This Civil Society Policy Forum was sponsored by the Center for Economic and Social Rights, and co-sponsored by Oxfam International, Bretton Woods Project, Arab NGO Network for Development, Global Alliance for Tax Justice.
- Mahinour El Badrawi, Center for Economic and Social Rights (Moderator)
- Iara Pietricovsky, Instituto De Estudos Socio-Economicos (INESC)
- Bilquis Tahira, Shirakat
- Stefania Fabrizio, IMF
- Mercedes Vera Martin, IMF
- Nabil Abdo, Oxfam International
Nabil Abdo (Oxfam International): My intervention is based on recent report we’ve issued on The Gendered Impact of IMF Policies in MENA: The case of Egypt, Jordan and Tunisia. IMF involvement in the region is old, dating back to late 1980s, then intervention after the Arab Spring.
Now, IMF programmes have specific benchmarks relating to gender, specifically public nurseries for women. The MENA (Middle East and North Africa) region has a female labour force participation (FLFP) rate of 20.2%, which is the lowest FLFP in the world. Economic policies in general affect women, beyond just the FLFP rate. Despite encouraging moves of IMF, its policies have had a negative impact specifically on women. Fiscal consolidation is subsidised by women’s unpaid care work.
- Removal of fuel and energy subsidies: I am not arguing whether subsidies are regressive and benefits the rich the most, what is certain is that removing them harms the poorest the most. Rising gas prices affect women directly, because they disproportionately use liquefied petroleum gas for cooking and other activities. This can increase electricity bills, but also means using less electricity intensive machines, which increases unpaid care work. These policies are often substituted by targeted cash transfers/social safety nets, with the brunt of conditional cash transfers is on women. Programmes based on women’s invisible work.
- Social expenditure cuts: Though IMF programmes have targets to increase social spending, and indicative targets on social spending floors, these are not mandatory, not met. For example, in Jordan, public health spending has declined from 5.6% of GDP in 2011 to 3.4% in 2016. These interventions have contributed to increasing inequality.
- Increasing the FLFP rate is the signature approach of the IMF. Their idea is to increase women’s LFP for growth. But at the same time, they are reducing the public sector and public wage bill. However, it is the public sector which is largest employer of women in these countries. Will lead to more women being unemployed because of public sector cuts. IMF 2018 report states that, “high public employment has discouraged labour force participation. Higher public employment has been associated with lower labour force participation, globally and in the region, especially among women.”
- In the region, wages are low, informality is high and there is often no protection. In Egypt, 75% of women working in the private sector have contracts for one year or less, and 17.5% do not have a contract at all. In Jordan, 86% of women employed in private sector withdrew when married.
Plus the IMF programme was used by the Government as reason to clamp down on protestors in Egypt, and the latest report in Egypt described opposition to IMF backed reforms as “vested interests”.
Mahinour El Badrawi (moderator): Thank you for overview. Shows that although IMF has taken up macro-criticality of gender, still lots of fiscal consolidation.
Bilquis Tahira (Shirakat): The analysis is based on study looking at Pakistan and India, where the impact of neoliberal policies of the IMF on women’s lives and the similarities in fact are not very surprising. The loans, since the 1980s, have mostly been accompanied by a neoliberal structural adjustment based on privatization, deregulation, curtailing subsidies, limiting social sector spending, regressive taxation and other such steps. However, international criticism argued that the ‘financial support’ was actually widening the rights and access gaps between the rich and the poor and the policies were actually making the rich richer and the poor poorer.
This constituted a public relations challenge for the WB & IMF, who felt obliged to strengthen their image without changing their ideological commitment to neoliberal globalization and consequently began integrating poverty reduction with its structural adjustment agenda and changed the name of its Extended Structural Adjustment Facility (ESAF) to Poverty Reduction Growth Facility (PRGF) in 1999. IMF has now developed a strategy for Gender Equality and has undertaken some researches on gender equality and poverty alleviation as well. We, the feminists, contest this. The words have changed, but the policies remain the same – deregulation, regressive taxation curtailing subsidies, limiting social sector spending, regressive taxation and other such steps.
