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Documenti United Nations World Economic Situation and Prospects 2009 (*) Executive Summary The global outlook The world economy is entering into a recession The world economy is mired in the worst financial crisis since the Great Depression. What first appeared as a sub-prime mortgage crack in the United States housing market during the summer of 2007 began widening during 2008 into deeper fissures across the global financial landscape and ended with the collapse of major banking institutions, precipitous falls on stock markets across the world and a credit freeze. These financial shockwaves have now triggered a full-fledged economic crisis, with most advanced countries already in recession and the outlook for emerging and other developing economies deteriorating rapidly, including those with a recent history of strong economic performance. In the baseline scenario of the United Nations forecast, world gross product is expected to slow to a meagre 1.0 per cent in 2009, a sharp deceleration from the 2.5 per cent growth estimated for 2008 and well below the more robust growth of previous years. At the projected rate of global growth, world income per capita will fall in 2009. Output in developed countries is expected to decline by 0.5 per cent in 2009. Growth in the economies in transition is expected to slow to 4.8 per cent in 2009, down 6.9 per cent in 2008, while output growth in the developing countries would slow from 5.9 per cent in 2008 to 4.6 per cent in 2009. The world economy could fall into recession in 2009 Source: UN/DESA. a Partly estimated. b Projections, based on Project LINK. 175 Dipco n. 10/2009 (*) Si pubblica l’Executive Summary del World Economic Situation and Prospects 2009 delle Nazioni Unite (http://www.unctad.org).

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Page 1: dipco 2009 10 - COSV | Coordinamento delle Organizzazioni per il … · 2019. 2. 12. · Dipco n. 10/2009 176 Synchronized global slowdown, led by a recession in developed countries

Documenti

United Nations

World Economic Situation and Prospects 2009 (*)

Executive Summary

The global outlook

The world economy is entering into a recession

The world economy is mired in the worst financial crisis since the Great Depression. Whatfirst appeared as a sub-prime mortgage crack in the United States housing market during thesummer of 2007 began widening during 2008 into deeper fissures across the global financiallandscape and ended with the collapse of major banking institutions, precipitous falls on stockmarkets across the world and a credit freeze. These financial shockwaves have now triggered afull-fledged economic crisis, with most advanced countries already in recession and the outlookfor emerging and other developing economies deteriorating rapidly, including those with arecent history of strong economic performance.

In the baseline scenario of the United Nations forecast, world gross product is expected toslow to a meagre 1.0 per cent in 2009, a sharp deceleration from the 2.5 per cent growthestimated for 2008 and well below the more robust growth of previous years. At the projectedrate of global growth, world income per capita will fall in 2009. Output in developed countriesis expected to decline by 0.5 per cent in 2009. Growth in the economies in transition isexpected to slow to 4.8 per cent in 2009, down 6.9 per cent in 2008, while output growth in thedeveloping countries would slow from 5.9 per cent in 2008 to 4.6 per cent in 2009.

The world economy could fall into recession in 2009

Source: UN/DESA.a Partly estimated.b Projections, based on Project LINK.

175 Dipco n. 10/2009

(*) Si pubblica l’Executive Summary del World Economic Situation and Prospects 2009 delle Nazioni Unite(http://www.unctad.org).

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Synchronized global slowdown, led by a recession in developed countries

Source: UN/DESA.a Partly estimated.b Forecast.

Given the great uncertainty prevailing today, however, a more pessimistic scenario isentirely possible. If the global credit squeeze is prolonged and confidence in the financial sectoris not restored quickly, the developed countries would enter into a deep recession in 2009, withtheir combined gross domestic product (GDP) falling by 1.5 per cent; economic growth indeveloping countries would slow to 2.7 per cent, dangerously low in terms of their ability tosustain poverty reduction efforts and maintain social and political stability. In this pessimisticscenario, the size of the global economy would actually decline in 2009 – an occurrence notwitnessed since the 1930s.

To stave off the risk of a deep and global recession, World Economic Situation andProspects (WESP) 2009 recommends the implementation of massive, internationally coordinatedfiscal stimulus packages that are coherent and mutually reinforcing and aligned with sustainabledevelopment goals. These should be effected in addition to the liquidity and recapitalizationmeasures already undertaken by countries in response to the economic crisis. Under a moreoptimistic scenario – factoring in an effective fiscal stimulus of between 1.5 and 2 per cent ofGDP by the major economies, as well as further interest-rate cuts – WESP forecasts that, in 2009,the developed economies could post a 0.2 per cent rate of growth, and growth in thedeveloping world would be slightly over 5 per cent.

Origins of the global financial crisis

The story of a crisis foretold

The intensification of the global financial turmoil in September-October 2008 revealed thesystemic nature of the crisis and heightened fears of a complete global financial meltdown.Although the problems originated in the major developed countries, the mounting financialfragility was closely tied to an unsustainable global growth pattern that had been emerging asfar back as the early 2000s, a risk forewarned early on in previous issues of WESP. As part ofthis pattern, growth was driven to an important extent by strong consumer demand in theUnited States of America, stimulated by easy credit and underpinned by booming house pricesas well as very high rates of investment demand and strong export growth in some developingcountries, notably China. Growing United States deficits in this period were financed byincreasing trade surpluses in China, Japan and other countries that had accumulated largeforeign-exchange reserves and were willing to buy dollar-denominated assets.

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At the same time, increasing financial deregulation, along with a flurry of new financialinstruments and risk-management techniques (mortgage-backed securities, collateralized debtobligations, credit default swaps, and so forth), encouraged a massive accumulation of financialassets supported by growing levels of debt in the household, corporate and public sectors. Insome countries, both developed and developing, domestic financial debt has risen four- orfivefold as a share of national income since the early 1980s. This rapid explosion in debt wasmade possible by the shift from a traditional “buy-and-hold” banking model to a “dynamic-originate-to-sell” trading model (or “securitization”). The leverage ratios of some institutionswent up to as high as 30, well above the ceiling of 10 generally imposed on deposit banks. Thedeleveraging of this financial house of cards now under way has brought down establishedfinancial institutions and has led to the rapid evaporation of global liquidity, togetherthreatening the normal operations of the real economy.

Until recently, all parties seemed to benefit from the boom, particularly the major financialplayers in the rich economies, while the risks were conveniently ignored, despite repeatedwarnings, such as those highlighted in WESP, that mounting household, public sector andfinancial sector indebtedness in the United States and elsewhere would not be sustainable overtime. As strains in the United States mortgage market were transmitted to the wider financialsector, fears of a meltdown escalated and have now spread around the world.

Policymakers worldwide have taken unprecedented measures to deal with the crisis …

Policymakers initially responded in piecemeal fashion, failing to see the systemic risk or toconsider the global ramifications of the turmoil in their entirety. The approach included massiveliquidity injections into the financial system and the bailout of some major financial institutions,while accepting the failure of others. As the crisis intensified in September 2008, policymakersshifted to a more comprehensive and internationally improved coordinated form of crisismanagement. The measures taken have reshaped the previously deregulated financiallandscape. Massive public funding has been made available to recapitalize banks, taking partialor full ownership of failed financial institutions and providing blanket government guaranteeson bank deposits and other financial assets. Governments in both developed and developingcountries have started to put together fiscal and monetary stimulus packages in attempts toprevent the global financial crisis from turning into a worldwide human disaster.

… but it will take a long time for the policies to take effect on the real economy

These policy measures are aimed at restoring confidence and unfreezing credit and moneymarkets by recapitalizing banks with public funds, guaranteeing bank lending and insuringbank deposits. During the fourth quarter of 2008, interbank lending rates retreated somewhatfollowing the start of the large-scale bailout. However, by December 2008, congestion anddysfunction remained in important segments of the credit markets. In any event, it will taketime for most of these policy measures to take effect; the restoring of confidence amongfinancial market agents and normalization of credit supplies will take months, if not years, ifpast crises can be taken as a guide. Furthermore, it typically takes some time before problemsin financial markets are felt in the real economy. Consequently, it seems inevitable that themajor economies will see significant economic contraction in the immediate outlook and thatrecovery may not materialize any time soon, even if the bailout and stimulus packages were tosucceed. Moreover, the immediate fiscal costs of the emergency measures will be huge, and it isuncertain how much of these can eventually be recovered from market agents or througheconomic recovery. This poses an additional macroeconomic challenge.

Implications for world trade and finance

Commodity prices have become increasingly volatile …

The crisis has already had a severe impact on global commodity markets with far-reachingimplications for the prospects of the developing world at large. Commodity prices have beenhighly volatile during 2008. Most prices surged in the first half of 2008, continuing a trend that had

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begun in 2003. Trends in world market prices reversed sharply from mid-2008, however. Oil priceshave plummeted by more than 60 per cent from their peak levels of July to November. The pricesof other commodities, including basic grains, also declined significantly. In the outlook, most ofthese prices are expected to even out further along with the moderation in global demand.

