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WOMEN
IMF and World Bank Structural Adjustment Programs and Their Effects
on Women
by Zonny Woods
Since the early 1980's, the International Monetary Fund (IMF) and the International Bank of Reconstruction and Development (IBRD) or the World Bank, have implemented economic policies known as Structural Adjustment Programs (SAPs). Designed to assist developing countries to emerge from the debt crisis, SAPs were established as a conditionality for the re-scheduling of existing loans as well as granting further loans to Third World countries. This conditionality is a set of targets or obligations undertaken by developing countries in order to obtain aid or loans. There are two types of policies established as prerequisites for access to loans: stabilization and structural adjustment.
Stabilization involves short term measures to restore balance of payments, while structural adjustment measures are implemented on a longer term basis, to 'restructure the economy and generate economic growth'. These policies are closely linked and usually involve devaluation of currency, cuts in public spending, elimination of subsidies, cuts in the civil service, privatization of state owned industries, opening of local economies to foreign investment and an emphasis on export promotion in order to earn foreign currency to apply to debt servicing.
As a direct result of these policies, women have suffered in three areas: health and welfare, employment and education. The effects of these policies have been felt even more intensively as social services are cut, particularly with rising poverty among women.
With respect to the debt crisis, the goal of the IMF and the World Bank Structural Adjustment programs has been to ensure that indebted countries will maintain their balance of payments. Developing countries had no choice but to turn to them since without IMF intervention and approval, there were few resources for them to access in order to keep their economies afloat. As a condition for their lending, the IMF and the World Bank called for drastic restructuring of their economies.
There are some differences between IMF and World Bank adjustment policies in terms of the process but not the content. IMF programs are targeted at the short term, working to stabilize economies in order to address balance of payments problems. World Bank deals with the long term restructuring of an economy, by changing institutions and economies in the medium term. All of this affects the standard of living of people, particularly the poor. Credit is cut for local manufacturing, resulting in loss of local industry and jobs, particularly for women, yet transnational companies have access to cheap credit in their home countries and cheap labor in developing countries. Government deficits are seen as part of the problem, and as a result social services are cut.
As a result of all these policies, SAPs cause:
Unemployment, where women are the ones to lose jobs first
Cuts in wages, where women earn less than men
Increase in food prices, which women are responsible to provide
Decrease in subsistence agriculture, where women are traders
and growers, while men control all the cash crops
Reduction in social spending, where the responsibility for health, welfare and education becomes the women's
Both the IMF and the World Bank claim that SAPs will ensure that countries grow out of their debt, yet with decades of adjustment, there is not one case which proves this point. The "logic" behind SAP's is: the IMF and the World Bank grant developing countries loans, to pay interest on outstanding loans which they cannot pay because they are bankrupt.
The IMF and the World Bank establish conditions on lending based on adjustment packages regardless of particularities of the countries, with no respect for the cultural composition of a country, least of all gender issues. Alleviating poverty, ensuring food security , reducing population growth, improving the quality of a country's future labor force, and properly using the natural resource base all depend substantially on women, yet all of these are under attack through the Bank's adjustment programs.
The results of structural adjustment programs have been far from beneficial to the social welfare and economic condition of developing countries and their people, as had been predicted by the World Bank and the IMF. Incomes have been reduced as a result of rising unemployment. The removal of subsidies on food prices have skyrocketed making basic food inaccessible to the poor, and government resources have shifted from social spending to debt servicing. Rather than alleviate poverty in the recipient countries which implemented adjustment policies, SAPs have contributed to further sinking them into economic crisis.
A major problem with SAPs is that they have been developed as "one size fits all". Everyone receives the same prescription regardless of particular experiences. In a similar fashion as those development policies that have failed in the past, SAPs were off the shelf, drafted in the north for those in the south, without taking into account social and cultural context, least of all the impact on different sectors of the population. Little thought was given to how children, disabled people, rural dwellers, urban poor, the elderly, children and women, would be affected by SAPs.
The poor majorities living in the developing countries that have followed and implemented World Bank and IMF programs have found themselves with few options for survival. Women have been disproportionately socially and economically damaged by these policies. Worldwide, women are half of the world's population, head one-third of all households, are responsible for half of the world food production, receive 1/10 of total income and own 1/100 of the world's property. Women, who constitute the poorest of the poor, have had a disproportionate burden placed on them as a result of structural adjustment policies, which has further contributed to the feminization of poverty.
