WUNRN
Via UNIFEM Currents - July 2008
Women’s Consultation on Financing
for Development
Formal Submission to the Financing
for Development Review Process
included in this WUNRN release.
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Women’s Working Group Develops Recommendations on Financing for Development
On 16–17 June 2008, the Women’s Working Group (WWG) on Financing for Development (FFD), with the support of UNIFEM, held a consultation in New York that concluded with the presentation of a set of recommendations to Ambassador Abdelaziz of Egypt and Ambassador Løvald of Norway, Co-Chairs of the FFD review process, as inputs to the outcome document of the upcoming Follow-up International Conference on Financing for Development to Review the Implementation of the Monterrey Consensus in Doha, Qatar, 29 November – 2 December 2008.
Speakers and discussants stressed the importance of employing a gender perspective and analysis in addressing the national, international and systemic challenges of financing development, particularly in the context of the current financial, food and climate change crises. They called for a “holistic approach to engendering the FFD process, which looks at the interconnections among trade and finance in all forms — aid, investment, debt and domestic savings.”
The consultation included a strong focus on the promotion of participatory and gender-responsive budgets, the strengthening of commitments to decent work, and the utilization of progressive and redistributive taxation schemes. It also addressed issues of:
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22 June 2008
Women’s
Consultation on Financing for Development
June 16-17 2008
Formal
Submission to the Financing for Development Review Process
Preamble
1. In 2002, heads of State and Government gathered in
2.
Much more needs to happen to address the national, international and systemic
challenges of financing development spawned by an environment of intensified
and unregulated trade and financial liberalization processes that often bear
unpredictable negative consequences for productivity, growth, employment,
poverty eradication and income distribution goals. The current financial, food
and climate change crises are stark realities in a volatile environment marked
by confusing market competition processes. A gender analysis raises further
questions on the connection of these trends and volatilities to (a) women’s
wages, employment and unpaid labor, (b) state of social reproductive and social
protection capacities, resources and services, and (c) within-country and
within-household sharing of financial risks and shocks. Gender inequality is
embedded in asymmetrical social structures and systemic processes that underpin
the uneven spread of financial risks and widening economic disparities which
are experienced most acutely by those most disadvantaged especially women. For
example, empirical evidence show that women in developing countries who work
for very low wages in the large informal sector also carry a disproportionate
share of financial risks as household finance managers in a context where there
is inadequate or non-existent publicly provided social welfare and protection
for the poor.
3. This set of proposals that substantively address
women’s inter-linking concerns in the Monterrey Consensus was discussed and
adopted at a women’s consultation meeting convened by the Women’s Working Group
on Financing for Development in New York on June 16 and 17 2008. The women’s
consultation, attended by 50 women and men was supported by UNIFEM and the
Financing for Development Office in DESA as well as benefited from intensive
interaction and collaboration with the larger Doha NGO Group of Networks, a
process that enabled women’s issues and gender equality concerns to be
recognized by a larger constituency. Thus, our proposals align with but also
enhance several key recommendations found in the draft Civil Society Key
Recommendations for the Doha Draft Outcome Document.
Key
Recommendations for Forward Actions
Chapter 1: Domestic Resource
Mobilization
The Monterrey Consensus highlighted domestic resource
mobilization, both public and private, as the principal source of financing for
development. It called for an enabling national environment where macroeconomic
policies and regulatory frameworks that support growth, employment, poverty
eradication, redistribution, equality and human development coexist in
interaction with participatory and accountable governance systems and
processes. Central in this commitment is the issue of domestic policy space and
how the international institutional environment supports or undermines the
capacity of national governments to achieve development.
1. Promote
Participatory and Gender Responsive Budgets
The greater allocation of domestic resources
toward gender equality is critical to achieving MDG3 and signals a country’s
commitment to gender equality and good governance through investments of their
own resources. The Monterrey Consensus had already stressed the critical need
for reinforcing national efforts in building capacity for gender budget
policies and practice while the 2005 High Level Dialogue emphasized that
domestic resource mobilization should encourage gender-responsive budgeting to
ensure that relevant commitments to gender equality, poverty eradication and
social welfare and protection are resourced. To be efficient effective and
accountable, Public Finance Management systems and practices need to be
supportive rather than undermining of participatory and gender responsive
budgeting.