… and prospects for world trade are bleak

Growth of world trade decelerated to 4.3 per cent in early 2008, down from 6.4 per cent in2007, owing mainly to a decline in imports by the United States. United States imports, whichaccount for about 15 per cent of the world total, have registered a decline in every quarter sincethe fourth quarter of 2007 and dropped as steeply as 7 per cent in the second quarter of 2008.Growth in the volume of world trade had dropped to about 3 per cent by September 2008, toabout one third of the rate of growth a year earlier. In the outlook, global trade is expected toweaken further in 2009.

The risk of a pullback of lending to developing countries has heightened

Owing to their limited exposure to the mortgage market derivatives that brought downmajor banks in the United States and Europe, financial systems in most developing countriesinitially seemed shielded from any direct impact from the international financial crisis. Growingrisks have emerged through other channels, however, as investors have started to pull backresources from emerging market economies and other developing countries as part of thedeleveraging process of financial institutions in the developed countries. External financingcosts for emerging market economies surged along with the tightening of the global creditmarket, as measured by the spreads of the Emerging Markets Bond Index. Unlike in recentyears when the spread varied significantly across regions and countries to indicate investordiscrimination among country-specific risks, the latest surge has been uniform, suggesting thatcontagion and aversion to investing in emerging markets has taken hold among investors.Spreads are expected to remain high in 2009, as the strains in global credit markets linger andalso as capital flows to emerging market economies are projected to drop further.

The rise and fall of commodity prices in 2007 and 2008

Source: UNCTAD Commodity Price Statistics database.a Average of Brent/Dubai/Texas, equally weighted (dollars per barrel).

Exchange-rate volatility has increased and the risk of a hard landing of the dollar in 2009remains

Volatility in foreign-exchange markets has also increased substantially with the deepeningof the global financial crisis. The United States dollar depreciated substantially vis-à-vis other

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major currencies, particularly the euro, in the first half of 2008, but has since reversed directioneven more sharply. For many currencies in developing countries, the earlier trend ofappreciation vis-à-vis the dollar has either reversed or slowed. Currencies in a number ofdeveloping countries, particularly those that are commodity exporters, have depreciated againstthe dollar substantially since mid-2008. The heightened risk aversion among internationalinvestors has led to a “flight to safety”, as indicated by the lowering of the yield of the short-term United States Treasury bill to almost zero.

However, it is expected that the recent strength of the dollar will be temporary and the riskof a hard landing of the dollar in 2009 or beyond remains. Even though the global imbalanceshave narrowed somewhat in 2008 and are expected to narrow further in 2009 with therecession in developed countries, the United States external deficit remains significant and itsnet international liability position continues to increase. The large current-account deficit andperceptions that the United States debt position is approaching unsustainable levels areimportant factors underlying the trend depreciation of the United States dollar since 2002. Theflight to safety into the United States dollar in the wake of the global financial crisis is pushingthe external indebtedness of the United States to new heights; this is likely to precipitate arenewed slide of the dollar once the process of deleveraging has ended. Policymakers shouldrecognize the risk of a possible hard landing of the dollar as a potential source of renewedturmoil in financial markets in 2009.

The global imbalances have narrowed, but still pose a risk for further financial trouble

Sources: IMF, World Economic Outlook database, October 2008; UN/DESA.a Partly estimated.b Forecast.

Impact on developing countries

Developed economies are leading the global downturn, but the weakness has rapidlyspread to developing countries and the economies in transition, causing a synchronized globaldownturn in the outlook for 2009.

Among the economies in transition, growth of the Commonwealth of Independent States(CIS) region is on course for a marked slowdown in 2009, dragged largely by the impact of aglobal recession and falling commodity prices on the largest economies, such as Kazakhstan,the Russian Federation and Ukraine. A slowdown in business investment, and, to a lesserdegree, in household consumption will be felt throughout the region. In South-eastern Europe,a further moderation of economic growth is expected.

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Among developing countries, growth in Africa is expected to decelerate in 2009, as thecontagion effects of the global economic slowdown spread throughout the region, leading toweakened export demand, lower commodity prices and a decline in investment flows to theregion. Growth in East Asia is expected to decline notably in 2009, as exports see significantdeceleration. Some economies in the region will also experience sizeable financial losses as aresult of their relatively high exposure to global financial markets. South Asia is experiencing anoverall slowdown in economic growth from the industrial sector to the service sector. Growth inWestern Asia is anticipated to slow down significantly in 2009 as export earnings from oil fallsharply, and investment spending across the region is expected to decline. Growth in LatinAmerica and the Caribbean is also expected to slow markedly, dragged largely by the fall incommodity prices and global credit constraints.

Significant downturn in all developing regions in 2009

Annual percentage change

2009b

Baseline Pessimistic Optimistic2003 2004 2005 2006 2007 2008a scenario scenario scenario

Economies in transition 7.4 7.7 6.5 7.8 8.3 6.9 4.8 2.7 6.1

Developing economies 5.2 7.1 6.8 7.1 7.2 5.9 4.6 2.7 5.1Africa 4.9 5.9 5.7 5.7 6.0 5.1 4.1 0.1 4.7East Asia 6.9 8.0 7.7 8.6 9.0 6.9 5.9 4.6 6.4South Asia 6.9 6.7 9.5 6.9 7.9 7.0 6.4 4.0 6.6Western Asia 4.9 8.2 6.8 5.9 4.7 4.9 2.7 1.6 3.3Latin America and the

Caribbean 1.8 5.9 4.6 5.5 5.5 4.3 2.3 -0.2 2.7

Source: UN/DESA.a Partly estimated.b Forecasts, based on Project LINK.

The crisis will present a setback for the fight against poverty

Coming on the heels of the food and energy security crises, the global financial crisis willmost likely substantially set back progress towards poverty reduction and the MillenniumDevelopment Goals. The tightening of access to credit and weaker growth will cut into publicrevenues and limit the ability of developing country Governments to make the necessaryinvestments to meet education, health and other human development goals. Unless adequatesocial safety nets are in place, the poor will no doubt be hit the hardest. An estimated 125million people in developing countries were already driven into extreme poverty because of thesurge in global food prices since 2006. Lessons from earlier major financial crises point to theimportance of safeguarding (public) investment in infrastructure and social development so asto avoid major setbacks in human development and allow a recovery towards high-qualityeconomic growth in the medium term.

Immediate policy challenges

Policymakers initially underestimated the crisis

Policymakers worldwide initially underestimated the depth and breadth of the currentfinancial crisis. As a result, policy actions by and large fell behind the curve and, in the earlystages, policy stances were grossly inadequate for handling the scale and nature of the crisis.

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Monetary easing moving to a liquidity trap?

Source: National central bank websites.

Only after the systemic risks for the global financial system became manifest in September2008 did six major central banks decide to move in a more coordinated fashion by agreeing tocut their respective official target rates simultaneously and scale up direct liquidity injectionsinto financial markets.

Further monetary easing is expected in the world economy in the outlook for 2009.However, with consumer and business confidence seriously depressed and banks reluctant tolend, further lowering of interest rates by central banks will do little to stimulate credit suppliesto the non-financial sector or to encourage private spending. Indeed, it may end up merelyexpanding the money base within the banking system.

Massive fiscal stimulus is needed

Restoring confidence in financial markets in order to normalize credit flows remains ofprimary importance. However, as long as fears for a deep recession prevail, consumers andinvestors will likely remain severely risk averse. Hence, counter-cyclical macroeconomic policiesare needed to complement the efforts to rescue the financial sector from widespread systemicfailure.

With limited space for monetary stimulus, fiscal policy options will need to be examined asways of reactivating the global economy. The severity of the financial crisis calls for policyactions that are commensurate with the scale of the problem and that should thus go wellbeyond any normal range of budgetary considerations. The United States adopted a fiscalstimulus package in early 2008, totalling some $168 billion, or about 1.1 per cent of annualGDP, mainly in the form of a tax rebate for households. While some analysts believe thepackage had worked well to keep the economy buoyant for at least one quarter, othersdoubted the permanency of its effects. It is now clear that the size of the fiscal package was toosmall in comparison with the seriousness of the situation and failed to sustain the economy. Atthe end of 2008, a second, more substantial, fiscal stimulus package was under discussion in theUnited States. Similarly, European countries were easing monetary policies and preparing forsignificant fiscal expansion in 2009.

