Is gender parity the key to economic prosperity? The IMF says ‘yes’

Why does the world need more women in the labour market and managerial positions? Kristalina Georgieva, the International Monetary Fund’s Managing Director, shares her thoughts on the Global Conversation.

Research by the International Monetary Fund suggests that global GDP will increase when women are granted an equal playing field in the labour market and decision-making roles.

More specifically, reducing the gender gap in labour markets could boost GDP in emerging and developing economies by 8 per cent. Closing the gap entirely would increase GDP by 23 per cent on average.

But why is women’s empowerment essential for economic growth and development?

Underrepresentation in decision-making roles, particularly in politics, is a widespread issue. Statistically, women account for less than 25 per cent of representatives in parliament in seven EU member states including HungaryIreland and Greece

The European Parliament fares better with a gender balance of 40 per cent women to 60 per cent men. The leaders of the EP and the European Commission are also women while some of Europe’smost influential financial bodies, like the European Central Bank and the European Investment Bank, have female presidents.

When it comes to climate change, the EIBdiscovered in 2022 that increasing the number of women in corporate decision-making roles could lead to a 0.5 per cent drop in CO2 emissions.

So how can Europe increase the number of women in positions of power to fast-track sustainable development and boost economic growth? Kristalina Georgieva, the Managing Director of the IMF shares her thoughts on the latest episode of the Global Conversation.

Europe still has work to do

**Sasha Vakulina, Euronews:**Ms Georgieva, two thirds of the world’s most prosperous countries in the world are in Europe, and yet income inequality is rife across the continent. How does inequality affect economic growth?

Kristalina Georgieva, IMF Managing Director: Growth and inequality are very tightly connected. But let me make a very important point for Europe: as a European, I’m proud that Europe is a place where attention to inclusion and equality has been relatively higher than in many other places. And as a result, Europe enjoys social safety nets, that were put to work after COVID-19, after the Russian invasion of Ukraine, to protect the most vulnerable people of society. 

Now, this being said, can Europe strive to do even better? Of course, it can. Because what we face in Europe and actually across the world is very anaemic growth, slow growth. How can we boost growth prospects? Well, by tapping into all the resources we have. And that takes us to a particular aspect of inequality, which is gender inequality. Bring women into the labour force, into the power of our societies and economies more, and we would tremendously benefit.

Sasha Vakulina, Euronews: Let’s let’s look at it in detail. With traditional growth engines sputtering, many economies, as you said, are missing out, by not tapping into women’s potential. Now, how much are we missing out on?

Kristalina Georgieva, IMF Managing Director: Well, we are missing a lot. Unfortunately, based on the most recent World Bank analysis, there is not a single country on our beautiful planet where women are fully equal to men. So we have a work to do. And I can say from the analysis we do at the IMF, that the evidence is so overwhelming that everybody benefits. 

In these days of slow growth, we can get up to a 23 per cent increase in GDP if we take in the emerging markets and developing economies. Looking at the global average, it is a 20 per cent increase. Why wouldn’t we want to do it, all of us?

Mind the gap

Sasha Vakulina, Euronews: Well, as you said, why not tap into that potential? We understand the stats, they are shocking, we know the reasons, and we know the possible benefits. How else can we push to make that happen?

Kristalina Georgieva, IMF Managing Director: The way to push is to have a credible data-based policy foundation. There is a very important ‘closing the data gaps initiative’ that the G20 has promoted. Part of it is to have credible data on the distribution of income, on what we should know when we make decisions as to how to eliminate these barriers. 

We know that tax policies can help, we know that investment in early childcare can help, and we know that safe transportation can help so that women are not afraid to get on a bus or the metro. And we also know that how women are treated by the financial system can help, when women have access to finance on equal footing and they still don’t.

A small story from Brussels

Sasha Vakulina, Euronews: Ms Georgieva, despite significant progress in recent decades on the current pace of reforms, global gender gaps are estimated to close over the next three centuries. I’ll repeat that: three centuries! And one of the most important measures to improve the situation is increasing women’s representation in decision-making positions. This is something that you’ve got a lot to share about. How thorny was your path and what’s your take on that?

