Ladies and gentlemen,
Three years ago, at the fiftythird meeting for the Commission on the Status of Women, the impact of the financial crisis on women was on top of the agenda.
It was clear by the time that women were disproportionally affected by the crisis – hit by unemployment, cut-backs in health and education, tightened credit, and growing exposure to poverty and violence.
Today, the topic of the crisis and its impacts is equally important, not least in my own region, Europe, where the financial crisis has been followed by a severe debt crisis.
However, discussions are far less intense.
Therefore, I am pleased that we get the opportunity here, today, to return to some of the issues that were discussed at the 2009 meeting, and that we can also address the important challenges that lie ahead:
– how to ensure that women’s rights remain on the political agenda, and how to secure financing for gender equality and women’s empowerment in the years to come.
So, what strategies should be chosen in the wake of the global, financial crisis?
First and foremost, of course, it is key to develop existing policy tools such as gender mainstreaming and gender budgeting – approaches that will be discussed, in depth, later in this session.
However, in this introductory speech I will propose that the current situation also demands that we, as advocates of women’s rights, also take part in broader discussions, beyond the mainstreaming approach.
In particular, I think, women’s voices are needed in discussions on the global financial architecture and on the economic ideas that structure the management of the economic crisis.
Such a broader approach is important since the predominant economic paradigm is decisive for what set of policy options that are available, at all, in relation to gender equality and women’s empowerment.
When I look back at the discussions on women and the financial crisis that were held here in New York in 2009, I am struck by the very strong arguments put forward for increasing the financing of women’s empowerment, as a response to the crisis.
The financial crisis was seen as an opportunity to launch new gender policies.
Investments in women and girls were presented as new, key policies for economic growth and economic recovery; “smart economics”, according to the World Bank.
Or, as noted by the Commission on the Status of Women:
Financing women’s empowerment is key, since investments in women have multiplier effects on productivity, efficiency and sustained economic growth.
In consideration of all these convincing arguments, you could have hoped for a turn of the tide in the art of managing economic crises – away from austerity packages and cut backs on social services such as education and health, and towards more of expansionary policies, in support of long-term employment and social cohesion.
And indeed, we did see a bit of that, but unfortunately, we did see far too little.
Today, in 2012, it is painfully clear that during the years of financial crisis, priority was not given to policies in favor of women or girls.
From the point of view of economics, the idea of investments in people as smart economics was in fact largely neglected; we did not see capital investments – such as employment creation, investments in education, or investments in health.
Instead, following a few attempts to stimulate the economy, in the early phase of the crisis, governments soon put most of their energies into making financial markets work, protecting banks and keeping public budgets deficits down.
We can say that at the end of the day, governments returned to the neo-liberal policies that have had the upper hand in global economic affairs since the 1980s.
Why was this so? And can a change towards more active and gender sensitive governments be expected so develop?
I will try to answer these questions in the following, by discussing, first – in short – the current status of neo-liberalism, in particular with regard to economic growth, and second, by presenting the key ideas of a new, emerging, economic paradigm, that we may call an investment paradigm, or an economic paradigm of sustainable growth.
First: Neo-liberalism – what is the heart of neo-liberalism and what does it mean to women?
In short, neo-liberalism is an economic theory that builds on the idea of efficient markets as drivers of growth.
Politically, this means that markets should be extended and liberalized, with little control, since they are expected to work well and to produce prosperity and wealth, if not harmed by political interventions.
The sphere of government should be limited, including the choice of economic policies.
Government must ensure low inflation and balanced budgets.
What then do neo-liberal policies mean for women?
This topic has been extensively studied, in particular as regards the effects of IMF conditionality policies – a pure variety of neo-liberal policymaking.
Results are also fairly clear, at least as regards impacts of cut backs in the public sector. Policies that cut back on social investments or that commercialize or privatize education and health services adversely affect women.
Over all, it is obvious that neo-liberalism has a male bias, when it argues that the key driver of wealth creation is market competition. In the neo-liberal narrative, economic activities that are not commercialized – such as for example large parts of the caring economy – are put aside as less important. In this way, women’s productive contributions are ignored and marginalized.