Under IMF programmes, the number of regressive taxes levied, prices went up, over 200 household items, such as cooking oil have Goods and Services Tax or other regressive taxes put on them. One third of the people of Pakistan who live below the national poverty line are workers – employed, self-employed, unemployed, or underemployed. The neglect towards workers’ empowerment perpetuates the cycle of poverty particularly for women whose work remains unrecognized and in most cases, unwaged, leading to feminization of poverty. This meant that workers came under a lot of pressure, and the programme impacted women more. Mots of the structural adjustments diminished role of the state, free market fundamentalism, privatization, deregulation, flexibility of labour – which operate at the heart of neoliberalism accomplish the opposite, creating structural conditions which make it difficult for workers to climb out of poverty.
Under this, the first cut in the household budget is on girls’ education and nutrition, in any case in Pakistan and India, women and girls eat after the men in the family. Then that gets us into a vicious cycle, lower education, lower skills for livelihood, early marriage, informal work, vulnerability to violence within the family, and it is the same for their daughters – the cycle perpetuates.
From without, the neoliberal system it is under attack by world-wide social movements such as the World Social Forum and many environmental and feminist initiatives. There is a stronger realization that foreign debt is the main lever used by the donor countries and multilateral aid organizations to break resistance to the imposition of external economic agendas and development policies. A growing consensus is emerging in Pakistan that whatever these reforms may have accomplished for the health of the economy, for common people they have spelled more misery of inflation and rising costs of basic necessities.
We are not saying our governments bear no responsibility. For example, Pakistan only had three months of reserves left, didn’t have many options. IMF has lots of funds, lots of research. However has it been translated into implementation? Out of 58 facilities, there are only two countries where conditionalities include gender equality as well. Fight also against this model, neoliberal macroeconomic model – based on the belief that macroeconomics is a religion not a science. Doesn’t care about human beings, doesn’t care about increasing women’s social reproduction role. This model doesn’t consider what goes into work that sustains families, only looks at the dollar. Feminists can’t say IMF go home, because there are countries that need support, but this does not need to go on any longer. Why should we continue having this model, when we accept there are flaws? Not rocket science to understand to understand that when wages are cut, inflation goes up, women can’t buy food at same price.
The IMF must review the conditionalities it makes mandatory on countries so that these do not contradict the international commitments on human rights, gender equality and social, political and cultural rights. The IMF must move away from the fiscal consolidation centred approach to a human rights and gender equality based macroeconomic approach. We ask that we please do gender-transformative policies, in negotiations with countries, include gender-transformative conditionalities.
Within such a paradigm, we could focus on not capital but human beings (women, men, girls and boys and other sexual identities) will be the centre stage and any country will become eligible to receive funds based on its commitments to gender equal human development policies and their implementation. In the long run, we will help you develop a more equitable, gender-transformative model of work, with human beings at the centre, based on human rights, that doesn’t just boil down to the dollar.
Iara Pietricovsky (INESC): Achieving the SDGs, including SDG5 depends on radical review of fiscal policy. Recent report shows how the domination of finance over the economy affects women in a special way, due to the multiple austerity measures imposed to protect corporations. Tax exemption policies are largely catering to corporate sector. Illicit financial flows restrict the state’s ability to act for environmental social good. Overall, we have a region which is highly politically charged, with a retrogression from human rights, democracy and tax justice. For example, in Ecuador there are protests against IMF conditions on fuel subsidies. Argentina in a deep currency crisis and once against submitted to IMF. The are six more poor people every minute.
Under the IMF policy prescription, women, especially black and indigenous women, are impacted the most. Fiscal consolidation has a link with femicide. Brazil adopted constitutional amendment 95 which froze primary expenses for 20 years, while the present government is enacting mass privatisation and dismantling of social security through reforming pensions and other neoliberal policies. Recent INESC analysis, shows that this favours the rich, while adopting the rhetoric of efficiency and good environment for business. There’s no mention of gender, race, ethnic gaps, which are the building blocks of inequality in Brazil. Emphasis on the family, women’s role in the home – it is absurd. Racist and sexist plan goes against SDG 2030 agenda and commitments to address global warming.
On the IMF, we welcome that it is incorporating gender more. But we want more, sexual, reproductive rights included. Would like to ask, what is the commitment to SDG 5 if the fiscal consolidation policies are among the main causes for gender inequality? How do you address this contradiction?