Economic policies such as structural adjustment programs are one more part of the vicious cycle of economic hardship for women. This added hardship may be invisible at the economic level, yet they become visible once one begins examining the declining health standards, rising unemployment among women, and even high fertility rate since there is a direct correlation between education and population growth. Women, from the starting point of their unequal social and economic status, earn less, own less and control less, and thus are in a fragile and unequal situation. When SAPs are implemented, particularly the suppression of social services, a major component of SAPs affects the most vulnerable members of society first.
Separation between the different roles women play within and outside the home is difficult, since for the most part the two overlap. The role women play in all areas of the economy and in social reproduction are closely inter-linked, any shift in one affects the other. It is in this context that the effects of SAPs must be examined. When looking at the effects of SAPs on women, their role in agriculture, food production, marketing and processing of agricultural products needs to be looked at. Since women are traditionally the care givers and health providers, both within and outside the formal monetarized sectors, cuts in public services will invariably affect poor women.
When looking at the effects of structural adjustment, all of these aspects of women's lives must be considered. In the area of health, women have lost jobs when health services are cut since they comprise the majority of lower paid workers in health services. They are expected to care for the sick and the elderly when hospitals become too expensive and privatized. Because they have children, women need health services more often, and are left with few options when these disappear. In developing countries, reduction in health spending ranges from cuts in employees, to closure of hospitals and clinics, particularly in the rural areas, leaving rural women with no access to badly needed healthcare and medicines. The cuts in health have meant that women have been forced to assume greater responsibility, for the family and even the community.
Throughout the developing world, particularly in Africa, women provide a large percentage of the agriculture labor force. As well as performing a great deal of the agricultural labor in the rural areas, women must also do most of the unpaid work in the household. When women farm, they not only farm for subsistence or family consumption but often farm crops which they can also market however small scale this may be, as this provides extra income for rural families. Rural women have also the responsibility for the storage of agricultural products and the seeds for each year's crop. With all the responsibilities that they carry in the rural areas, women seldom own their own land and sometimes there are institutional barriers which prevent them from holding title to land. They may sometimes be able to hold land through inheritance and direct purchase although women seldom are able to access credit.
Structural Adjustment requires the increase and promotion of products for exports. These are often labor intensive jobs such as the garment and electronics industry, both of which employ a majority of women at low wages. As a practice, the manufacturing industry prefers to hire women at a young age, and discards of their services quickly and easily once they become pregnant or lose function of a part of their body, such as eyesight in the electronic sector. Many companies will not hire pregnant women. An argument made for the hiring of women over men in the manufacturing sector is that women have higher productivity in labor intensive jobs because of the skills learned at home that are taught to women. Women are pushed in the labor market into these jobs, but little or no provisions for child care or education for their children are made, yet both are crucial for social development needs. Since the responsibility for child care remains with the mother, they will often suffer when governments cut these types of services as a direct adjustment measure.
Although women may be earning an income outside the home, it is a far step from equality for women. The double or triple workload of women as they join the formal and informal sector intensifies the exploitation of their labor. Women's labor is seen as elastic, forever being stretched and added to, but there are limits to this conceived "elasticity" and in the end, something needs to give.
The debt crisis has forced the majority of the developing world's population to continually live in a status of financial instability. The poor majorities of third world countries have been forced to suffer the results of debts incurred by their governments, debts from which they never benefited. The standard of living decreases in countries as a direct result of funds being channeled for debt repayment. Banks that lent money to Third World countries have been overcompensated for the debts incurred by their governments. Despite the fact that the debt has been repaid many times over, countries continue to pay for the debt.
When conducting assessments of the effects of SAPs on women, it becomes obvious that the needs of women have been overlooked. Proponents of economic policies and those in power, at all levels, forget the important role women play in the economy and all other aspects of society. The market, is not just about profit, it encompasses the totality of the human condition, including the interrelationship between races, cultures and gender. It's ridiculous to think that the market has no effect on women, or that when there are major shifts in the market these have the potential to affect men and women differently.
The inequality of the position of women has benefited the market and the capitalist system greatly. Women not only represent a cheap labor force, but they also contribute to the survival of economic systems though their unpaid labor. The market is not neutral, rather it benefits from the inequality of those who contribute to it and yet are powerless within the system.
Rather than breaking down these barriers to women's access to secure employment, equal pay for equal work, access to credit, services and education, SAPs have tended to exacerbate existing cultural and economic biases about the role women play in the economy.
