recommendations in a handful of its 2015 and 2016 Article IV surveillance reports, and finally including an explicitly gendered condition in a lending program for the first time, in August of this year to Jordan. Somewhat surprisingly, this shift is therefore not merely rhetorical but is translating into actual policy advice. After holding the position for 69 years that the IMF has nothing to do with gender equality, this is a significant policy shift.

However, the work focused on gender within the Fund is narrow and would benefit from a more comprehensive understanding of all the macro-critical dimensions of gender equality as a human right. For example, while the Fund recognizes gender gaps in labour force participation can be macro critical, gender gaps in experiencing violence, which have equally been estimated to carry huge economic costs, are not recognized. This analysis can be extended to a range of other interrelated structural inequalities, such as occupational gender segregation; the gender pay gap; lack of decent work for women; women’s power in decision making; access to and control over land, property and financial services; and addressing deeply-rooted social and cultural norms and power structures. All of these inequalities that undermine women’s human rights have macro-critical dimensions and thus should be included as the IMF explores gender equality. This analysis may also equally be applied to other groups often excluded from the economy, such as people with disabilities and ethnic minorities. Without including such groups in its analysis the Fund’s aim of achieving “inclusive growth” will remain meaningless.

More importantly, even if all these new gender-friendly policies become institutionalized and more comprehensive, they will remain insignificant if they do not affect the conventional policy advice of the IMF, which continues to undermine gender equality. Commonly-prescribed policies by the IMF, including some delivered so far this year, require cutting the public wage bill, increasing Value Added Tax (VAT), healthcare reform and labour flexibilization, which have all been shown to potentially undermine women’s rights and gender equality. Endorsing these policies while promoting increased female labour force participation is comparable to obsessively cleaning a tiny corner of a room while ignoring an enormous pile of garbage on the other side.

If the IMF is serious about supporting SDG 5 in a meaningful way, which Ms. Lagarde has just recommitted to, it has to conduct gender-impact assessments of its conventional policy advice and reassess its policies in light of the results. In the meantime, the Fund should start making a habit of speaking with local women’s groups for its Article IV consultations. Jordan’s new IMF loan program proudly including explicit gendered measures for the first time would be a great place to start.

By Emma Burgisser. Emma Burgisser is a Gender Research and Project Officer at the UK-based Bretton Wood Project. To learn more about why macroeconomic policy matters to gender equality, how the IMF and World Bank influence macroeconomic policy, and how to engage with these powerful institutions read the Bretton Woods Project’s latest publication Gender-Just Macroeconomics: Engaging the IMF and World Bank.

Source: RightingFinance.