Stefania Fabrizio (IMF): Would like to step back and give an overview of how the Fund started to get into these issues of inequality and gender. Both are multifaceted issues. 2015 – in context of UN Financing for Development embracing SDGs, the Fund came out in the arena, making clear that as financial institution with mandate for global financial stability – our main goal is this, and growth. Not all, but growth is necessary condition as we have seen in countries where years and years of development have been wiped out in a minute. Macroeconomic stability is the first step. We are not a development bank, we come from macroeconomic perspective. We have committed to a number of initiatives, here is where gender inequality comes in. We have recognised importance of these issues for macroeconomic stability and growth. Importance of gender not only as pool of additional resources, but new productivity. These issues are macro-critical (impact with stability and growth). Not saying these other issues are not relevant, but that is not our area. There are many other institutions out there, but our advantage is this area. We can do analytical work on gender and operationalise it at the country level. Looked at FLFP, the jobs that women hold, women hold jobs more subject to lay-off than other jobs in face of technology – we need to face this. Launched report on Unpaid Work two days ago, which shows that women work two more hours daily than men. Even in Norway, women work 20% more than men, because of unpaid care work. There we have moved to areas of financial inclusion, in terms of women’s access to financial services, relation to financial stability. Looked at several aspects of women that are all related to the sphere in which we operate.
In 43 countries, have analysed issues of gender, in 86 Article IVs we have analysed these issues of both inequality and gender. It depends on reforms and agenda of the country. Across all kinds of countries – for example in India we have suggested reforms on sanitation, helping women feel more safe, how that can create incentives for women to work more? As well as education and what that means for the wellbeing of the economy.
Fiscal policy was mentioned, we have done a lot of work on gender budgeting, ensuring governments are accountable for monitoring and output of those measures. Also, in area of public financial management – surveillance to progs to technical assistance. Models in general equilibrium context on how reforms can have distributional impact and gender. Have been applied in more than 20 countries.
There is not one for all model in terms of the issues we analyse – these issues are very complex.
Mercedes Vera Martin (IMF): Stefania gave you an overview of how we are looking at gender issues at an institutional level. Wanted to give overview of in MENA region. Nabil, we appreciate the report you issued, and we have been in collaboration on the report. Want to step back and look at how we engage with authorities and how the countries come to IMF. Unfortunately, this doesn’t happen in booming years, when countries have unsustainable policies and need for adjustment whether the IMF is there or not. Not just women, but everyone affected by adjustment. The first priority is to restore macroeconomic stability – this is essential for addressing gender gap and issues in the country. The call for fiscal consolidation is because there is a need for policies to bring spending to a sustainable levels, such as adjustments on the wage bill. If countries are spending 50% on wage bill, this restricts space to do other things. For example, the energy subsidy reform you mentioned, the biggest benefit of subsidy goes to richest, poorest don’t benefit (including women) which is why we are replacing with targeted transfers. Yes there might be leakage in the transfers, but we have been collaborating with the World Bank and others to reduce leakages.
When we design adjustment, we put a lot of emphasis in defending the most vulnerable. For example, social transfers, education for women. There are challenges to bringing women to the labour market, what are the challenges, is it education, cultural issues, childcare support? There are all these issues. But these are not issues we are going to resolve in the short term, takes a long time.
Bilquis mentioned the Pakistan programme – although it’s only been in place for three months, it has measures for favouring participation of women in economic activity. We are working with the authorities in facilitating access to finance and reducing education gap.
Stefania Fabrizio (IMF): The subsidy issue has come up in several, want to stress that on average of every $1 of fuel subsidy, 25c goes to the poor, 75c to rich. Subsidies are not a good way to address inequality, and are also big incentive to destroy environment, which incentives fuel. The best practice is to reduce subsidies gradually and have other mitigating measures in place ahead of reform. We go to a country, analyse extent of subsidy. In some countries it’s huge, larger than health/education spending together. We look at household surveys and look at who benefits, after that, we put in place a reform. With that information, we look at what product should go first, should it be frontloaded? Phasing and timespan very important. From there look at mitigating measures put in place for poor. Not just an issue in terms of taking off subsidies, it’s about the design.
- IMF often recommends increasing VAT, which disproportionately harms women. What about recommending other forms of collecting revenue which are less harmful and dealing with illicit financial flows?
- Interesting that several CSOs on the panel are arguing to have gender transformative conditions – I disagree. I would rather that instead of this, the IMF did holistic human rights impact assessments and gender impact assessment of its policies.
- How are you seeing the social spending minimum, is that enough to tackle all of the issues here?
- VAT not regressive in terms of ‘sin tax’ on alcohol and cigarettes, as mostly consumed by men. Should move to scrutinise VAT on several things.
