Debt, Development and Gender

Gender equality is a crucial component of successful development, yet austerity puts a disproportionate burden on women, increasing their economic vulnerability and affecting societal outcomes. Conversely, economic growth that leads to increased female labor force participation without compensatory investments in social care provisioning and better distribution of caregiving responsibilities will ultimately compromise investment and growth.

Since improving women’s status and economic activity has macroeconomic benefits for economic growth and development, wherever rising debt burdens and debt service payments compete with scarce fiscal resources for health, education and social assistance in normal times – or lead to the cutbacks associated with austerity – progress on gender equality is undermined and development outcomes are unwound.

In a new book chapter published in Feminism in Public Debt: A Human Rights Approach, Penelope Hawkins and Marina Zucker-Marques present proposals for building a feminist agenda on debt. They argue that gender discrimination from sovereign debt relations is not limited to crisis phases but instead emerges during the expansionary phase of an economic development model dependent on debt-led growth. This debt-led growth model makes developing countries fragile to external shocks, which in turn worsens gender inequalities.

The authors write that supporting developing countries to move away from debt-led growth and expand fiscal space for gender equality-boosting development requires an alternative approach to debt sustainability that can account for social and economic goals, putting human rights at the forefront.

Key findings:

• A new approach to debt sustainability assessments must better bridge creditor and debtor needs and commitments, shifting from an evaluation of short-term flexibility in meeting domestic and foreign claims of creditors to one where more flexibility into servicing debts is introduced, without sacrificing long-term development objectives.
• Efforts can build on the Sustainable Development Finance Assessment (SDFA) framework developed by the United Nations Conference on Trade and Development (UNCTAD), which has an explicit focus on the achievement of basic development goals and structural development. Its objective is to underline that there are a range of policy options to maintain external financial and public sector sustainability while also achieving the UN 2030 Sustainable Development Goals (SDGs).
• Strategies to scale up development finance need to minimize the exposure to external shocks, cross-border capital flows and external debt service burdens.
• This scaling up of development finance requires a rekindling of multilateralism to boost official development assistance, the staunching of illicit financial flows and a redesigned international financial architecture where developing countries have access to affordable debt and timely and orderly debt workouts.

A revised approach to debt sustainability can uphold gender equality as part of a development agenda, which ensures public finances deliver necessary public services. Without this, the authors argue that a feminist development agenda will remain elusive.