Kristalina Georgieva, IMF Managing Director: Well, I, started, my professional career as a young professor in Bulgaria. And, from the early days, one thing was clear to me: to be treated as equal, I have to work harder than my male colleagues. And I regret to say that has remained my experience almost throughout my whole professional life. So what I can tell women, young women in particular, is, despite that, there may be obstacles, but:

1.  You can do it. You’re strong, you’re smart. You’re beautiful. You can step forward for yourself but also contribute to society by doing so. 

2.  When you do it – and that is a very important lesson I learned personally, and I saw it time and again in my professional life – believe in yourself. Do not hesitate to present your credentials with confidence. 

When I was vice president for Human Resources we had a very important target to increase the proportion of women in senior positions to 40 per cent. And I can say the Commission did a great job but one thing that I noticed was we had two finalists, a man and a woman. They were interviewed and assessed against five criteria and had some strengths and weaknesses. They covered three of the five and less of the other two. 

How did the man approach the interview? He said: “Look, I covered the most important three criteria in full, and I’m bringing my fantastic personality to the job. Of course, I’m the best person for the job”.

 How did the woman interview? She said: “Well, I only covered three of the criteria, I don’t know, maybe there is somebody better than me”.

 Don’t do that. If you don’t believe in yourself, why should others believe in you? And I would also say to women: work with other women. There is strength in a critical mass. I see it everywhere. 

I see it at the Fund (IMF), I saw it at the World Bank, at the European Commission, when we have more women around the table, you can feel the energy in the room, and we make better decisions because we can provide different perspectives in those conversations.

So, step forward for yourself, for girls and women, for boys and men. Do your part for society!

For Sasha’s full report click on the video in the media player above

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France’s undocumented migrants face uncertain future under new immigration law

Despite facing serious labour shortages, the French government passed a more restrictive immigration bill this week after watering down measures that would have streamlined the legalisation of foreign workers. But some of the law’s new provisions may still offer a glimmer of hope for the country’s hundreds of thousands of undocumented migrants. 

Until it became unstuck, the sticking point – as far as France’s right wing was concerned – for the Macron government’s sweeping immigration bill was how to deal with the country’s undocumented migrants.

In presenting the bill’s initial text a year ago, Interior Minister Gérald Darmanin and Labour Minister Olivier Dussopt included provisions making it easier to legalise undocumented migrants working in sectors with labour shortages. But representatives from Marine Le Pen‘s far-right National Rally party repeatedly stated they would not endorse legislation granting undocumented workers legal status. 

After the language of the bill was significantly weakened in a joint committee, Le Pen saw an opening for a strategic victory and changed course; it passed the National Assembly (lower house) on Tuesday with Le Pen’s endorsement.

While it does not go as far as the original text, the new law gives undocumented workers in high-demand occupations a path to obtaining residency permits. Speaking a day after the law was passed, Darmanin said he expects the number of legalisations (régularisations) to double, with “ten thousand additional foreign workers each year“.

At the same time, the law will make it more difficult – and more risky – for undocumented workers in France: a law abolished by former president François Hollande that allowed police to fine foreigners up to €3,750 if they are found to be in the country unlawfully has been reintroduced. The bill also steps up sanctions against companies employing illegal workers.

Sans papiers

The number of undocumented workers, or what the French call the “sans papiers” (without papers), is impossible to calculate. Darmanin himself estimates the number to be between 600,000 and 900,000.

Amadou* moved to France from Mali on a work visa in 2001 (overstaying a legal visa is the most common path to becoming an undocumented migrant in Europe).

Finding work has never been a problem. He has primarily worked in the hospitality sector and in retirement homes – he currently works at a restaurant in Paris’s 7th arrondissement (district). “I’ve been working in France for 19 years without a holiday, without any sick days or absences,” he says.

Amadou first applied for working papers – to no avail – in 2012. The second time he applied, in 2018, he was denied because he didn’t have children or a partner to support. Since then, despite help from his employer, he has been unable to get another meeting.

Amadou belongs to an association that supports undocumented migrants in Montreuil, a suburb just east of Paris. He often participates in protests but realises he and people like him are largely powerless. “I’d like to get my papers but, considering it’s [the politicians] who decide, we are not their priority,” he says.

France’s right-wing Les Republicains party and the far-right National Rally are reluctant to endorse a path towards legalisation because they believe migrants choose France for its advantageous social system. Therefore, the logic goes, making life difficult for migrants will prevent more migrants from coming – an idea that has no grounding in research.