As a result of this there have been some impacts which could be generalized. First of all stabilization, aimed at slowing down the economic system can represent a considerable loss of employment for women. The degree to which they are affected will depend on the degree to which women are involved in the informal sector, the length of the recession triggered by stabilization, and the kinds of fallback mechanisms available to women. It is possible that the latter would affect urban women the most since they may not have the community or support of the social network and land for subsistence farming that women in the rural areas may have.
In many countries it is women who comprise the majority of people working in the informal economy. If jobs in the service sector are cut, particularly those where women are highly employed, decisions about the situation of a group or sector of women are being made. The informal sector is affected as jobs in the formal sector are cut. There is less need for women working as domestics, for example. As jobs are lost in the formal sector, the number of people working in the informal sector increases.
Although there has been a growing awareness of the disproportionately negative effect that SAPs have on women, there has not been a shift in these policies. It is often claimed by the banks that it is too early to tell, that there are some hardships for the poor for a while but in the long run they will benefit. The results we have seen in terms of women's experience tells us that we do not need a few decades of steady decrease in the standard of living of women for it to be considered valid evidence.
Structural adjustment has intensified the struggle of women for survival. Generally, the economic crisis has resulted in less food at higher prices. Devaluation of currency has also resulted in higher prices for food. There have been cuts to social services, and food subsidies have been reduced. The current socio-economic condition of women can be described as one where there are low levels of education, literacy rates and incomes. Women have few occupational skills, high unemployment, and limited access to credit and land. Women become the poorest of the poor for a variety of reasons. Among these is the marginalization of women from decision making, the power over the structures of production, trade and finance. There is an alarming increase of women and children living in poverty both in the North and the South. Increasing numbers of these women are homeless, refugees and slum dwellers.
Poverty alleviation should be the first priority of any economic policy. If there are any worthwhile forms of restructuring the economy, these must be the ones which will ultimately lead to social and economic equity, across gender and class. Policies need to look at gender barriers. Those people with economic power need to ensure that resources are channeled to women and that at the same time they are not implementing economic policies which will continue to affect women negatively. We have seen that when men benefit, benefits do not trickle down to women, and often contribute to a widening economic gap between men and women if issues of equity are not addressed.
Economic growth does not translate into social and economic equity. This has been the experience in industrialized countries.When commodity prices for exports from the south are low, no combination of adjustment, austerity and efficiency can make export promotion the engine of successful economic growth and social development.
There is a need to gather and analyze data that will ensure that women's economic activities are emphasized. Unless there is an understanding of how women's lives are affected by economic policies, these policies will continue to hinder rather than promote development and poverty alleviation.
We need to begin creating alternative ways in which economics are examined, to develop a model which empowers all sectors of society, regardless of race, gender, class. Sensitization to the effects of economic policies on women needs to happen among economic policy makers.
People at the grassroots level need to undergo a process that sees the need to educate the grassroots on economics as an integral step to change these policies. If economic literacy happens, poor women will be able to be mobilized more effectively. They alone are the ones who will articulate and assist in the development of policies which will be more responsive to their needs. In order to develop alternative policies, people must understand the economic policies which affect their everyday lives and chances for survival. The most important change that needs to happen is for women to have an equal voice in redefining development priorities.
"(SAPs are) a mechanism to shift the burden of economic mis-management and financial mismanagement from the North to South, and from the Southern elites to the Southern communities and people. Structural adjustments is also a policy to continue colonial trade and economic patterns developed during the colonial period but which the Northern powers want to continue in the post-colonial period. Economically speaking, we (countries in the South) are more dependent on the ex-colonial powers than we ever were. The World Bank and the IMF are playing the role that our ex-colonial masters used to play."
Martin Knor, Third World Network
"Behind structural adjustment there is a model for development that has two fundamental characteristics. One is the reinforcement of an elite that will increase exploitation of producers. And the second is the reinforcement of the patriarchy."
Diana Lima Hanem, Associaçâo de Estudos e Alternative in Guinnea-Bissau
"Underlying these policies (SAPs) is a set of assumptions about women's work: that women are housewives, do not work and therefore, that women can fill the gap created by cuts in social services. Of course, (the policy) is labeled privatization. The governments must not spend money on health, education, and human infrastructure, this must be left to the private sector or the household, meaning to women. The foundation is that women's time and labour can be exploited."
Peggy Antrobus, DAWN
"Never doubt that a small committed group can change the world, it's the only thing that ever has."
Margaret Mead
Cite as: Youth Sourcebook on Sustainable Development. Winnipeg: IISD, 1995. Online. Internet. http://iisd.ca/youth/ysbk077.htm.