Tallinn 26 May, 2011
At a meeting on Estonia’s development cooperation using aid money for other countries, Indian Professor Jayati Ghosh, suggested Estonians can best assist global development by pushing national and European policy-makers for more technical assistance and solidarity support that is not linked to preconditions of market liberalisation.
Professor Rainer Kattel introduced Professor Ghosh as the first named Ragnar Nurkse Visiting Professor at Tallinn University of Technology's Public Administration Department. She is also Chairperson at the Centre for Economic Studies and Planning at the School of Social Sciences at the Jawaharlal Nehru University in New Delhi, India. “Women in the Developing World”, was her keynote address at the public lecture organised by the Tallinn University of Technology's Technology Governance Study Group and the Arengukoostöö Ümarlaud MTÜ (Estonian Roundtable for Development Cooperation).
Ghosh explained that there was a need to focus on the gender. It was necessary to understand how globalisation over the last three decades has to a large extent relied upon the input of women, and stated there was a clear need to appreciate how the global financial crisis has affected them.
The last thirty years saw a wave of globalisation that culminated in a series of booms across the newly connected global economy. The benefits of these boom periods have however been dispersed unequally, with the share being paid out to labour in the form of wages decreasing over time. As an aside, she added that wages in the US have also not increased in two generations. As production has been increasingly geographically diversified and finished products have come to be composed of parts and services from a wide array of different countries the role of women in the production process has become more widespread, especially in the major manufacturing hubs of Asia. This was due to women’s need to earn money before starting families as well as being more easy to push around in the work place.
Though Asia's economies display a wide diversity, with newly industrialised countries such as South Korea and Singapore sitting alongside poorer neighbours like the Philippines and the powerhouses of India and China, they have all displayed two aspects of female labour practices, namely their increased involvement in production during the 1990’s and the growth of the care economy, such as nursing and the care of children and the elderly.
The Washington Consensus policies of the 1980s, that promoted classical neoliberal economics that urged a reduction of the role of the state and low regulation of the private sector, led to a drastic shift in the ownership of manufacturing businesses across the developed world. The resulting modern management strategies made extensive use of female workers which had previously been engaged in unpaid female employment, as they tend to offer a greater attention to detail and a better propensity for hand-eye coordination, needed particularly on the assembly lines for electronics. In wage discussions these young women were unlikely to expect sole-wage-earner level salaries and were unwilling to rally behind calls for better working conditions. Following nature's life cycle many bow out of employment to start families at precisely the time they were passing their peak utility to the firm. This kind of work is stressful and workers burn out after about 6 years, which was why it is women aged between 18 and 35 years that are overwhelmingly employed in Asian factories.
Exposés in the western media in the late 1990s shone a spotlight onto the unsafe working conditions across Asian sweatshops, Ghosh said. Whilst the large brand-sensitive companies went on to improve working conditions on the surface, a deeper look indicates that these changes typically involved the outsourcing of production. Away from their factories women were engaged in work that did not require their presence at the host factory, such as sewing buttons or even mixing chemicals, and which was paid on a piecemeal basis dependent on the amount of work completed. The result was the emergence of small, often unaccountable, business operations and an increase in home employment. This was portrayed as offering the opportunity to be at home and to raise children whilst still working, however this was in unregulated conditions that could be dangerous. Moreover, the risks of production were shared more by these workers as lower orders meant less work was available, so women felt the effects directly on their incomes. The production system is such that risks were delegated down to the lowest paid workers, who are the most flexible part of the production cycle, as seen during the financial crisis when their profit margins or contracts have largely evaporated.
The rapid rise of the care economy has been another avenue in which women have dominated, and which has resulted in adverse knock-on effects. With the growth in female employment in the industrialised centres of the developed and developing world employment opportunities have emerged in the form of housework, nursing and child care. In developed countries this has been taken up by lower paid migrants from the developing world, typically travelling alone, with the result that the remaining children and households need to be cared for by others through their repatriated income.
This offers an example of the double-edged nature of this kind of employment, which could be liberating when not done under duress, but which may still result in uneven development. The delegation of care moves on down to rural families whose children and households are cared for on an unpaid basis by ageing family members, effectively underwriting the labour enjoyed by families in more developed and urbanised centres, a situation set to increase with the ageing populations.
Having laid out the way the system uses women and how they contribute to the global economic system Ghosh explained ways in which women were suffering disproportionally due to the global financial crisis, especially in relation to nutrition. While high food prices are externally imposed, women tend to consume less because of self-deprivation, so that they are increasingly suffering from malnutrition. This has serious consequences for maternal and infant health. Babies are increasingly underweight with negative effects on brain development leaving a long negative legacy.
This situation has been exacerbated by two recent food crises, a widely publicised one in 2008 and a more protracted crisis that is currently under way, in which prices have surpassed their 2008 levels. Ghosh lays responsibility for these food crises squarely at the door of legislators who over the last 30 years have removed or watered down regulations that were aimed at preventing speculation within the food commodity markets.
During the moderated panel discussion Professor Ghosh was asked where Estonian and European resources can be directed. Ghosh said that while there should be solidarity with other countries, it was important to include demands for much needed policy changes at the global level. Ghosh proposed the reinstatement of regulations like capital controls that can be used to prevent capital from affecting the futures markets of food commodities. In addition, policies that could help counteract speculation and meet basic needs like the building up of international and national grain reserves. Institutions such as The World Bank and the International Monetary Fund that are essentially controlled by the US and EU member states have, it was noted, previously advised countries against these policies. Also emphasised was the need to use the IMF's Compensatory Financing Facility, which was set up to help countries deal with export shortfalls caused by exogenous shocks.
Asked whether developing countries affect change in their own policies at the national level, Ghosh replied that they occasionally can but that they sometimes can not.. All people have problems in convincing their national governments to do things that are better for the poor in their countries. But the problem was also at the international level. In some instances aid budgets tie a recipient to the policies of the host country, which are still overwhelmingly in favour of capital account and market liberalisation. The evidence shows that where countries defy the World Bank and IMF as Malawi had done, they tend to bring practical benefits. Malawi followed advice to liberalise agriculture and not have grain reserves, but after being hit by a famine controlled agriculture, issued subsidies and established a national grain reserve, all of which insulated it from the current food crisis. However, with the ruling elites of developing countries being mostly western educated and keen to emulate the developed world, citizens of developed countries need to push their governments to propose policies that will better serve the interests of the developing world.
Marianne Mikko, member of Estonia's parliament, said that it was important that Estonia consider how to be European instead of following the US. This was important for its approach to international development cooperation.
Professor Rainer Kattel, Chair of Innovation Policy and Technology Governance at Tallinn University of Technology said that official Estonian policy before the crisis was neoliberal and that after the crisis it was even more neoliberal. He said that it was important that Estonia got its own house in order before advising other countries how to develop.
Other speakers at the event, which was chaired by the Elise Nikonov Estonian Debating Society, included Maari Ross, GLEN volunteer with women entrepreneurs in Ethiopia; and Anu Raisma, the first Estonian health care expert in Afghanistan.
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