Read moreMacron accused of doing far-right’s bidding with stricter immigration law

By contrast, studies have found that legalising migrants has positive macroeconomic and fiscal outcomes in developed countries.

Citing research from the Institute of Labour Economics, French economist Pierre Cahuc argued for the significant advantages that legalisation can have on a country’s economy in the French financial daily Les Echos.

“It is a crucial factor to take into account in the context of low growth and an ageing population,” Cahuc said. “From a purely fiscal standpoint, legalisation could also have a positive impact since declared work generates income for the state coffers.”

Violaine Carrère, a lawyer at Gisti, an immigrant information and support group, agrees. “When you are on a payroll, you pay into social security. And with a real salary, you can spend more.” 

Not only does it benefit the economy, Carrère says, becoming legal enables migrants “to integrate fully and lead a dignified life”.

“Staying stuck, working all the time – it’s not a life that many people would want to live,” says Amadou.

“Everyone wants to be happy, have a good life, a roof and a family. If you’re a sans papier it’s all out of reach.”

Labour shortages

Under French President Emmanuel Macron, unemployment has fallen to 7.4% of the workforce, the lowest level in more than a decade. He has pledged to continue this mission, pushing for full employment (which the country’s labour organisation considers to be 5%).

At the same time, eight out of 10 professions in France saw labour shortages in 2022, according to the Directorate for Research, Studies and Statistics (Direction de l’Animation de la recherche, des Études et des Statistiques). This increased from seven out of 10 in 2021 due to France’s ageing population and a wave of resignations.

Targeting low domestic unemployment rates while seeking a concurrent increase in migrant labour might seem contradictory. But it is simply not possible to make up for France’s worker shortfalls with a supply of domestic labour that is mostly young – some 17% of French youth are unemployed, significantly higher than the EU average. 

Research is focusing on three central reasons for this, says migration policy analyst Anna Piccinni. The first and second are skill disparities and remuneration: much of the increasingly qualified youth are not motivated by low-skilled jobs, especially if the salary level is not what they expect.

Piccinni’s third reason is that labour shortages are often localised and migrants offer a more mobile labour force – filling the gaps that non-migrant workers might be unable or unwilling to fill. “Often, shortages of low-skilled labour are not in urban areas, where the youth move for their studies and then stick around for jobs,” she says. “Migrants have the potential to fill these gaps.”

Indeed, she points out that many municipalities across Europe are now creating incentives to retain migrant populations – such as Altena, a small town in Germany known for its successful integration scheme.

This point has not been lost on France’s business community. Speaking to Radio Classique in the lead-up to Tuesday’s vote, Patrick Martin, who heads the French entrepreneurs’ union, said relying on a foreign labour force is necessary for the country.

“We are already experiencing enormous recruitment pressure,” Martin said. “We have to call a spade a spade and make a choice” to allow a larger immigrant workforce.

For Piccinni, this cannot be achieved without fewer bureaucratic hurdles for issuing work permits to migrants who have already demonstrated a commitment to participating in the economy. “This has to be part of the solution,” she says.

Even the most anti-immigration governments in Europe are doing this, she points out. Georgia Meloni’s government in Italy signed a decree in March allowing 82,000 non-EU migrant workers to work in the country because of seasonal labour shortages.

“Beyond the perception of migration as a threat to social cohesion and security, some governments are aware and willing to recognise the role it has in [fulfilling] employers’ needs,” Piccinni says.

* Not his real name

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Uzbekistan needs a new economic approach that includes LGBTQ+ people

By M V Lee Badgett, Professor of economics, UMASS Amherst

Countries that have decriminalised homosexuality have 4.5 times higher rates of foreign direct investment (FDI) than countries that criminalise consensual same-sex relationships, M V Lee Badgett writes.

Spring in Samarkand returns flowering trees and vivid colour to the ancient Silk Road trading post, along with some less traditional arrivals this year – officials from the European Bank for Reconstruction and Development (EBRD). 

The theme of EBRD’s annual meeting in Samarkand is investing in resilience to promote economic stability and growth.

Modern bankers have new tools to use to encourage economic growth in Uzbekistan and other countries in Central Asia. 

