In societies where gender inequality persists, the potential for economic growth remains largely untapped. Simply bridging the gap in women’s labor force participation has the potential to boost economic output by an impressive average of 35 percent.
Unfortunately, the journey towards achieving gender equality has been hindered by sluggish progress. Moreover, unforeseen circumstances like health and climate disasters, social unrest, and conflicts further exacerbate gender inequality.
These shocks directly impact women’s lives and livelihoods, often impeding their access to education, employment, and other opportunities.
Let’s imagine a fictional country called Equinoxia, where gender inequality prevails despite ongoing efforts for change. The country’s government, aware of the immense untapped potential, launched a worldwide campaign called “rise together.”
It aims to close the gender gap in the labor force, promoting women’s empowerment and fostering economic growth. However, the situation takes an interesting turn when a catastrophic environmental event, known as the “Great Energy Surge,” plunges Equinoxia into darkness, disrupting the entire power grid.
The aftermath of this energy crisis presents both challenges and opportunities. While the country struggles to recover from the chaos, the government recognizes the urgent need to address the impact of the crisis on gender inequality.
The “rise together” campaign is redesigned to not only address the existing gender gaps but also ensure that women play a pivotal role in rebuilding the nation.
All in all, effective economic and financial policies can mitigate negative outcomes and enhance economic recovery and resilience. By prioritizing gender equality, these policies benefit everyone.
The pandemic, despite its setbacks for women, led to innovative policies that specifically supported women and expanded social safety nets. This enables targeted assistance to address challenges like rising food and fuel prices. Policymakers have access to proven solutions and can adopt gender-sensitive macroeconomic actions.
One crucial step is to increase investment in women’s human capital, particularly in emerging and developing economies. Equal access for women to essentials like food, healthcare, and education yields significant benefits.
For instance, cash transfers can assist families in affording necessities, particularly in countries with limited social safety nets.
During the pandemic, Brazil implemented the Emergency Aid Cash Transfer Program, which specifically provided increased benefits to households led by women. IMF staff estimates reveal that without Emergency Aid, the poverty rate among these households would have surged from 11 percent to over 30 percent.
However, thanks to the program, the poverty rate decreased to approximately 8 percent. In Egypt, cash assistance was expanded to support low-income single mothers enabling them to prioritize their children’s health and education.
In Togo, the use of mobile technology facilitated the swift distribution of emergency financial aid, particularly benefiting women.
Another proven solution is to empower women to participate in the workforce or start their own businesses. This requires implementing reforms in taxation, public spending, financial infrastructure, regulations, and labor markets.
Additionally, ensuring access to high-quality and affordable childcare not only enables more women to join the workforce but also generates direct job opportunities.
Norway witnessed a significant increase in mothers’ employment by 32 percent following the expansion of universal childcare. In emerging and developing economies, access to mobile phones and the Internet presents economic opportunities.
IMF’s research demonstrates that traditional and digital finance plays a crucial role in narrowing the gender gap in financial service accessibility, including microlending.
This, in turn, leads to reduced income inequality and higher economic growth.
Addressing biases is a crucial third area of focus. Shockingly, the World Bank’s survey of 190 countries revealed that only 12 countries had achieved legal gender equality. Gender-based discrimination within social institutions results in a staggering $6 trillion economic cost, as estimated by the Organisation for Economic Co-operation and Development.
However, in recent years, countries have taken significant steps to mitigate these costs. They have implemented social and legal measures such as combating underage marriage, criminalizing domestic violence, and enhancing the representation of women in elected positions.
According to IMF analysis, the presence of women in financial institutions and financial policymaking correlates with enhanced financial resilience.
Moreover, in fintech firms and the corporate sector, higher representation of women in leadership positions is linked to improved performance and increased profitability, respectively.
For several years, the IMF has provided assistance to its member countries in implementing and enhancing gender policies. In a recent development, the IMF’s Executive Board approved the organization’s first comprehensive Strategy for Mainstreaming Gender.
This strategy aims to assist member countries in tailoring pro-gender equality policies to their specific contexts and circumstances.
The IMF’s strategy acknowledges that macroeconomic and financial policies can unintentionally impact women and men differently. To address this issue, the IMF is actively assisting policymakers in identifying and rectifying these biases.
This involves applying a gender lens to all major activities, including regular country policy surveillance, program design and implementation, and capacity development support. By doing so, the IMF aims to promote greater gender equality and ensure that policies and programs benefit all individuals equitably.
In closing, achieving gender equality is not only a matter of social justice but also a crucial driver of economic growth and resilience. The global community must prioritize investment in women’s human capital, enable their participation in the workforce, address biases within social institutions, and promote women’s representation in decision-making roles.
The IMF’s commitment to mainstreaming gender and supporting member countries in implementing pro-gender policies is a significant step forward. By applying a gender lens to macroeconomic and financial policies, we can create a more inclusive and prosperous world where the dividends of gender equality benefit everyone.
It is only through collective efforts that we can overcome barriers, empower women, and harness the full potential of half the world’s population.
Together, let us strive toward a future where gender equality is not just an aspiration but a reality.
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