- Given the need to fund treatment and vaccines, there is pressure to scale back funding for social provisions, but leaders must boldly finance a more equal world.
- Gender inequality is not only wrong, it is dangerous and weakens us all by depressing economic potential and threatening progress against pandemics.
- World leaders can finance an equal economic recovery from COVID-19 by issuing Special Drawing Rights, cancelling debt and increasing domestic revenues.
Leaders at this year’s World Bank/IMF Spring Meetings will determine how best to recover from one of the biggest crises the institutions have faced since their founding in 1944 – COVID-19’s impact and its economic aftermath. Given the need to fund treatment and vaccines, there is pressure to scale back funding for social provisions. But doing so would prove a catastrophic – and costly – mistake. Instead, leaders must boldly finance a more equal world.
The issue isn’t just that COVID-19’s impact is unequal; it’s that inequalities, especially gender inequality, will hamper an effective recovery. Inequalities undermine the world’s readiness for future pandemics and shocks, and block achievement of the United Nations’ Sustainable Development Goals. It is one thing to call for these inequalities to be addressed; it is another to allocate funding to rectify them. We must invest in greater rights for them to be actualised.
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COVID-19 has dramatically widened the gaps between men and women in terms of wealth, income, access to services, the burden of unpaid care, status and power. Pre-pandemic, 132 million girls were out of school – and 20 million more secondary school-aged girls could be out of school post-pandemic. Many will not go back, putting them at greater risk of violence, HIV, teenage pregnancy, child marriage, poor health and poverty. Because of COVID-19, 2.5 million more girls are at risk of child marriage in the next five years, and rates of violence against women and girls have increased precipitously. During the pandemic, women have borne the brunt of job losses and comprise the majority of frontline health workers, many of whom are under-protected and under-paid.
Gender inequality is not only wrong, it is dangerous and weakens us all. It drives the spread of COVID-19 while threatening progress against AIDS and other pandemics. It depresses economic potential too: economies and nations only flourish when women can. Recovery strategies to pandemics cannot be gender blind or gender neutral; they must overturn the inequalities that hold women back.
Prior to COVID-19, many economies and societies were weakened by insufficient investments in health, education and social protection. The COVID-19 crisis revealed the pre-existing lack of resilience in many parts of our economies and societies. Finding the financing to fight inequality in the recovery from COVID-19 is essential.
So how can world leaders finance an equal economic recovery from COVID-19?
New sources of funding
Issuing Special Drawing Rights (SDRs) would help. A range of G20, emerging and developing nations support them. An agreement to secure $500 billion in SDRs, under discussion, could allow up to $25 billion to flow to the central banks of African nations. Preferable would be securing up to $650 billion, the cap that requires US Congressional approval. Should wealthy nations share even half of their proportional issuance with developing nations, SDRs could powerfully undergird vital investments.
Cancelling debt is critical. A large share of low- and middle-income countries’ budgets goes towards paying off debt. This is especially the case in Sub-Saharan Africa where government debt increased to an estimated 70% of GDP in 2020. Building back better after COVID-19 requires ensuring that no debt service payments be made, or forced, until investments necessary for achieving the UN SDG on health are secured.
Countries need to increase domestic revenues. The economic impacts of COVID-19 make this challenging in the short term. But policy changes can lay the path to domestic resource mobilisation in the days to come. Three areas requiring policy change that could increase domestic resources are: 1) protecting against international tax evasion (through the G20/OECD-led processes) by setting a global minimum corporate tax rate affecting all geographies/all companies, including digital ones; 2) establishing emergency tax measures such as taxes on wealth or excess profits in times of crisis; and 3) designing progressive tax systems at the local and regional levels for both capital and income.
These new sources of funding can help eliminate user fees and boost investments in health and education.
User fees are a grave injustice – they tax the sick, and increase mortality and morbidity while exacerbating poverty and inequities. No new mother should be chained to her hospital bed for not having the money to pay for her child’s birth. Charging for healthcare not only hurts those affected; the spill-over costs of ill health drain economic potential. Health crises won’t be stopped if some people can’t afford testing or treatment. Publicly provided healthcare is the most efficient and effective form of provision – it’s not an unaffordable burden but a smart investment.
Ensuring girls’ education and empowerment is vital to recovery. The gains from girls’ schooling are multiple, proven, and profound – from helping to prevent child marriages and teenage pregnancies, to reducing violence and HIV infections, to increasing future earnings and strengthening economic growth.
What's the World Economic Forum doing about the gender gap?
The World Economic Forum has been measuring gender gaps since 2006 in the annual Global Gender Gap Report.
The Global Gender Gap Report tracks progress towards closing gender gaps on a national level. To turn these insights into concrete action and national progress, we have developed the Closing the Gender Gap Accelerators model for public private collaboration.
These accelerators have been convened in Argentina, Chile, Colombia, Costa Rica, Dominican Republic, Panama and Peru in partnership with the InterAmerican Development Bank.
In 2019 Egypt became the first country in the Middle East and Africa to launch a Closing the Gender Gap Accelerator. While more women than men are now enrolled in university, women represent only a little over a third of professional and technical workers in Egypt. Women who are in the workforce are also less likely to be paid the same as their male colleagues for equivalent work or to reach senior management roles.
In these countries CEOs and ministers are working together in a three-year time frame on policies that help to further close the economic gender gaps in their countries. This includes extended parental leave, subsidized childcare and removing unconscious bias in recruitment, retention and promotion practices.
If you are a business in one of the Closing the Gender Gap Accelerator countries you can join the local membership base.
If you are a business or government in a country where we currently do not have a Closing the Gender Gap Accelerator you can reach out to us to explore opportunities for setting one up.
Crises are a reckoning: they show us what is broken – and what still needs to be fixed. Achieving a more equal world is not only a moral imperative, it will make the world more resilient to pandemics like COVID-19 and makes us all healthier, safer and more prosperous. We can’t afford not to do it.