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    Advising Policy, Alleviating Poverty

     

     
     
    International Trade Forum - Issue 3-4/2008 
     

    © ITC Women Thrive 2008

    In the current financial crisis, governments need to provide opportunities for women living in poverty by including them in policy dialogue.

    In the current economic climate, forward movements in market access and trade capacity building for developing countries can seem unlikely. But at both bilateral and multilateral levels opportunities exist to create policies that would increase access to global markets, credit and technical skills for women living in poverty around the world.

    Women Thrive Worldwide (formerly the Women's Edge Coalition) is a non-profit organization focused on making United States policies foster economic opportunity for women living in poverty. Women Thrive brings together over 50 organizations and 25,000 individuals, united in the belief that empowering women is not only right, but also the most effective long-term solution to world poverty.

    In this unique trade environment, Women Thrive advises policymakers in the United States on how preferences help women in developing countries and their economies as a whole, while having positive impacts on the United States economy. It also strives to extend gender integration in trade policy, capacity-building efforts and sustainable development programmes. By holistically linking the approach to these programmes, 2009 can be a productive year in global trade.

    Global trade, the financial crisis and women

    The last decade has seen some of the world's poorest regions begin to climb out of poverty. In just the last six years, for example, Africa's exports have jumped by about $240 billion, which is far more than either humanitarian assistance from wealthy countries or remittances from the 16 million Africans working abroad. More than 100,000 new jobs have been created on the continent in the export-based textile industry alone, with up to 90% of these jobs going to women living in poverty. It's estimated that each woman employed in the textile sector supports up to seven family members.  

    But as Americans and Europeans rein in their spending due to the global financial crisis, these exports from Africa will fall, putting thousands of new manufacturing jobs in danger. Women are most likely to have jobs in the informal sectors of the economy with virtually no job security and are the first to be laid off. Even when they have jobs in the formal sector, women are disproportionately affected: they are more likely to be unskilled in comparison to their male counterparts in factories and are more likely to be made redundant first.

    But the financial crisis will affect more than just export levels. Women in low-income countries will also have to piece together food and shelter with fewer remittances from relatives living abroad. According to the Inter-American Development Bank, money flowing into Latin America has already slowed.

    The last decade has also seen the coming of age for microcredit, which created new opportunities for millions of the world's poorest women through small loans to start businesses and gain access to global markets. Predictions place small, unsecured loans under as much threat as other credit, if not more. And unlike many other borrowers, these women have few alternative sources of financing.

    As producers of food and providers for their families, women across the developing world are already feeling the brunt of another crisis: rising food prices. In sub-Saharan Africa, for example, women produce up to 80% of basic foodstuffs both for household consumption and for sale. The economic slowdown will delay investments in agriculture and infrastructure projects that are vital for the long-term outlook of these societies.

    Of course, all of this is occurring as developed nations set aside billions of dollars to rescue their banks and financial systems, and these same countries are likely to slash their international assistance budgets.

    Increased local, regional and global trade can play a pivotal role in providing the economic sustainability women need to support themselves, their families and their national economies. Accordingly, policymakers in the United States and elsewhere must consider women's role in the global economy when devising solutions and future international trade policies.

    Women have a disproportionately high risk of being poor and yet, in many cultures, they are responsible for providing for the well-being of their families. This makes investing in women an effective strategy for reducing global poverty.

    Take women into account in policy dialogue

    While the United States needs to stabilize its markets, this is not the time to halt all movement on market access and increasing economic opportunity around the world. How the nation's newly elected administration will engage international partners on trade and economics is still unknown.  

    But some facts are certain. Leaders in the United States in both the House of Representatives and the Senate have signalled that they will review all United States trade preference programmes, which could either be an opportunity for positive advancements or for increased United States protectionism. Committing to increasing environmental and labour protections should help the administration to find common ground with Democratic leaders in Congress who have had hesitations about extending trade. The improved consensus, as well as the new protections themselves, should be beneficial for women labourers, farmers and entrepreneurs. In addition, working together on priorities for domestic trade adjustment assistance for workers would increase space for discussion on how trade can benefit developing countries.

    Despite the financial crisis or fears that the United States will be less aggressive in its approach to global trade, there is an opportunity to explore how certain aspects of trade can help economies both at home and abroad. Our view is that the current United States tariff and quota system inadvertently hits least developed countries (LDCs) the hardest, and United States trade preference programmes designed to remedy this often leave out the very poorest countries. The solution is to extend better coverage to these LDCs, expanding duty-free, quota-free product coverage to 100% so that it includes sectors that are largely populated by women, such as agriculture and textiles, while providing permanent benefits to encourage long-term investment and sustainable growth. The time is right for a full dialogue in the United States on this issue.

    Finally, the sheer scale of the financial crisis requires a more collaborative and multi-stakeholder approach to solutions. This engagement could result in a more synchronized approach to other pressing trade issues, namely a more robust and coordinated take on the "Aid for Trade" agenda.



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