Over the years, neo-liberal ideas have been criticized and gradually modified. It is striking, however, how well the over-all design of neo-liberal, economic institutions has been preserved, also after the crisis. Policies in the EU are a case in point. Caught in a sovereign debt crisis, several EU-members in the euro zone are currently pursuing neo-liberal austerity policies, perfectly according to the textbook. Priority is given to the protection of liberalized financial markets, in spite of huge social costs – not least for women and children.
The situation is, in fact, a bit surprising.
In the summer of 2009, the front-page of The Economist showed a standard book of economic theory, melting down.
At this time, leading economists were aso on the defensive, since they had not been able to predict or explain the crisis.
In their models, markets were always efficient and models did not take account of the role of banks or the speculative behavior of investors.
Influential critics, such as Paul Krugman, talked about the return of ‘depression economics’.
At that time, many of us were quite convinced that neo-liberal theories would be rejected and gradually replaced. This, however, did not happen.
Now, the question is, will a transformative moment in economic policy eventually come?
And if so, what is the alternative appraoch?
I believe myself that a transformative moment will come,
And I would argue that there is, in fact, a strong alternative economic paradigm already in the making.
This new approach is the set of policies that builds on ideas of sustainable growth.
These ideas, I am sure, are well known to you. They are present in most UN discussions on social and economic affairs, as for example in discussions on investments in women’s education as “productive” – or “smart economics”.
However, so far, advocates of sustainable investment policies typically present their ideas as a complement to a neo-liberal macro-economic framework, not as an alternative.
Governments are supposed to invest in employment creation, education and health, but these investments should be made within the limited financial space that neo-liberal policies allow. When conflicts arise, as in times of economic crisis, social investment policies are put aside.
In my view, there is a need for a more aggressive approach.
In fact, the economics of sustainable development cannot, forever, be reconciled with neo-liberal macro economics.
What research on sustainable growth has shown is that countries grow rich when they invest in health and education.
Rich countries have low death rates, mature populations and large resources of public goods, such as knowledge and social trust.
This narrative of sustainable growth is, indeed, is very different from the idea that national wealth is created primarily by liberalizing efficient markets.
In fact, sustainable development does sometimes even demand that the free play of market forces be limited – to protect people or the environment.
And if this is so, we simply cannot accept current policy responses to the crisis.
It is not even economically acceptable that the protection of private banks and the freedom of investors on open markets are today given higher priority in the management of economic crises, than women’s employment and health or the educational progress of a society’s children and youth.
As the World Bank once said, investing in girls and women is smart economics – apart from being an obvious matter of justice and fairness.
How do we proceed?
I would argue that not least European women have an important role to play, since the tensions between neo-liberal ideas of market competition and competing ideas of sustainable development have been particularly marked within the EU.
Just like in the UN, ideas of sustainable development have attracted great attention within the EU, and in particular since the turn of the millennium.
This has been important in many areas, such as environmental policy and social policy.
It has also, I would argue, had an impact on discussions on gender equality.
In the EU Lisbon agenda, for example, that was launched in year 2000, ideas of social investment were instrumental in paving the way for more progressive family policies, including parental reforms and expansion of childcare facilities.
Due to greater knowledge of sustainable economics, attention in the EU has also turned more towards social dimensions of growth and prosperity.
Social cohesion, for example, has become an important goal.
I would say that this growing interest in the social dimension has decreased, somewhat, the male bias of EU economic policies.
To sum up, I think that it is now time for European women to make their voices heard.
When an ever deeper economic crisis in the euro zone now threatens progress already made in the empowerment of European women,
Policy makers must finally choose what strategies of growth they want to give priority.
Should people come first or should markets come first?
Decisions taken by European policymakers on this matter, will influence discussions on women’s role in development, worldwide.
I would also argue that it is time for women to strengthen cooperation with political allies that share an interest in more sustainable policies in times of economic crisis.
Environmentalists, for example, are just as eager to fight for more sustainable economic policies as are feminists.
Finally, I am convinced that policies for sustainable development constitute an important platform for women in our endeavor to mobilize financial resources and to widen the scope for women’s empowerment.
In contrast to neo-liberal market policies, economic policies for sustainable development put women’s issues at the top of the political agenda.
From this platform of sustainable economics, further feminist claims can – and should – be made.
Thank you.
Lena Sommestad 