Toward
this end, resources should be allocated for the following:
(1) training
of government bureaucrats on the use of participatory and gender responsive
budgets;
(2) collection
and utilization of gender disaggregated data, including time-use surveys
that measure women’s unpaid work and its contribution to the national economy
to make visible women’s actual economic contribution and gender-responsive
poverty measure in the National Accounts System (ECLAC Quito Consensus 2007);
and
(3) meaningful and regular participation of women’s rights
advocacy groups and representatives of civil society in participatory and
gender responsive budget processes.
Gender budget
practices may also be applied to the planning and implementation of ODA funded
projects and programs both on the part of donor and recipient countries.
2. Strengthen the national commitment to
and enforcement of Decent Work
National enforcement of policies and regulation that
promote decent work is a strategy that simultaneously responds to poverty
reduction, gender equality and equitable growth. It promotes good governance
and the rule of law by ensuring that the rights of a large majority of citizens
(workers) such as their right to a living wage and collective bargaining
processes are protected by law. Related to this, we welcome a recent report
that criticized the World Bank’s Annual Doing Business Report which ranks
countries on whether or not they have a favorable business environment, and
that gives low rankings to countries attempting to promote the decent work
principles.
Policies to create decent work should fully account
for rapid changes in labor markets and opportunities as governments begin to
put in place the necessary adjustments toward a properly sequenced and managed
trade liberalization that enhances rather than weaken domestic productive capacity.
Efforts are needed to immediately reach the large numbers of women in Export
Processing Zones and in informal work.
We recommend special attention be given to women
workers in the following aspects:
(1) need for quality jobs for women workers
(2) training that improves women’s options across different sectors of the
labor market
(3) access to finance for women entrepreneurs, especially in small and
medium enterprises
(4) provision of health insurance including access to reproductive health
care services
(5) provision of maternity benefits and access to affordable child care,
and
(6) protecting the rights of women workers to self-organization and
self-representation in social dialogues
3. Utilize
progressive and fair taxation schemes including tax rebates and tax relief for
the poor and women
Progressive tax regimes can optimize revenues, while
easing the income disparities that have marked growth in many countries (UNIFEM
2007). In this light we support progressive fair and efficient taxation,
including taxation of transnational corporations, addressing more forcefully
the problem of tax evasion and tax havens, and strengthening world-wide tax
cooperation and setting up an International Tax Organization, all of which have
been proposed and endorsed widely by CSOs and citizens’ groups.
In addition, we recommend the following additional tax
measures:
(1) tax rebates to women in recognition of their contribution to the society,
their historical discrimination in land ownership as well as their unequal
sharing of family responsibilities
(2) tax relief for the poor
and for single household heads a majority of whom are women who either care for
the very old or the very young
Chapter 2: Foreign Direct Investments
and Private Capital Flows
The Monterrey Consensus for the most part valorized
the increase in the volume of private and public capital flows to developing
countries, the changing composition and the differentiated impacts of various
kinds of capital flows, as well as, their changing geography. While largely
recognizing the opportunities for financing development from these kinds of
flows, governments also acknowledged in a preliminary and generalized way the
need to “mitigate the impact of excessive volatility of short-term capital
flows are important and must be considered. Given each country’s varying degree
of national capacity, managing national external debt profiles, paying careful
attention to currency and liquidity risk, strengthening prudential regulations
and supervision of all financial institutions, including highly leveraged
institutions, liberalizing capital flows in an orderly and well sequenced
process consistent with development objectives, and implementation, on a
progressive and voluntary basis, of codes and standards agreed
internationally….” (Monterrey Consensus, para 25).
We join in the effort by our colleagues in civil
society in putting forward the call for a multilateral mechanism that would
subject investors and transnational corporations to more lawfully binding norms
and standards. In the meantime, investor behavior continues to pose problems to
developing country governments that have difficulty dealing with the effects of
wage competition and the global tax race to the bottom. In a situation of
liberalized financial markets that continue to exhibit tendencies toward
crisis, these governments need to deal with an increasingly riskier environment
as they seek opportunities for sourcing finances for development through
private capital flows while ensuring stability of growth for their economies.
Given the current context of yet another financial
crisis, the time to act is now. The present financial turmoil showed that
existing national regulatory mechanisms even within developed countries as well
as international economic surveillance and information exchange systems are
inadequate and unable to respond to the increased emergent risk-taking
practices of banks and other non-bank financial institutions and to the growing
speculative behavior of investors and traders in an environment of increasing
volatility and risks. Financial crises have employment and earnings effects, as
well as indirect effects on welfare and poverty reduction that ultimately reach
women and men differentially, with women who are care providers often taking on
the burden of risk sharing and adjustment in the household.
