Blog
Women Are the First Victims of the Asian Crisis

by Noeleen Heyzer and Martin Khor

The debate on the Asian crisis continues. There are two sets of reasons given to explain why the ‘Asian Miracles’ have so quickly become crisis economies, with rising poverty including hardship for women.

One view emphasises domestic causes; weak financial institutions and regulatory mechanisms; investment in very risky projects (especially real estate); weak corporate governance; and a credit boom, which led to very large foreign debts. Another viewpoint argues that the Asian Miracles were not fatally flawed. The crisis arose out of an uncontrolled global financial system, and currency speculation. These factors led to large destabilizing flows of capital in the Asian region. The quality of IMF policy advice in the initial stages of the crisis has also been questioned.

Whatever its causes, the Asian crisis has demonstrated the dangers of volatile capital flows to the economic and social stability of developing countries. Small and medium-sized enterprises (SMEs) have gone bankrupt due to high interest rates, currency devaluation and the credit squeeze. The social consequences include mass unemployment, return migration to the rural areas, food riots, cutbacks in education and health services, shortages of basic goods, and rising crime. The mutual support systems of communities have reached breaking point, and the old fault lines of ethnicity, class and gender have opened. Ethnic riots and the rape of Chinese women accompanied the turmoil in Indonesia earlier this year.

When societies experience such pressure, women face especially intense demands to devise ways of coping for their families and communities. Yet women are the first to be hit by economic crisis. The labour of women is seen as ‘flexible’ to the needs of a competitive global market (in the electronics and textile export sectors for example) and they are often the first to be fired in a downturn. Women are the majority of owners and workers in SMEs, and are therefore hit by the contraction of the SME sector. Women have the main responsibilities for children and the care of the sick and elderly, and therefore they feel the immediate effects of cuts in basic services; this raises their workload and can adversely affect their nutritional and health status, for example.

Recovery strategies have generally ignored women’s livelihoods. Efforts to cushion the impact of crisis by creating jobs and supporting community initiatives have concentrated mainly on public works, ignoring the sectors where most women work. Women are therefore doubly victimized: they are hardest hit in a crisis not of their making and are by-passed by the economic recovery process.

The Chinese character for crisis consists of two components: an element of danger and an element of opportunity. We have experienced the dangers. How do we seize the opportunity to move forward? We cannot wish away globalization. The challenge is therefore to understand and reshape the globalization process - trade, investment, finance and technology - to make it more peoplecentred and sustainable. What kind of globalization will support stable lives in healthy communities and a world free from gender-based poverty and violence? It clearly cannot be a ‘champagne glass’ globalization where 20 per cent of humanity controls 85 per cent of the world’s income and the bottom 20 per cent survives on only 1.45 per cent. The widening gap between the new super rich and the global poor, with a diminishing middle class, must be addressed. We need to rethink how markets and states best interact to improve human life chances and how people can build their skills and power to hold both the global market and their states accountable.

The current kind of globalization must be transformed into one that allows small producers control over their economic and social environment as they become economic players in global markets. In this regard, UNIFEM’s support for the transnational network of home-based workers is innovative in building capacity and power among women producers.

We need to use a rights-based approach to development as a counter-force to powerful interests and as the ethics to guide a globalizing world. The leaders of civil society, government, international agencies and the private sector must understand how to shape the globalization process in a constructive way to move us forward. There is no luxury of choice. Too much damage has already been done.

Noeleen Heyzer is the Executive Director of the United Nations Development Fund for Women (UNIFEM) and Martin Khor is with the Third World Network.