Counter-cyclical fiscal policies are also needed in developing countries

A large number of developing countries and the economies in transition have beenreluctant to ease monetary policy over concerns of inflationary pressures and currencydepreciation. Inflationary pressures should taper off during 2009, however, as world food andenergy prices are now retreating and global demand is weakening. This should provide some

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space for monetary easing, as well as for fiscal stimulus, at least in those countries that stillpossess ample foreign-exchange reserves.

The scope for counter-cyclical policies will vary greatly across developing countries, mainlyfor two reasons. First, many countries have a history of pro-cyclical macroeconomic policyadjustment, partly driven by policy rules (such as inflation targeting). Providing greatermonetary and fiscal stimuli in such cases will thus require a departure from existing policypractice and policy rules. Second, not all countries have equally sufficient foreign-exchangereserves and some are likely to suffer stronger balance-of-payments shocks.

There are countries with ample policy space for acting more aggressively to stave off arecession. The Chinese Government has already started to use its policy space, for instance, andhas designed a large-scale plan of fiscal stimulus amounting to 15 per cent of its GDP to be spentduring 2009 and 2010, which should contribute to reinvigorating global demand. The Republic ofKorea has also announced a fiscal stimulus package equivalent to 1 per cent of its GDP.

For many of the middle- and low-income countries, the scope for providing such stimuliwill be even more limited, as they may see their foreign-exchange reserves evaporate quickly,with either continued capital reversals taking place or strong reductions in the demand for theirexport products, or both. In order to enhance their scope for countercyclical responses in theshort run, further enhancement of compensatory financing and additional and reliable foreignaid flows will be needed to cope with the drops in export earnings and reduced access toprivate capital flows caused by the global financial crisis.

As they fight fires today, policymakers worldwide must look to tomorrow

Looking to the long run, however, a broadening of the development policy framework isneeded to conduct active investment and technology policies so as to diversify these countries’economies and reduce their dependence on a few commodity exports, thereby allowing themto meet key development goals, including reaching greater food security, addressing climatechange and meeting the Millennium Development Goals. This will require massive resources forpublic investment in infrastructure, food production, education and health, and renewableenergy sources. The crisis also presents various opportunities to align fiscal stimulus packageswith long-term goals for sustainable development.

The fiscal stimulus needs to be coordinated internationally

To ensure sufficient stimulus at the global level, it will be desirable to coordinate fiscalstimulus packages internationally. In a strongly integrated world economy, fiscal stimulusimplemented by only one country tends to be less effective because of high import leakageeffects. By coordinating fiscal stimulus internationally, the positive multiplier effects can beamplified through international economic linkages by 30 per cent or more, thereby providinggreater stimulus to both the global economy and the economies of individual countries. As inthe case of a coordinated monetary easing, internationally coordinated fiscal stimuli can alsolimit unnecessary fluctuation in cross-country interest rate differentials and in exchange ratesamong major currencies. Compared with coordinated interest rate policies, fiscal policycoordination tends to be more difficult to attain, both technically and politically, and hence maybe difficult to achieve through ad hoc agreements, requiring instead a more institutionalizedplatform for coordination.

Without adequate coordination, global economic reactivation may be delayed, and it maytake longer before market confidence is restored. This may prolong the credit crunch and keepborrowing costs high for developing country Governments and private firms, therebyundermining their efforts to counteract the crisis.

Internationally coordinated policy action among deficit and surplus countries is also criticalfor achieving a benign adjustment of the global imbalances and avoiding a disruptive hardlanding of the dollar. Now that the financial crisis has already turned a disorderly adjustmentinto a synchronized global downturn, the need for international policy coordination andcooperation is more pressing than ever.

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Reform of the international financial system

Even in the most optimistic scenario, however, it will take time before confidence isrestored in financial markets and recovery can take place. As immediate solutions are beingworked out, it is important to address the systemic causes that led to the present crisis.

Global economic governance mechanisms are inadequate

The depression of the 1930s had been aggravated by “beggar-thy-neighbour” policies,disintegration of the global economy and resurgent protectionism. Under the promise “neveragain”, it led to the design of the Bretton Woods institutions, including the creation of theInternational Monetary Fund (IMF) and the World Bank, to safeguard the stability of the globaleconomy and promote growth and development. But over time, the ability of the IMF tosafeguard the stability of the global economy has been hampered by limited resources, and ithas been increasingly undermined by the vastly greater (and more volatile) resources of privateactors with global reach. More exclusive and ad hoc country groups, such as the Group ofSeven (G7) or the Group of Eight (G8), have become the platforms where international policycoordination has taken place in practice.

The apparent irrelevance of the Bretton Woods institutions in today’s crisis also stems fromtheir skewed voting structures and governance, which do not adequately reflect the importanceof developing countries in today’s world economy. The lack of a credible mechanism withbroad representation for international policy coordination is an urgently felt lacuna which islimiting swift and effective responses to the present crisis.

Regulatory frameworks are deficient

The financial crisis has revealed major deficiencies in the regulatory and supervisoryframeworks of financial markets. First, the new approach to the regulation of finance, includingthat under the New Basel Accord (Basel II) rules, places the burden of regulation on thefinancial institutions themselves. Second, the more complex the trade in securities and otherfinancial instruments has become, the greater the reliance on rating agencies who provedinadequate to the task at hand, in part because of conflicts of interest over their own sources ofearnings, which are proportional to the trade volume of the instruments they rate.Consequently, risk assessments by rating agencies tend to be highly pro-cyclical as they react tothe materialization of risks rather than to their build-up. Third, existing approaches to financialregulation tend to act pro-cyclically, hence exacerbating a credit crunch during a crisis. At timesof boom, when asset prices and collateral values are rising, loan delinquency falls and results ininadequate provisioning and overexpansion of credit. When the downturn comes, loandelinquency rises rapidly and standard rules on provisions can lead to a credit crunch. Fourth,the spread of financial networks across the world, and the character of securitization itself, hasmade practically all financial operations hinge on the “confidence” that each institution inisolation is capable of backing up its operations. But as insolvencies emerge, such confidence isweakened and may quickly vanish, generating a generalized credit freeze. The risk modelsapplied by regulatory agencies typically disregard such “contagion” effects and fail to accountfor the vulnerabilities of the financial system as a whole, at home and abroad.

The basic objectives of the reform of prudential regulation and supervision of financialsectors should thus be to introduce strong, internationally concerted counter-cyclical rulessupported by counter-cyclical macroeconomic policies.

The risk of a hard landing of the dollar is intrinsic to the nature of the international reservesystem

The risk of a hard landing of the United States dollar is intrinsic to the very nature of theglobal reserve system, which uses the national currency of the United States as the main reservecurrency and instrument for international payments. Under this system, the only way for the restof the world to accumulate dollar assets and reserves is for the United States to run an external

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deficit. However, as the net liability position of the United States continues to increase, investorswill start anticipating a readjustment and confidence in the dollar will erode.

The world lacks an international lender of last resort

Over the past decade, many developing countries have accumulated vast amounts offoreign-currency reserves, providing some “self-insurance” against external shocks. However,both the carry cost of holding such reserves and the opportunity costs of not using them forlong-term investment purposes are high. The tendency to accumulate a large amount of reservesin developing countries has its roots in more fundamental deficiencies of the internationalmonetary and reserve system. Improved macroprudential capital-account regulation can helpreduce the need for the cost of self-insurance via reserve accumulation. The need for self-insurance can be reduced further with more effective mechanisms for liquidity provisioning andreserve management at the international level, both regionally and multilaterally.

More generally, all IMF facilities should be significantly simplified and include moreautomatic and quicker disbursements proportionate to the scale of the external shock. Recentaction has been undertaken in this direction with the reform of the IMF Exogenous ShocksFacility. But total resources remain limited and much more is needed to provide collectivesafeguards for large-scale crises.

The way forward

Given the existing systemic flaws, it seems paramount that deliberations on a newinternational financial architectures should address at least four core areas of reform:

(a) The establishment of a credible and effective mechanism for international policycoordination. To guide a more inclusive process, the participation not only of major developingcountries but also of more representative institutions of global governance is required; hence, afundamental revision of the governance structure and functions of the IMF and the World Bankis needed.

(b) Fundamental reforms of existing systems of financial regulation and supervision toprevent the re-emergence of excesses.

(c) Reform of the present international reserve system, away from the almost exclusivereliance on the United States dollar and towards a multilaterally backed multi-currency systemwhich, perhaps, over time could evolve into a single, world currency-backed system.

(d) Reforms of liquidity provisioning and compensatory financing mechanisms backedthrough, among other things, better multilateral and regional pooling of national foreign-exchange reserves and avoiding the onerous policy conditionality attached to existingmechanisms.