In the spirit of supporting the call for binding norms
for transnational corporations in the United Nations, we propose the joint
recommendations, as follows:
1. Convene
within the United Nations and at the soonest possible time, an
inter-governmental meeting addressed to how governments can efficiently and in
an effective way manage their competition for FDI and other capital flows
2.
Strengthen at the national sphere the rule of law and citizen’s access to
information and the legal system in order to compel investors and traders to
behave as “good citizens”.
Chapter
3: Trade
The
framework of rapid and intensified trade liberalization that is espoused by the
World Trade Organization and which is driving some regional and bilateral free
trade agreements has been criticized for its anti-development elements. Trade
is not an end in itself – it must serve pro-people and inclusive development,
the realization of human rights and the right to development for all, and the
achievement of a caring economy and environmental sustainability. A gender
perspective of trade is a holistic one, supportive of the broader framework of
international conventions and multilateral commitment for the common good.
Trade
affects gender equality through employment and income opportunities or losses,
as well as shifts in the costs of basic goods and services. There is as yet no
mechanism to monitor the extent to which current trade policies have worked to
reduce gender inequalities, but trade liberalization, which is normally
accompanied by lower revenue collection from tariffs, can slow investments in public
services and shift tax burdens towards labor in ways that limit women’s
productivity. Some industries favored by trade improve women’s employment
prospects as a general principle, but others, including some high-tech sectors
that offer better wages, may not benefit women because of persistent gender
biases that reduce women’s chances of cultivating appropriate skills. This is
seen in the widely criticized practice of export oriented industries of
regarding women as low-cost inputs into production (UNIFEM 2007).
1. Actively
apply special and differential treatment and less-than-full reciprocity as
principles for trade negotiations.
In
the current trade liberalization climate, countries are unable to protect their
industries some of which had traditionally produced incomes and supplied
affordable basic services for women. Particularly in the area of food and
agriculture, women are the majority producers of the world’s staple crops. As
small producers, they lack access to land, markets, credit, and other inputs.
This could be remedied through targeted domestic support for small producers.
As countries grow in their ability to integrate into
the global economy, the international environment must support their newly
emerging capacities. All international trade agreements should make allowances
for countries to address varying national development circumstances. Policy
options might include the identification of specific industries for support;
the encouragement of foreign direct investment that supports development
targets; some amount of trade protection through reasonable tariffs and related
measures that help domestic producers develop their capacities; and the
upgrading of skills and technology so that a country’s competitive advantage is
not based solely on low-cost labor and other inputs, but also on technological
and human development (UNIFEM 2007).
2. Support
and strengthen women’s meaningful involvement in multi-stakeholder oversight
processes and mechanisms related to trade agreements and reforms at all levels.
Women
are consistently not involved in a meaningful way in trade negotiations
processes nor is a gender perspective included in the analysis and
understanding of the potential impacts of trade agreements and trade-related
adjustments. Civil society and parliamentary oversight must be incorporated
into regular trade impact reviews at all levels o that there could be
monitoring of the social and gender impacts of trade. The effort to draw up a
list of indicators that are sensitive to uncovering contradictions in relation
to social targets and commitments in trade must also be funded and supported.
Chapter 4:
International Financial and Technical Cooperation
Although the overall share of ODA in the financing
landscape is smaller than private financial flows and trade, in poorer
countries, ODA is essential for achieving the internationally agreed
development goals, the MDGs included. There is recognition that aid flows are
highly volatile and threatens the continuity of development programs, for instance,
on gender equality. It is in this light that we welcome the emergence of
South-South Cooperation and other innovative sources of financing for
development.
Recognizing that donors allocate ODA when they fund
specific projects, and recipient governments determine the allocation of donor
financing given as direct budgetary support or sector support, we recommend to:
1. Ensure
additionality and predictability of aid flows
Women worldwide are the most affected by poverty and
structural adjustment programs, with the privatization of education and health
services and of other resources & services essential to social reproduction
having a more severe impact on women. Projects that support women’s empowerment
suffer a shortage of funds and must be strengthened if progress is to be made.
Moreover, gender and social transformation takes place over a long period of
time and must receive sustained support to become possible. This is true not
only of developing countries where aid flows are highly concentrated in but
also of certain sectors and regions within middle income countries which must
also be reached by traditional and new donors.
