1. Gender and Trade
  2. About Us
  3. News
    1. News Archive
    2. Past Events
    3. Gender and Trade Newsletters
  4. Case Studies
    1. Asia
    2. Caribbean
    3. Africa
    4. America
    5. Pacific
    6. Collective Case Studies
  5. Country Profiles
    1. Africa
    2. Americas
    3. Asian Countries
    4. Caribbean
    5. Europe
    6. Pacific
  6. Publications
  7. Resources
    1. Useful Links
    2. Key Resources
    3. Glossary
    4. Latest Reports
  8. Members
    1. Forums
  9. Contact Us

Financing Gender Equality

Financing Gender Equality is Financing Development
UNIFEM Discussion Paper, February 2008 (Summary)

UNDP Gender Equality Strategy document (2008) is based on the premise that gender equality is “absolutely indivisible from the human development goal of real improvements in people’s lives and in the choices and opportunities open to them”.
One of the recommendations of the UN Millennium Project (2005)1 is to focus on women’s and girls’ health and education, their access to economic and political opportunities and right to control assets” as one of the strategies towards poverty reduction. UNDP Gender Equality Strategy document (2008) is based on the premise that gender equality is “absolutely indivisible from the human development goal of real improvements in people’s lives and in the choices and opportunities open to them”. It is in this line that the paper “Financing Gender Equality is Financing development” draws our attention and emphasizes that all aspects of development financing should not only fully recognize women’s economic contributions but also support their economic security and rights. If economic growth and human development has to go hand in hand then recognition of women’s full participation in the economy backed by adequate development finance to the needs of women becomes crucial. There comes the urge for an effective macroeconomic policy. All countries rely on two basic sources of financing - domestic and international. Macroeconomic policies regulate domestic resources and international financing comes in the form of foreign direct investment, private capital flows, international trade and external assistance. External assistance mainly through official development assistance (ODA) in the form of cancellation of debt repayment obligations is of priority for many low-income countries. Emerging economies seem to depend on private capital flows and trade and less on external burrowing since they are able to access private capital market easily.

It is argued that in most cases government strategies focus on growth by controlling inflationary tendencies2 and the tools used to contain inflation involve raising interest rates and cutting public investment . A common argument in favour of such plans is that public investment3 crowds out private investment, thus hindering economic development. This leads to serious problems as public expenditure has a crucial role in development and so in many countries poverty continues to increase despite improved macroeconomic management and gaps between rich and poor widens4. Thus, there is growing concern for the need to bring about ‘high-quality economic growth’ which is both equitable and sustainable.

The analysis also highlights that while in recent times gender equality is recognised as essential to human development very little has been actually done towards this end. It is suggested that policy alternatives must constitute ways to promote both employment generation and productive growth, reduce disparity in income and wealth, moderate vulnerabilities due to changes in the global economy, bring about protection against environmental and social risks and explore innovative sources of financing.

Since every country has the responsibility to advance gender equality goals it is best done by setting a balanced domestic economic policy agenda. Domestic resource mobilization should lead towards providing opportunities for people at all level to lead better lives while promoting decent work. National policies needs to foster decent work which includes training to improve women’s options across different sectors in the labour market and access to finance for women entrepreneurs. Social security and child care centres remain critical towards ensuring decent work. Growth without employment widens economic disparity. A gendered approach to public investment could look at the gaps in women’s economic participation and productivity and facilitate women’s access to health care, education and employment.

Another point which deserves special mention is the need to invest in socially reproductive activities and broaden social insurance and protection. While it may start with the recognition of the significant economic contribution made by socially reproductive activities which everyone benefits from, however, the responsibilities are not equally shared. Women therefore have limited employment options and tend to cluster in part-time or home-based work. Further, equitable access to assets such as land, capital and natural resources ensures that all members of a society have opportunities to increase their capabilities, better their lives and contribute to the society as a whole. Increasing government investment in socially reproductive activities can be seen as a contribution to the effectiveness of fiscal policy.5

It is likewise necessary to bring down the negative social and economic impacts of business cycles and policies designed to counter economic downturns. It is stated that the “objective here is to minimize the pro cyclical bias of fiscal policy in order to free up resources needed to sustain social and investment policies”. For this, progressive tax regime which is effective is important as it will not only optimize revenues but will also play a positive role in easing income disparities. As far as foreign aid is concerned, the analysis gives us a note of caution as it is the most volatile of all of macroeconomic variables. However, with the shift to new aid modalities, including harmonization of donor funds through direct support to national budgets, mechanisms are required at the national level to ensure that sufficient resources flow to the targeted program and accountability for results can be upheld. The process and result as to how the aid will translate into development should be clear.

Success of trade liberalization depends on the coherence between the internal and external economic policy of the country and not all countries have therefore benefited. Some new approaches emphasize a flexible mix of policies individually tailored to achieve national development targets6. It is also indicated that since poorer countries have not been able to grasp the benefits of trade liberalization all international trade agreements should make allowances for countries to address varying national development circumstances and apply special and differential treatment and less than full reciprocity as principles for negotiation. This will ensure a level playing field. Finally, for the said conditions to exist an expanded policy space is essential as it provides governments with room to initiate public action towards achieving the MDGs. These suggestions for a well worked out national policy will contribute to enhancement of domestic resources mobilization planned to reduce inequalities.

The underlying current suggested in the form of gender-responsive budgets and results based public expenditure management will definitely augur well for the governments who are known to fail in keeping the national and international promises towards reducing poverty and inequality. For all this, engaging with the excluded groups and women in the formulation and implementation of policies is equally important.

1.UN Millimiunm Project 2005. Investing in Development: A Practical Plan to Achieve the Millennium Development Goal. Overview. p-xx
2.Suggestions for alternatives to inflation-targeting are found in a series of papers produced by the Political Economy Research Institute at the University of Massachusetts-Amherst. See www.peri.umass.edu.
3.Roy, Rathin and Heuty, Antoine, eds. Fiscal Space for Human Development. New York: United Nations Development Programme.
4.Nissanke, Machiko and Erik Thorbecke (2005). “Channels and Policy Debate in the Globalization-Inequality-Poverty Nexus,” UNU Wider Discussion Paper No. 2005/08, Helsinki: UNU WIDER,
5.Adesina (2007) discusses how retrenchment in state provisioning of health and educational services was borne by end-users, particularly women who have the obligation to provide nurturing and childcare. Adesina (2007) also discusses the how the increased imposition of use-fee charges have increased social exclusion.
6.UNCTAD (2006). Trade and Development Report 2006. Geneva: UNCTAD.
Summary by Bansari Nag: Financing Gender Equality is Financing Development, UNIFEM Discussion Paper, February 2008.