The crisis is global; hence, global solutions are needed

World leaders have acknowledged these needs for reform. At the Follow-up InternationalConference on Financing for Development to Review the Implementation of the MonterreyConsensus, held in Doha, Qatar, from 29 November to 2 December 2008, Governments agreedto address systemic problems and fundamentally reform the global financial system.

At the Conference, donors also promised to honour all commitments to bridge existingdeficiencies in official development assistance to developing countries and emphasized that thefinancial crisis should not stand in the way of achieving this.

The global financial crisis could motivate countries to recur to greater trade protection. Atthe Doha conference on financing for development, Governments pledged to resist suchtemptation, but also stressed the need to break the impasse in the negotiations to complete theDoha Round of multilateral trade negotiations and safeguard its development dimensions, inparticular the principle of special and differential treatment.

It will not be easy to find consensus among all stakeholders on the precise shape of a newsystem of global economic governance, but the risk of endangering global peace and prosperityby failing to address the systemic problems underlying the present crisis are simply too high.This awareness should be the common ground for seeking common solutions.

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United Nations Office on Drugs and Crime - UNODC

Global Report on Trafficking in Persons (*)February 2009

Preface

A knowledge crisis about a crime that shames us all

The term trafficking in persons can be misleading: it places emphasis on the transactionaspects of a crime that is more accurately described as enslavement. Exploitation of people, dayafter day. For years on end.

After much neglect and indifference, the world is waking up to the reality of a modernform of slavery. The public and the media are becoming aware that humans prey upon humansfor money. Parliaments are passing appropriately severe laws. The judiciary is facing its anti-slavery responsibility, with more prosecutions and convictions. Civil society and (to a lesserextent) the private sector are mobilizing good-will and resources to assist victims.

Hearing this wake-up call, politicians as well as ordinary people ask me two sets ofquestions. First, they want to know how big the crime of human trafficking really is: how manyvictims are there? Who are the traffickers, what are their routes and their gains? What are thetrends, namely is the problem getting ever more severe? Why and where?

Second, people want to know what to do, individually and collectively. Why aren’tgovernments and the United Nations, why aren’t we all, doing more? Some people are evenwilling to mobilize personal resources to fight this crime: but for whom and how?

The first set of questions needs to be answered as a matter of priority. Only byunderstanding the depth, breadth and scope of the problem can we address the second issue,namely, how to counter it. So far we have not attained much knowledge and thereforeinitiatives have been inadequate and disjointed. Policy can be effective if it is evidence-based,and so far the evidence has been scanty.

UNODC first attempted to identify human trafficking patterns in April 2006. This secondreport goes a step further, cataloguing and analysing the world’s response, based on criminaljustice and victim assistance data from 155 countries. A few observations stand out, in lieu ofconclusions.

First, over the past few years, the number of countries that have taken steps to implementthe foremost international agreement in this area – the UN Protocol against Trafficking inPersons – has doubled. However, there are still many countries, particularly in Africa, that lackthe necessary legal instruments.

Second, the number of convictions is increasing, but not proportionately to the growingawareness (and probably, size) of the problem. Most convictions still take place in only a fewcountries. While these countries may have human trafficking problems more serious thanothers, they are doing something about them. On the other hand, as of 2007/08, two out ofevery five countries covered by this report had not recorded a single conviction. Either they areblind to the problem, or they are ill-equipped to deal with it. I urge governments and otherstakeholders to call on UNODC expertise, including the recently published Toolkit to CombatTrafficking in Persons, to show their commitment.

Third, sexual exploitation is by far the most commonly identified form of human trafficking(79%), followed by forced labour (18%). This may be the result of statistical bias. By and largethe exploitation of women tends to be visible, in city centres, or along highways. Because it is

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(*) Si pubblica l’Executive Summary del Global Report on Trafficking in Persons (http://www.unodc.org).

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more frequently reported, sexual exploitation has become the most documented type oftrafficking in aggregate statistics. In comparison, other forms of exploitation are under-reported:forced or bonded labour; domestic servitude and forced marriage; organ removal; and theexploitation of children in begging, the sex trade, and warfare.

Fourth, a disproportionate number of women are involved in human trafficking, not onlyas victims (which we knew), but also as traffickers (first documented here). Female offendershave a more prominent role in present-day slavery than in most other forms of crime. This factneeds to be addressed, especially the cases where former victims have become perpetrators.

Fifth, most trafficking is national or regional, carried out by people whose nationality is thesame as that of their victims. There are also notable cases of long-distance trafficking. Europe isthe destination for victims from the widest range of origins, while victims from Asia aretrafficked to the widest range of destinations. The Americas are prominent both as the originand destination of victims in the human trade.

This report increases our partial understanding of the forces at play in modern slavemarkets. Yet internationally standardized data are still not available, a limitation that hampersthe sharing of information between and among states, and with the UNODC. Aggregatedstatistics cannot be put together, neither at geographic nor thematic levels.

As a consequence, we still lack a global understanding of the subject, and of how itscomponents interact to make the whole. Think of illicit drugs, the most heavily documentedsubject at UNODC. Drug control policies take into account data concerning the entire value-added chain (production, consumption, trade, etc.) of all drugs (opium, cocaine, amphetamines,etc.), in all markets (Afghanistan, Colombia, US, EU, Iran, etc.). Drug information is organized inmultidimensional data bases, so that policies can target the whole, and any of its parts (fromtherapy of addicts, to seizures of drugs, to conversion of cultures).

Nothing of this sort is possible today in the domain of human trafficking. We do not haveas yet the logical categories needed to establish multidimensional data bases. We should be, butwe are not, able to segment today’s slave markets into their components (demand, supply,trafficking, and related prices). We must, but cannot, catalogue (for lack of data) the differenttypes of slavery: exploitation through child-begging in Europe is different from what goes on ina brothel, or on a street corner in Australia. Preventive measures must also be adapted to takeinto account that an Asian father sells his under-age daughter under circumstances differentfrom what forces an African teenager into a rag-tag army of killers, or what pushes an illegalimmigrant into a sweat shop in the Americas. Measures to rescue victims and punish criminalsmust vary accordingly.

I plead with social scientists in academia, and especially in governments, to work moreintensively with UNODC to generate the logical categories and the statistical information neededfor evidence-based, anti-slavery policy. The crisis we face of fragmented knowledge anddisjointed responses intensifies a crime that shames us all.

Antonio Maria CostaExecutive Director

United Nations Office on Drugs and Crime

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Executive summary

In 2007, UNODC conducted, in the framework of the United Nations Global Initiative toFight Human Trafficking (UN.GIFT), a study on the state of the world’s response to the crime ofhuman trafficking. This report offers an unprecedented view of the available information on thestate of the world’s response to human trafficking, including near-comprehensive data onnational legislative and enforcement activity. Over the course of a few months in 2007 and2008, UNODC gathered information concerning 155 countries and territories. With a fewnotable exceptions, nearly all of the larger states participated. This report summarizes thisinformation, starting with a discussion of the global and regional figures and closing withcountry profiles for participating nations.

Of course, data on the response of states to human trafficking are only indirect indicatorsof the nature of the underlying problem. Countries with well-resourced criminal justice agenciesmay show a great deal of activity even when human trafficking is relatively rare, while countrieswith larger problems but less capacity may be unable to muster a proportionate response. Butthe material gathered here does illustrate that, in a remarkably short time, tremendous progresshas been made in combating a crime that was only recently widely acknowledged. It alsodemonstrates that sharing human trafficking data on a global basis is possible and can yieldvaluable insights, despite the inherent limitations of the criminal justice figures.

The response to trafficking in persons

The Protocol to Prevent, Suppress and Punish Trafficking in Persons only came into effectin December 2003, but it has inspired widespread legislative response. As of November 2008,63% of the 155 countries and territories that provided information for this report had passedlaws against trafficking in persons addressing the major forms of trafficking 1. Another 16% hadpassed anti-trafficking laws that cover only certain elements of the Protocol definition.2 In 2003,only one third of the countries covered by this report had legislation against human trafficking;at the end of 2008, four-fifths did. The number of countries having anti-trafficking legislationmore than doubled between 2003 and 2008 in response to the passage of the Protocol. Inaddition, 54% of responding countries have established a special anti-human trafficking policeunit, and more than half have developed a national action plan to deal with this issue.

Percentage of countries covered by this report that have introduced a specific offenceon trafficking in persons into their legislation

Source: UNODC/UN.GIFT

1 These laws criminalize, at the very least, sexual exploitation and forced labour and have no restrictionregarding the age or gender of the victim.

2 For example, laws that are limited to sexual exploitation or only apply to female or child victims.

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Given that this legislative framework is very new, it is remarkable that 91 countries (57% ofthe reporting countries) reported at least one human trafficking prosecution, and 73 countriesreported at least one conviction. A core of 47 countries reported making at least 10 convictionsper year, with 15 making at least five times this number.