With
this in sight, donor governments must immediately meet its pledge of 0.7% of
their GNP as official development assistance to developing countries. In
addition, donors and recipients should scale up the share of ODA for gender
equality and women’s empowerment to reach 10% by 2010 and 20% by 2015, ensuring
that there are year-to-year increases by some agreed upon level. They should
avoid ODA distorting practices such as inflating their ODA statistics by
arbitrarily including various types of costs or shuffling funds from an old to
a new item without any real topping up of finances or counting debt relief as
part of ODA.
As
well, the increase in ODA should not lead to a cycle of debt for the recipient
country. Rather the major increase in ODA should be felt in the grants
component of aid rather than in the loan component.
2. Remove conditionalities and
strengthen mutual responsibility, accountability and transparency of donors and
recipient countries
ODA
must not be used to exercise power over recipient countries through the use
among others of conditionalities. Neither should ODA be linked to trade
negotiations. Instead, ODA must be used to develop the capacity of the
recipient country’s economy to generate and mobilize its own resources, to
promote development while reducing structural inequalities including gender
inequality. In short, ODA should be a contribution that truly supports national
economic and social development within a framework of a vibrant and robust
democratic society and transparent and accountable governments propelled by
their own empowered political actors.
To
ensure that the benefits of additional financing benefit gender equality,
social justice, and inclusion, ODA processes must uphold the mutual
responsibility and obligations of governments to fulfill the internationally
agreed development norms, goals, targets and actions which have been identified
in the Beijing Platform for Action, Convention on the Elimination of All Forms
of Discrimination Against Women, International Convention on Population and
Development, Education For All, among others, without resorting to impositions
and conditionalities within the narrow framework of aid giving.
Mutual accountability should ensure equal partnership
between donors and recipients and facilitate governments of both donor and
recipient countries to be accountable to various publics, women included.
Negotiations on ODA must country-driven rather than donor-driven, and should be
democratic and inclusive in its processes and practices, as well as, subject to
a multilateral and multi-stakeholder review forum such as the ECOSOC’s
Development Cooperation Forum.
3. Develop gender-sensitive indicators, tools and methodologies for the
evaluation of the quality and development effectiveness of aid
In
support of mutual responsibility and accountability for gender equality on the
part of both donors and recipients, monitoring and evaluative tools and
methodologies need to be developed to assess the extent to which aid
allocations address or do not address
the achievement of redistributive, social and gender goals. The categorization
of gender, along with human rights and environmental sustainability, as cross
cutting issues have led to difficulty in tracking outcomes within basket funds
and sector-wide programming. The development of gender-informed tools and
methodologies must be carried out in a participatory process and should involve
both traditional and emerging donors and across several aid modalities.
Moreover such exercise should take place across all levels, with resources
being allocated to enable women’s rights advocates meaningfully participate in
national, regional and international processes. The United Nations system in
particular its various agencies and entities charged with the promotion of
women’s rights and gender equality must be the location of this process at the
multilateral sphere.
Chapter 5: Debt
The
inclusion of debt into the Monterrey Consensus provided an opportunity for the
international community to commit to new principles related to the long-time
problem of debt burden among developing countries. Nevertheless, the concrete
agreements centered on a limited debt write-off mechanisms through the HIPC
whose underlying weakness may be found in the unbalanced emphasis on financing
and on required policy conditionalities rather than on the development
dimension of external debt.
1. Undertake a more critical round of
review and redefinition of the Debt Sustainability Framework that should
involve not only national governments but also civil society including women’s
rights organizations
Current
strategies for debt relief are only oriented to resolve fiscal and financial
and not development problems. Most
countries are still suffering from the huge burden of debts and the impact of
losing much needed resources to debt service. There is an urgent need to expand
and deepen debt cancellation to cover not only low income countries and middle
income countries burdened with debt. The revised Debt Sustainability Framework
must be a framework that gives centrality to human development goals and human
rights, which includes gender equality and women’s empowerment.
2. Loans and debt cancellation must
be de-linked from conditionalities
Policy
conditionalities that have accompanied loans as well as debt cancellation
programs (ex HIPC) have had negative
effects on women, the poor and marginalized, livelihoods and economies, and on
the environment. The impacts of these
conditionalities negate the positive outcomes of debt cancellation.