- On the definition of middle income and poor. Lots of people on middle incomes support families in poverty. Main question, what’s the line between high, middle, low?
- Privatisation impacts women more directly and harshly in terms of not ringfencing services like health, education?
- How would you reconcile the new social spending policy of IMF with new social policies we are seeing from IMF?
Mahinour El Badrawi (moderator): Thank you for bringing up interlinkages between human rights and governance. VAT not regressive on sin tax, but VAT is a regressive tax in general because it taxes everybody regardless of income level, social status. For example, VAT on menstrual products should not be taxes. In Egypt, the army is not taxed, but menstruation products are taxed.
Nabil Abdo (Oxfam International): I wanted to begin with issue of subsidy – always same answer from the IMF that subsidies are regressive and we are not contesting this. The issue is that removal of the subsidy harms the poorest the most. You can talk about the environment but nothing on environment has been proposed, like, for example affordable renewal energy. When we say subsidy removal harms the poor the most and middle income families, it’s because the IMF discourse just looks at rich and poor, nothing in between. Need to recognise IMF policies have an impact on women. We are not demanding that the IMF solves all these issues, we are demanding that IMF addresses the impacts of its own policies. Not everyone negatively affected by IMF policies – only the poor, middle income, women.
We want redistributive policies to decrease economic and gender inequalities. Universal social protection, not targeted, is the answer. Social spending very important, not just indicative targets. Yes IMF published a publication on unpaid work, but when we talk about this it’s about recognising, redistributing and representation. Every time we raise the issue of representation and civic space, there is silence. So how can we say we have consultation? Every time we raise these questions about negative impacts, we get silence. We should be able to raise these impacts without IMF being defensive.
Mercedes Vera Martin (IMF): VAT is regressive but it is an efficient way to mobilise revenue. Should focus on fiscal policy, increases fiscal space on social spending. But we do agree with you (Serena).
Stefania Fabrizio (IMF): In developing countries, it’s hard to collect revenues, but important because they have small envelope to spend. VAT may be regressive, but depends a lot on design of the tax. Depends on the threshold. We see it as a source of revenues for spending.
(Responding to a question on asking about VAT as a source of revenue even when there’s austerity). Yes, important to work on both sides, you have to work on efficiency of spending. But you have to increase envelope through tax. With the fiscal policy package, you can’t isolate just one tax. The poor don’t even pay VAT on most of the products they consume.
Mercedes Vera Martin (IMF): Social protection floors. Working with partners specifically on social projects. Can’t give tally on how minimum floors being implemented.
Stefania Fabrizio (IMF): I would like to address the women’s right approach. That is not our work. There are other institutions that do that. Our mandate is to analyse macroeconomics. Importance of international collaboration.
Kalpana Kochar (IMF): We would not have legitimacy if we went out and started talking about human rights. Asking us to take a human rights approach, we cannot. Everyone comes at it from their own approach.
Bilquis Tahira (Shirakat): My point on religion has been vindicated perfectly, all followers think they are right. Is CEDAW not binding on IMF because it has trillions of dollars? From the 2019 Pakistan loan, GST already increased by 25%, there has been an 8% rise in petrol, which isn’t only used for cars, but also public transport. You can imagine the impact on women’s mobility. There is a gender indicator, there is targeted social protection – give some rupees to some poor people. IMF needs to comply with all these treaties, and its role in achieving SDGs.
Iara Pietricovsky (INESC): We have a problem of language, of understanding that we need to build another IMF, that must come with openness from institution and people within the institution. Failure over such a long period of history. I’ve been in this field for 35 years, when you talk about maintaining macroeconomic stability, the result of getting it is really damaging. In Brazil, decreasing minimum wage, 50% population have 100 dollars per month to live. We are going back to the hunger map of the UN. We have faced 20 years of frozen primary expenditures – health cuts, education cuts. We are listening to Kristalina Georgieva (IMF Managing Director), but let’s talk sincerely and honestly, what it means to develop gender commitment in the IMF, in the institution, can be much more interesting, much more sustainable and fairer for women everywhere. But we must be honest, women to women. We understand this is capitalism, but we have to change, can’t stay in neoliberal, austerity policies. IMF has important responsibility for building that ideology. We want to rebuild what the World Bank, IMF and UN are. Let’s sit honestly and try to find new solutions.