Criminalization of trafficking in persons – status of national legislation, by country(November 2008)

Source: UNODC/UN.GIFT

Covers most/all forms: Countries where the specific offence of trafficking in persons isin force, criminalizing at a minimum sexual exploitation and forced labour, with no restrictionsconcerning the profile of the victim.

Partial: Countries where the specific offence of trafficking in persons is in force, butlegislation does not criminalize all or most forms listed in Article 3 of the UN TraffickingProtocol or does not define trafficking in persons.

No specific offence: Countries where forms of trafficking in persons are criminalizedthrough other offences due to the absence of a specific trafficking in persons offence.

Distribution of all countries according to the number of convictions recorded for thespecific offence of trafficking in persons during the reporting period

Source: UNODC/UN.GIFT

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There is, of course, considerable regional variation in compliance to standards. ManyAfrican countries still do not have legislation on human trafficking, or they have laws thatcriminalize only some aspects of human trafficking (such as child trafficking). And not all highincome countries have comprehensive legislation, either. In addition, most of the humantrafficking convictions come from just a few countries, some of which are wealthy and some ofwhich are not. This suggests that progress against human trafficking is not necessarilydetermined by income levels but is essentially a product of individual national initiative.

This research project was aimed at gathering information on legislative, institutional andcriminal justice responses, not at assessing the scale or the nature of the human traffickingproblem. It remains unclear what share of human trafficking cases come to the attention of theauthorities and whether the cases detected are representative of the underlying activity. Eachincident presents a case study of the way human trafficking is conducted in a given country, butthere may be reasons why other types of cases remain undetected. On the other hand, a largenumber of case studies can provide some interesting insights when compared across a range ofcountries and across time. The following sections discuss some of these insights.

Gender, citizenship and forms of victimization

Crime, organized crime in particular, is typically a male activity. Men make up over 90% ofthe prison populations of most countries and are particularly over-represented as perpetrators ofviolent crime. It might be assumed that human trafficking, where violence and threats are keysto the business, would likewise be overwhelmingly male dominated. But, surprisingly, the dataon the gender of those convicted for trafficking in persons do not support this premise.

The data gathered on the gender of offenders in 46 countries suggest that women play akey role as perpetrators of human trafficking. In Europe, for example, women make up a largershare of those convicted for human trafficking offences than for most other forms of crime.

Proportion of females in convictions for trafficking in persons and for all crimescombined in Europe

Source: UNODC/UN.GIFT

The criminal justice figures also shed light on the nature of the transnational networksinvolved. To date, it has remained unclear whether human trafficking enterprises were drivenprimarily by networks situated in the source countries or in the destination countries. Based onthe data collected for this report, most of the offenders were citizens of the country where theywere arrested. This suggests that local criminal networks acquire the victims and sell them tocriminal networks based in destination countries. This stands to reason since many source

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countries are relatively poor with small foreign populations. Offenders often endeavour to winthe trust of the victims and use their local connections to threaten retaliation against familymembers if victims resist. Local people are better situated to acquire and control victims.

However, in cases where the arrest took place in a high-income destination country, theoffenders were more likely to be foreign than when the arrest took place in a source country.In many instances, diaspora populations from source regions may be used as a conduit formoving victims into the countries where they will be exploited. This phenomenon also is seenin other forms of transnational trafficking.

The data also can give some tentative insights into the profile of the victims. Victims of humantrafficking were identified through the criminal justice process and through victims’ assistanceorganizations. Over 21,400 victims were identified in 2006 among the 111 countries reportingvictim data for that year. As with the offenders, the profile of the victims is highly influenced bylocal laws and priorities, which often focus on child victims and victims of sexual exploitation(usually women). With this caveat in mind, in the 61 countries where the gender and age of thevictim were specified, two thirds of the identified victims were women and 13% were girls.

Profile of victims identified by State authorities in 61 countries where information was collected,

aggregated for 2006

Source: UNODC/UN.GIFT

In the 52 countries where the form of exploitation was specified, 79% of the victims weresubjected to sexual exploitation. While it remains likely that labour exploitation and malevictims are relatively under-detected, the over-representation of sexually exploited women istrue across regions, even in countries where other forms of trafficking are routinely detected.

Human trafficking flows

Criminal justice data alone cannot give a sense of the scale of human trafficking flows, butit can give some idea about source and destination countries. Victims and perpetrators may bedetected in source, transit or destination countries. The criminal justice data therefore provideseveral independent sources of information on where victims are being acquired and wherethey are being transported.

In most of the reported cases, victims were moved across international borders. Domestictrafficking, or the exploitation of citizens in their home country, was reported by 32 countriesbut is likely under-detected due to restrictive definitions of trafficking or the greater visibility offoreign victims. Even in countries reporting domestic trafficking, foreign victims were almostalways more numerous.

Cross-border flows are not necessarily long distance flows. Much of the cross-bordertrafficking activity was between countries of the same general region, particularly betweenneighbouring countries. But there was also evidence of intercontinental trafficking. Mostremarkably, victims from East Asia were detected in more than 20 countries in regions

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throughout the world, including Europe, the Americas, the Middle East, Central Asia and Africa.This suggests that the trafficking of East Asians is a bit of a phenomenon in itself and worthy ofdetailed study. Other long distance flows include the trafficking of African victims to locationsin Europe and North America; the trafficking of Latin American victims to North America andEurope; the trafficking of Central European, Eastern European and Central Asian victims toEurope and the Middle East; and the trafficking of South Asian victims to the Middle East.

The need for continued monitoring

Aside from these insights, the primary value of this report has been to assess the informationavailable, to highlight what is not known and to suggest how information-gathering systemscould be improved. Looking at the data received, there is a clear need for an internationalstandardization of definitions along the lines suggested by the Protocol. Too often, even similarlysituated countries with compatible legal systems are counting different things. There is also aneed to encourage Member States to collect more and better information on the state of humantrafficking in their countries. Some countries could cite the number of victims or offenders, forexample, but had no data on the gender, age or citizenship of these people. Domestic crimesthat are tantamount to trafficking are not being tallied in national totals. By setting the accountingagenda, it is possible that lagging states could be encouraged to meet their obligations to passappropriate laws and in thinking about the human trafficking problem strategically.

Number of countries making data available to UNODC by topic

Source: UNODC/UN.GIFT

One of the key unanswered questions remains: Just how big is the human traffickingproblem globally? Without a sense of the magnitude of the problem, it is impossible to prioritizehuman trafficking as an issue relative to other local or transnational threats, and it is difficult toassess whether any particular intervention is having effect. While coming to an estimation basedon the present data would be premature, it is incumbent on the international community togather the information necessary to fill this gap. Far more knowledge is needed before the truesize of the market for human beings can be estimated, but this information could be gatheredthrough a sustained programme of data sharing.

This report has demonstrated that international monitoring of human trafficking trends andpatterns is possible and that a surprising wealth of information is available. But it remains apilot for a project, one with much greater potential to track the global phenomenon of humantrafficking and our collective efforts to address it. An international mechanism to monitor trendsand patterns of trafficking in persons needs to be established with the object of continuing datacollection of the sort gathered in the present survey (data on legal and institutional frameworks;criminal justice statistics; and victim service information). Such a mechanism also could worktoward gathering more information on the market context for these crimes, including data onprice and demand. Coordinated efforts require collective information systems, and the globalstruggle against trafficking in persons needs knowledge to inform strategic interventions.

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International Labour Office

Global Employment Trends for Women (*)March 2009

1. Introduction

The Global Employment Trends 2009 examined the most current information available inorder to assess the impact of the financial crisis and slowdown in world economic growth onjobs and what we could expect from several possible scenarios for the way the situation mightevolve in the year ahead. This issue of the Global Employment Trends for Women looks at thegender aspects of this impact, and updates indicators on the situation of women in labourmarkets around the world.

This report reconfirms that gender inequality remains an issue within labour marketsglobally. Women suffer multiple disadvantages in terms of access to labour markets, and oftendo not have the same level of freedom as men to choose to work. Gender differences in labourforce participation rates and unemployment rates are a persistent feature of global labourmarkets. In 2008, an estimated 6.3 per cent of the world’s female labour force was not workingbut looking for work, up from 6.0 per cent in 2007, while the corresponding rate for males was5.9 per cent in 2008, up from 5.5 per cent in 2007.