Donors must not unilaterally determine where to use
funds freed from debt cancellation, such as, for instance, to support gender
equality programs. A transparent, accountable and democratic process of
deciding on where to utilize the funds must include in-country CSOs throughout
the whole process, women’s rights organizations included. Such a process, at the same time, obligates financial transactions to
recognize and uphold the mutual responsibility and obligations of governments
to protect human rights, ensure gender equality and women’s empowerment, and
promote environmental sustainability.
3. In the UN, a political dialogue
must be initiated to deal with the question of odious / illegitimate debts.
There is
growing recognition of the problem of odious and illegitimate debt, the shared
responsibility of lenders and borrowers in the emergence and perpetuation of
this problem, and the justness of the call to cancel odious and illegitimate
debts.
Comprehensive
country debt audits are encouraged to address among others the question of illegitimacy
of debt. There is also need to develop a
common platform for Principled and Responsible Financing to be upheld by both
lenders and borrowers.
Chapter 6: Systemic Issues
Gender
disparities reflect and are related to the structural imbalances in the global
economic system, which are expressed as the development gaps between North and
South, the marginalization of groups of peoples from core growth processes and
their low levels of participation and decision-making in global economic
governance. Addressing these inequities is an important step towards responding
to the needs of people, women and men, on the ground.
The framework for enhancing the coherence and
consistency of the international monetary, financial and trading systems in
support of development requires a commitment to bringing into the rubric of the
United Nations entities such as the Basel Committee where developing countries
are not represented but whose actions and decisions have an impact on financial
markets, as well as, to prioritizing the promotion of social objectives and
policies over narrow financial objectives.
Toward this end, we recommend:
1. Continue to ensure that FFD
follow-up mechanisms, consultative processes, and opportunities for technical
inputs in all of its multi-stakeholder arenas are effective spaces for
consistent and regular inputs on gender equality by women’s rights
organizations and networks and gender equality experts.
Global
instability and financial crises have a disproportionately negative impact on
women, hence, the need to prevent and manage the occurrence of crises informed
by gender analysis. The FFD’s multi-stakeholder approach is uniquely situated
to bring in women’s organizations and networks and gender experts for the
identification of innovative policy approaches and solutions that explicitly
address the gender dimensions of macroeconomic and exchange rate coordination
(especially of large economies), the development of financial codes and
standards, and the regulation of private sector activities. Discussions can
also include exploration and development of mechanisms to collectively provide
resources for programs and institutions (including national women’s
machineries) that meet social objectives and gender equality.
Strengthening
the institutional links and arrangements within the UN system to support women
and women’s organizations in all levels of planning, monitoring and evaluation
of development processes at the national and international settings is needed
to bolster the implementation of commitments under the Monterrey Consensus
(para. 4 and para. 64). Coherence and consistency is also needed between the
Monterrey Consensus and the Beijing Platform for Action.
The FFD’s
multi-stakeholder approach and strong participation from civil society
including women’s rights organizations and networks may be replicated elsewhere
in the UN system. For instance, the Development Cooperation Forum which is a
multi-stakeholder platform with a more flexible agenda may be used for more
frequent information exchange on best practices and dialogue for peer learning
and that can provide the boost for the exploration
of new approaches on participatory and gender-sensitive
international, regional, and national economic governance mechanisms.
As
such, all UN entities on gender equality and women’s empowerment should
strengthen their capacity to link with issues and areas not traditionally
identified with gender equality. Efforts should not remain small and sporadic.
This will open up new thinking and strategies on promoting gender equality and
women’s empowerment in the context of building new consensuses around
development and global governance within the United Nations system.
Chapter 7: Emerging Issues
1. Financing to address the food and
climate crises should not be in the form of loans.
The food
energy and climate crises render peoples of the South, and women who dominate
the food sector, more vulnerable to the accumulation of new loans. Governments
should not offer or enter into loan-financing for seed purchases and similar
food and agriculture programs, or loan-financing of climate mitigation and
adaptation mechanisms.
Staying
Engaged for Gender Equality
The Women’s Working Group on the FfD commits itself to
keep fully engaged in all follow-up processes and to build bridges between
commitments and actions on development, trade, finance, debt and systemic
issues and women’s rights and gender equality commitment and goals which are
consistent with the holistic agenda of the Monterrey Consensus. Engendering the
financing for development process cannot be realized without a holistic
approach that looks at the inter-connections among trade and finance in all its
different form – aid, investment, debt and domestic savings.