One of the least known but potentially powerful tools is promoting the economic inclusion of lesbian, gay, bisexual, transgender, and intersex people (LGBTI) — a strategy increasingly embraced by global financial institutions, development banks, and multinational corporations.

Barriers remain high

LGBTI people face challenges to their full participation in economies everywhere, but the barriers are particularly high in Uzbekistan and Turkmenistan, the last two countries in Central Asia that criminalise homosexuality. 

Others in the region dropped those legal penalties for LGBTI people after becoming independent from the Soviet Union.

In January, Singapore became the latest country to decriminalise, with the prime minister noting that gay people “contribute fully to Singapore” and acknowledging that their hopes of being respected and accepted are reasonable. 

This landmark legal change came after a 15-year compromise in which Singaporean legislators left the criminal law in place but agreed not to enforce it.

Unlike Singapore, though, Uzbekistan has been particularly aggressive in arresting, torturing, and incarcerating gay men. 

Police arrest and beat gay men because of the “sin” they are committing or for financial gain, demanding payments to hold back on releasing information to the men’s families or to the public. 

Gay men, their friends, and sometimes their families must pay bribes to be released from police custody. Social media vigilantes also target LGBTI people and allies for harassment and violence.

Violence and stigma endanger LGBTI people’s health

These examples of poor treatment help us see the connection between antigay laws and practices to the needs of Uzbekistan’s economy. 

The most immediate effect is on health, a vital aspect of what economists call human capital—the energy, skills, knowledge, and creativity that people can deploy in the economy. 

Beatings and other forms of violence can generate physical injuries as well as psychological damage, diminishing the human capital available to the economy.

In addition, human rights agencies report that Uzbek gay men have experienced forced anal examinations (considered by many to be a form of torture) and sometimes resort to suicide attempts.

HIV clinics have even reported gay men to the government and police, discouraging people from getting the testing and treatment that will prolong their lives and prevent transmission of HIV.

Even those LGBTI people who haven’t yet had such experiences would logically fear such treatment if they were more open. 

Hiding one’s sexuality or gender identity might help avoid some harms of homophobia or transphobia, but global evidence shows that staying in the closet also contributes to psychological and physical health conditions. 

Overall, the research shows that violence, stigma, and discrimination make LGBTI people sick.

Exclusion also drains the economy

These are also conditions that make it hard to conduct surveys on what happens to LGBTI people in other parts of the economy. 

As a result, we have little research on how young LGBTI people survive their schooling in Uzbekistan or on how much discrimination LGBTI people face in the workplace or other marketplaces. 

However, it is reasonable to think that LGBTI people are also vulnerable to maltreatment in those settings in Uzbekistan. 

Bullying, harassment, and discrimination also reduce the educational achievements and work productivity of LGBTI people, holding back Uzbekistan’s businesses and overall economy even more.

These forms of exclusion in education, health, and the workplace add up to a big drain on a country’s economy. 

Countries that have exclusionary LGBTI-related laws and public opinion have lower GDP per capita. Studies from other countries put the cost of anti-LGBTI treatment at 1% or more of a country’s GDP.

Meanwhile, there is a strong correlation between inclusion and growth

A recent study focusing on Uzbekistan points out that countries that have decriminalised homosexuality have 4.5 times higher rates of foreign direct investment (FDI) than countries that criminalise consensual same-sex relationships. 

That might be one reason why Uzbekistan has the lowest rate of FDI as a percentage of GDP in the Central Asia region. 

There is a strong correlation between LGBTI inclusion and both the World Economic Forum’s Global Competitiveness Index and the World Bank’s Human Capital Index. 

Attracting foreign investment is one of Uzbekistan’s economic priorities, along with expanding the market for its goods and services in other countries as well as local tourism.

One way the EBRD can help Uzbekistan achieve those goals is to help bring Uzbekistan’s law and practice into alignment with human rights and with smart economic policy. 

Inclusion of LGBTI people — starting with eliminating the harmful abuse of gay men — and of other vulnerable groups is an important strategy for a resilient, thriving economy.

M V Lee Badgett, PhD is a professor of economics at the University of Massachusetts Amherst, and the author of The Economic Case for LGBT Equality: Why Fair and Equal Treatment Benefits Us All.

At Euronews, we believe all views matter. Contact us at [email protected] to send pitches or submissions and be part of the conversation.

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