Women also face constraints in terms of sectors of economic activity in which they wouldlike to work and working conditions to which they aspire. Women are overrepresented in theagricultural sector, and if the more industrialized regions are excluded, almost half of femaleemployment can be found in this sector alone. Women are also often in a disadvantagedposition in terms of the share of vulnerable employment (i.e. unpaid family workers and own-account workers) in total employment. These workers are most likely to be characterized byinsecure employment, low earnings and low productivity. Those women who are able to securethe relative comfort of wage and salaried employment are often not receiving the sameremuneration as their male counterparts. Gender wage differentials may be due to a variety offactors, including crowding of women in low paying industries and differences in skills andwork experience, but may also be the result of discrimination. Given the constraints women arefacing, promoting gender equality and empowering women is not only an important goal of theMillennium Declaration in itself,1 it is also pivotal to achieving the new target on full andproductive employment and decent work for all, and virtually all remaining goals and targets.

By the end of 2008, working poverty, vulnerable employment and unemployment werebeginning to rise as the effects of the economic slowdown spread. With the deepening of therecession in 2009, the global jobs crisis is expected to worsen sharply. Furthermore, we canexpect that for many of those who manage to keep a job, earnings and other conditions ofemployment will deteriorate. The impact of the crisis will be felt by both men and women, butnot necessarily in the same manner. This report presents alternative scenarios for selectedlabour market indicators in 2008 and 2009 in order to illustrate the effect on gender differentialsin labour markets on the basis of changes in the economic environment.

A distinction should be made between the continued disadvantaged position of women inglobal labour markets, and the immediate impact of the current economic crisis. In developedeconomies, there are signals that the crisis may be at least as detrimental for men as for women,and possibly more so. This is suggested by the stronger increase of the unemployment rate indeveloped economies for men compared to women in 2008 (1.1 percentage points for men

(*) Si pubblicano stralci dal Global Employment Trends for Women 2009 (http://www.ilo.org).Copyright © International Labour Organization 2009.

1 See: http://www.un.org/millennium/declaration/ares552e.pdf and http://www.un.org/millenniumgoals/.

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versus 0.8 points for women). This report highlights some factors at the country level thatinfluence the gender impact in developed economies, as well as the variation in countryexperiences.

Access to full and productive employment and decent work is crucial for all, and decentwork deficits are the primary cause of poverty and social instability. The trends summarized inthis report are therefore extremely worrying for both women and men, and serve to highlightthe continued importance of an internationally coordinated effort to stop the slowdown andstart the global economy onto a much more sustainable path.

This issue of Global Employment Trends for Women starts with an analysis of recent labourmarket developments based on currently available information (Section 2; see Annex 1* fortables referred to in this report; Annex 2 for scenarios; Annex 3 for regional figures andgroupings of economies; and Annex 4 for a note on the methodology used to produce worldand regional estimates). Section 3 looks at the gender impact of the economic crisis indeveloped economies, followed by the projection of labour market indicators for 2008 and 2009in Section 4 (see Annex 5 for methodological details). A final Section 5 concludes, andhighlights a number of policy considerations.

* Per gli Allegati e le Tavole richiamati e non riportati si rimanda alla versione integrale del rapporto.

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2. Economic growth, the labour market and gender inequality

In January 2009, the IMF again revised the global economic outlook downward, followingsimilar revisions in October and November of 2008. According to the new projections, globaleconomic growth in 2009 will be only 0.5 per cent. This is considerably lower than wasexpected in November 2008, and the implications for the 2009 labour market projectionspublished in the Global Employment Trends in January 2009 will be analysed in a later sectionbelow (see Table A1 for revised estimates of economic growth).

The new estimate for global economic growth in 2008 is 3.4 per cent, which is 0.4percentage points lower than the estimate produced in late 2008.2 As Figure 1 shows, globaleconomic growth in 2008 was significantly below the rates seen in recent years, which resultedin a major weakening in a number of labour markets. After four consecutive years of decreases,the global unemployment rate increased from 5.7 per cent in 2007 to 6.0 per cent in 2008 (TableA2). The ranks of the unemployed increased by 13.8 million people between 2007 and 2008,which is the largest year-on-year increase in the period for which global estimates areavailable.3 The global number of unemployed in 2008 is estimated at 193 million.4

Figure 1 - Global unemployment trends and economic growth, by sex, 1998-2008*

* 2008 are preliminary estimates.Source: ILO, Trends Econometric Models, January 2009, see also source of Table A2.

The unemployment rate for women was 6.3 per cent in 2008, as compared to a rate of 5.9per cent for men. Between 2007 and 2008, the unemployment rate increased for both men (0.4percentage points) and women (0.3 percentage points), thus slightly reducing the gender gap in

2 World output in 2007 was revised upward (from 5.0 to 5.2 per cent), which also has an effect on the globaland regional estimates of labour market indicators for previous years produced in this report in comparison with theGlobal Employment Trends 2009 released in January 2009. See IMF, World Economic Outlook (Washington, DC,October 2008), updated in January 2009; http://www.imf.org/external/pubs/ft/weo/2009/update/01/index.htm.

3 Global and regional estimates are produced for the period 1991 to the present year.4 For the definition of unemployment, and concepts and definitions of all labour market indicators discussed in

this report, please see Key Indicators of the Labour Market, 5th Edition (Geneva, ILO, 2007), in particular thereferences to resolutions adopted by the International Conference of Labour Statisticians. See:http://www.ilo.org/public/english/employment/strat/kilm/.

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unemployment rates that has been seen in the past decade (Figure 1). In terms of numbers ofunemployed, 112 million out of the total of 193 million are men, and 81 million are women(Table A3).

The gender gap in the unemployment rate is one indication of the gender inequality inglobal labour markets. Another important aspect of this inequality is the difference in access tolabour markets, as labour market access has much to do with economic empowerment forwomen. Even though global male and female labour force participation rates show signs ofconversion, the gap is narrowing at a very slow pace and it still amounted to almost 25percentage points in 2008 (Table A4). Women made up 40.5 per cent of the global labour forcein 2008, up from 39.9 per cent in 1998.

Similar to labour force participation, there is a large gender gap in employment-to-population rates, and this gap is narrowing also very slowly. Globally, the employment-to-population rate for the female adult population increased by 1.2 percentage points between1998 and 2008, as opposed to a decrease by 1.1 percentage points for male adults (see TableA5).5 Regional differences in both levels and changes over time are shown in Figure 2.

Figure 2 - Adult employment-to-population ratios, by sex and region, 1998 and 2008* (%)

* 2008 are preliminary estimates.Source: ILO, Trends Econometric Models, January 2009, see also source of Table A2.

The female adult employment-to-population rate increased in seven out of nine regions.The largest increases can be seen in Latin America and the Caribbean, the Middle East andNorth Africa, but the rates remain well below 30 per cent for adult women in the latter tworegions. Only East Asia and South-East Asia and the Pacific saw a decrease. In East Asia,however, the female adult employment-to-population rate is very high and the gender gap inemployment-to-population rates is the smallest of all regions. In most regions, the male adultemployment-to-population rate decreased between 1998 and 2008, North Africa and Central andSouth Eastern Europe (non-EU) & CIS being the exceptions. Annex 3 presents more detailedfigures that show adult employment-to-population ratios in each region over time.

5 Excluding youth (aged 15-24), thus focusing on ‘adults’ (aged 25 and above), allows for an analysis whichmostly excludes the effects of enrolment in educational and training programmes on labour force participation andemployment-to-population rates.

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It is clear that, despite the progress made in many regions, far fewer women participate inlabour markets than men. In developed economies, part of the gender gaps in participation andemployment can be attributed to the fact that some women freely choose to stay at home andcan afford not to enter the labour market. Yet in some developing regions of the world,remaining outside of the labour force is not a choice for the majority of women but anobligation; it is likely that women would opt to work in these regions if it became sociallyacceptable to do so. This of course does not mean that these women remain at home doingnothing; most are heavily engaged in household activities and unpaid family careresponsibilities. Regardless, because most female household work continues to be classified asnon-economic activity, the women who are thus occupied are classified as outside of the labourforce. While it may not be not correct to assume that all women want employment, it is safe tosay that women want to be given the same freedom as men to choose to work and to earn asalary if they want to. This is unlikely to be the case.

Gender inequality in sectoral employment and vulnerable employment

Out of the 3.0 billion people that were employed around the world in 2008, 1.2 billion arewomen (40.4 per cent). In which sectors are women working, and what are the workingconditions faced by women? As shown in Figure 3, only a small proportion of employedwomen are working in industry (18.3 per cent in 2008, as compared to 26.6 per cent of men);the large majority are in agriculture and, increasingly, in the services sector. The services sectoraccounted for 46.3 per cent of all female employment in 2008, as compared to 41.2 per cent ofmale employment (Table A6a-c).

The global difference between the share of industrial employment in total male and femaleemployment is found in all regions, ranging from a low of 0.5 percentage points in East Asia to22.5 points in the Developed Economies and the European Union (see Figure 3). The picturewith respect to the other two sectors is more varied. In three regions the share of services intotal male employment exceeds the corresponding share in total female employment, and infour regions the same is true for the share of agriculture.

Figure 3 - Distribution of employment by sector (sectoral employment as percentage of total employment), by sex and region, 2008*

* 2008 are preliminary estimates.Source: ILO, Trends Econometric Models, January 2009, see also source of Table A2.

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Overall, women are still overrepresented in the agricultural sector. Globally, the share ofwomen employed in agriculture stands at 35.4 per cent, as compared to 32.2 per cent for men,but this proportion rises to almost half of all female employment, at 48.4 per cent, if the moreindustrialized regions such as the Developed Economies and the European Union, Central andSouth Eastern Europe (non-EU) & CIS and Latin America and the Caribbean are excluded. Thecorresponding percentage for males is 40.1, resulting in a difference of almost 8 percentagepoints in the remaining regions of the world. In Sub-Saharan Africa and South Asia theagricultural sector makes up more than 60 per cent of all female employment.

Apart from differences in sectoral employment between men and women, there areimportant differences in working conditions. At the global level, the share of vulnerableemployment in total female employment was 52.7 per cent in 2007, as compared to 49.1 percent for men, which represents a decline of 0.6 percentage points over the previous year forboth men and women (Table A7).6 The move away from vulnerable employment into wage andsalaried work can be a major step toward economic freedom and self-determination for manywomen. Economic independence or at least co-determination in resource distribution within thefamily is highest when women earn wages and salaries or are employers, lower when they areown-account workers and lowest when they are contributing family workers. The share ofwomen in wage and salaried work grew from 41.8 per cent in 1997 to 45.5 per cent in 2007,but the status group of female own-account workers saw a stronger increase (see Figure 4).

Figure 4 - Distribution of female status in employment, 2007(percentage point change from 1997 in parentheses)

Source: ILO, Trends Econometric Models, January 2009, see also source of Table A2.

The gender gap in the share of vulnerable employment in total employment for males andfemales shows a diverse picture by region. In the Developed Economies and the European

6 The indicator of vulnerable employment calculates the sum of own-account workers and contributing familyworkers as a share of total employment. Contributing family workers and own-account workers are less likely to haveformal work arrangements, and often carry a higher economic risk, which allows for the usage of the indicator onvulnerable employment in an assessment of decent work. If the proportion of vulnerable workers is sizeable, it maybe an indication of widespread poverty. The poverty connection arises because workers in the vulnerable statuses lackthe social protection and safety nets to guard against times of low economic demand and often are incapable ofgenerating sufficient savings for themselves and their families to offset these times. Some limitations of the indicatorare: (1) there might be people that carry a high economic risk despite the fact that they have a wage and salary job,and the latter should not be equated to decent work; (2) unemployed people are not covered even though they arevulnerable; (3) there can be people in the two vulnerable status groups who do not carry a high economic risk,especially in developed economies. Despite these limitations, vulnerable employment shares are indicative for informaleconomy employment, particularly for the less developed economies and regions. However, vulnerable employmentnumbers should be interpreted in combination with other labour market indicators such as unemployment andworking poverty. For more details see Chapter 1 in the Key Indicators of the Labour Market, 5th Edition (Geneva, ILO,2007; see: http://www.ilo.org/public/english/employment/strat/kilm/) and Employment Sector Working Paper No. 13,“Assessing vulnerable employment: The role of status and sector indicators in Pakistan, Namibia and Brazil” (Geneva,ILO, 2008; see: http://www.ilo.org/public/english/employment/download/wpaper/wp13.pdf).

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Union, Central and South Eastern Europe (non-EU) & CIS and Latin America, and theCaribbean, this gap was negative in 2007, meaning that women are often in less vulnerable jobsthan men. The largest gaps can be found in North Africa and the Middle East. Empoweringwomen is one of the most pressing challenges these regions have to face, and the main route toreaching this successfully is by giving women the chance of a decent job. Heavy investment inwomen’s education, changes in the labour legislation and recognition and sharing of familyresponsibilities with men set the preconditions for women to equally participate in labourmarkets. Sub-Saharan Africa and South Asia, two of the poorest regions, have not only arelatively high share of vulnerable employment in total employment, but also a relatively largegender gap in vulnerable employment shares (exceeding ten percentage points).

The sectoral distribution of male and female employment, as well as the differences invulnerable employment shares, underline the fact that widening access to labour markets is notthe same as providing access to decent jobs. At the country level, the difference between labourmarket access and access to decent work can be illustrated by examining Pakistan. Labourmarkets in this country are characterized by large gender gaps (see Box 1), but recentindustrialization has certainly expanded access to labour markets for women. From 2000 to 2006,the employment-to-population rate, for example, increased by almost six percentage points.7

However, during the same period, the share of vulnerable employment in total employment ofwomen increased by 6.5 points. This was principally due to the increase in the number of femalecontributing family workers. Whereas for men close to two thirds of the additional employmentthat was created during 2000 to 2006 consisted of wage employment, for women more than twothirds consisted of contributing family work. Even in manufacturing, which constitutes the keysource of employment creation outside the agricultural sector, the share of women in vulnerableemployment is increasing. The opposite trend can be observed for males.8

7 Pakistan Employment Trends No. 3 (Islamabad, Ministry of Labour and Manpower, 2008), Table 3.8 “Assessing vulnerable employment: the role of status and sector indicators in Pakistan, Namibia and Brazil”,

Employment Working Paper No. 13 (Geneva, ILO, 2008); see: http://www.ilo.org/public/english/employment/download/wpaper/wp13.pdf, Table 3.

Box 1 - Women in Pakistan’s labour market

In 2007, more than nine million Pakistani women were employed, which is almost fourmillion more than in 2000 (an increase of more than 80 per cent). Nevertheless, the employment-to-population ratio for women (19.9 per cent) is four times lower than for men (79.1 per cent) inthe country and much lower than the ratio in South Asia as a whole (33.5 per cent).

Despite a significant widening of employment opportunities, gender equality in termsof labour market access has not yet been achieved in Pakistan, and the same is true forconditions of employment. As Figure B1-1 shows, women who did find work are oftenconfined to the agricultural sector of the economy and in status groups that carry highereconomic risk and a lesser likelihood of meeting the characteristics that define decent work,including social protection, basic rights and a voice at work.

Figure B1-1 - Five dimensions of Pakistan’s gender gap in labour markets, 2007

Source: Calculated using Pakistan Labour Force Survey, 2006/2007 (Islamabad, Federal Bureau of Statistics).

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Gender inequality in African agriculture

The recent food crisis showed the risk of ignoring agriculture, not only for the peopleliving in rural areas but for the world as a whole, and international organizations as well assome governments have recently put a stronger focus on the sector. It is more and more widelyaccepted that rural development is a key to poverty reduction. But it is also a key to moregender equality as many women make a living out of working in the agriculture sector. Despitea decline in the share of agriculture in total female employment, agriculture still provides aliving for many women and their families – especially in Africa.

Africa suffered more severely from the recent food crisis than other continents.Remarkably, the food crisis hit not only the least developed, agriculture-based countries in Sub-Saharan Africa, but also the better-off countries in North Africa where agriculture is no longerthe main sector in terms of employment and is contributing little to GDP. One of the reasonswhy economies in Africa were so hard hit was the desolate state of the agriculture sector inboth parts of Africa. As a result, Africa, which was more than self-sufficient in food 50 yearsago, is now a massive food importer.9

Many of the challenges facing Africa’s agricultural sector stem from a few root causes,including poor political and economic governance, inadequate funding for agriculture, poorwater resources management, and neglect of research and development. But throughout Africaanother very important reason for the failure of the sector have been gender inequality and lackof empowerment of women, who are often running this sector.

As was noted before, Sub-Saharan Africa is – besides South Asia – the region with thehighest share of female employment in the agricultural sector. Even though more women workin the service sector in North Africa, agriculture still plays an important role in providing jobsfor women in this region as well. Whereas in sub-Saharan Africa the employment sharedecreased over the last ten years (by 6.6 percentage points between 1998 and 2008) as inalmost all regions, it increased in North Africa by 6.8 points (see Table A6b).

There is little information available on the regional level regarding the key elements thatwould make employment in agriculture decent and productive. However, looking at vulnerableemployment groups (own-account workers and unpaid contributing family workers) leads to

9 See: The African Food Crisis: Lessons from the Asian Green Revolution, ed. by Göran Djurefeldt, et al.,Cambridge, 2005.

In general, women also have lower wages than men, and their wages increase lessover time (Figure B1-2). This can be explained in part by the large gap in educationalattainment of women and men. In 2007, just 26.8 per cent of economically active womenhad more than 1 year of formal education, compared to 61.5 per cent of men. As reflectedin growing literacy rates (from 29.1 to 39.2 per cent between 2000 and 2007), relativelymore women gained access to education, but equality in education is still far from being areality in Pakistan.

Figure B1-2 - Pakistan, average monthly wages of employees, by sex

Source: Pakistan Employment Trends, various issues (Islamabad, Ministry of Labour, LMIA Unit, see:www.lmis.gov.pk).

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interesting insights. Unfortunately, the indicator of vulnerable employment is not available bysector for many countries. But country level analysis does make it clear that the majority of jobsin agriculture are most likely lacking some elements of decent and productive work. Womenmainly work as contributing family workers and men very often are own-account workers. Andif women manage to change their status it often means moving from being an unpaidcontributing family worker to being an own-account worker.

As Figures 5a and 5b show, vulnerable employment and employment in agriculturechanged in parallel in both Sub-Saharan Africa and North Africa. The sharp increase since 2002of vulnerable employment in North Africa is remarkable and not seen in any other region. It isalso interesting to note that the total number of female unpaid contributing family workers andfemale agricultural workers in North Africa are very close, making it likely that this status groupmakes up the majority of jobs for women in agriculture.

In sub-Saharan Africa the picture looks very different (see Figure 5b). Here there are morefemale own-account workers than contributing family workers and overall there are many moreagricultural workers than contributing family workers. But again, both categories increased inparallel with the increase of female workers in agriculture, indicating that the majority of jobscreated in the sector continue to be vulnerable employment, outside of economically less riskywage and salary jobs.

* 2008 are preliminary estimates.Source: ILO, Trends Econometric Models, January 2009, see also source of Table A2.

How can vulnerable employment be transformed into decent work? One precondition isthat productivity must increase. This will not only lay the groundwork for earnings to risesufficiently for people to escape poverty, but it is often the first step towards more socialsecurity and other components of decent work. Even though productivity in agriculture hasincreased in some countries, this increase has not been very impressive in many countries andthe levels of output in economies in Sub-Saharan Africa remain very low.10 Many countries havenot seen an increase in productivity at all, making it almost impossible to take people in ruralareas out of poverty. If one adds that women are often profiting less from wage increasesinduced by productivity increases than men as a result of the weaker status of women, it isobvious that there has been very little potential for women to improve their situation and thesituation of their families.

Despite the differences in levels of productivity in North African countries and countries inSub-Saharan Africa, and despite the different role agriculture plays in providing employment forwomen, women’s daily work life characteristics all over Africa are similar. The majority ofwomen in agriculture are smallholder subsistence farmers or spouses of smallholder subsistentfarmers. They substantially contribute to national agricultural production and food security.Large scale farming and commercial production is less of an income source for women in rural

10 Key Indicators of the Labour market (Geneva, ILO, 2007). See: http://www.ilo.org/public/english/employment/strat/kilm/.

Figure 5a - Female employment inagriculture, by status, 1998-2008,

North Africa (thousands)

Figure 5b - Female employment inagriculture, by status, 1998-2008,Sub-Saharan Africa (thousands)

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areas, which is why structural adjustment programmes often do not reach women. It isestimated that rural women in Africa produce 80 per cent of the food.11 They do most of thework in storing, processing, transporting and marketing food. It has been shown that whenwomen receive the same levels of education, experience and farm inputs as men, they canincrease yields of some crops by 22 per cent.12 But the important contribution of women takesplace under difficult circumstances, as highlighted in Box 2.

Given the key role of women in the agricultural sector, improving their situation meansprogress for the sector and for the economy as a whole. And many of the measures that wouldbe beneficial are not even costly to implement. The list of possible measures includes:increasing women’s access to farming land and fertilizers, credit, and education; increasing

11 World Employment Report 2004-05 (Geneva, ILO, 2005). See: http://www.ilo.org/public/english/employment/strat/wer2004.htm.

12 International Food Policy Research Institute (2005): Women: still the key to food and nutrition security.(Issue brief 33) Washington, DC. See: http://www.ifpri.org/pubs/ib/ib33.pdf.

Box 2 - Characteristics of women in African agriculture

Women generally own less land and the land they have is often of lower quality thanthe land owned by men. According to the International Development Research Centre,women in Africa only own 1 per cent of the land. (1)

Financial resources are limited for women: they receive 7 per cent of the agriculturalextension services and less than 10 per cent of the credit offered to small-scale farmers. (1)

Population growth is still a pressing issue in Africa and families in rural areas havemore children than in urban areas. Population in North Africa is currently growing at a rateof 2.2 per cent a year and in sub-Saharan Africa the rate is 2.7 per cent. This has forcedfarming families to sub-divide their land time and again, leading to tiny plots or familiesmoving onto unsuitable, overworked land. This problem is compounded by the state ofAfrica’s soils. In Sub-Saharan Africa, soil quality is classified as degraded in about 72 percent of arable land and 31 per cent of pasture land. (2)

Male rural-to-urban migration continues to be an Africa-wide phenomenon. While thiscan increase remittances to rural areas and strengthen market linkages between urban andrural areas, it leaves rural women increasingly responsible for farming and for meeting theirhouseholds’ immediate needs. Women have to take over the tasks formerly carried out bymen in addition to those for which they are traditionally responsible.

Women have to contend with limited access to financial and technical resources. Theyoften must depend on local know-how and cannot access appropriate technology.

Women lack political influence. They are not represented when policies are formulated,when programmes are developed, when budgets are drawn or when decisions are madeabout their work and their life. Even within farming organizations, the pattern is frequentlyfound: in Zimbabwe, for example, women constitute about 75 per cent of the members ofthe Zimbabwe Farmers Union, but only 5 per cent of the officers are female. (3)

Social protection systems are almost non-existent in rural areas in Africa, but if theyexist they often discriminate against women.

Girls receive less education, especially in poor rural areas.Social norms play a much stronger role in rural areas, often discriminating against

women and girls.Decision-making structures within families are not in favour of women, making it

difficult for them to secure a better future for their daughters.

(1) Quoted from http://www.new-ag.info/08/04/focuson/focuson6.php. In some countries, legislationmakes it impossible for women to inherit land when their husband dies. They can also often not pass the landon to their daughters (see, for example: Judy Oglethorpe, ‘AIDS, women, land, and natural resources in Africa:current challenges’, Gender & Development, Volume 16, Issue 1 March 2008, pages 85-100).

(2) Food and Agriculture Organization (FAO), quoted from http://news.bbc.co.uk/1/hi/world/africa/4662232.stm.

(3) See: http://www.new-ag.info/08/04/focuson/focuson6.php.

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women’s participation in decision-making; and strengthening women’s role within the family.All these measures are crucial to guaranteeing food security and improving the nutritional statusof children. According to a study conducted by the International Food Policy Research Institute,if men and women had equal influence in decision-making, an additional 1.7 million childrenwould be adequately nourished in sub-Saharan Africa.13 The impact would be of similarimportance in North Africa.

The case of North Africa showed that agriculture can be a creator of new jobs for women,and even though they often enter the labour market under vulnerable conditions, being part ofthe labour force already gives them additional economic power. The potential which the sectoroffers in creating jobs for women should be used in other regions as well. However, jobstrategies have to be developed while keeping in mind that in the long run only decent jobshave a sustainable impact on poverty reduction.

An often discussed question is whether Africa can reach the MDGs by the year 2015. NorthAfrica might be closer to reaching the goals than Sub-Saharan Africa. However, due to thecurrent economic crisis, the likelihood of reaching the goals has diminished. Strengthening therole of women in agriculture and ensuring decent work for a growing number of women is onestep to help economies to get back on track. This would help to reach the MDG 1 on halvingthe share of poor people, and especially the newly introduced target on productiveemployment and decent work for all. Policies and efforts to strengthen the role of women inagriculture need of course to be embedded into a broader strategy of rural development. Such astrategy should include reform of agricultural policies to strengthen the sector, and also reformof trade and tariffs. In addition, domestic subsidies, protective tariffs, and other trade barriersimposed by wealthy nations harm farmers in Africa and other poor developing nations.Investments are needed in rural infrastructure, education and social capital. Agricultural inputand crop technologies should focus on land and natural resources conservation, while at thesame time increasing agricultural productivity. Finally, dramatic increases in investment inagricultural research and extension are needed if any plan for food and nutrition security inAfrica is to be successful.

Gender inequality in wages

One of the dimensions of access to decent and productive employment is the measure ofthe gender pay gap (or gender wage differential), i.e. the difference between the wages earnedby women and those earned by men. Gender wage differentials may be best explained by avariety of factors, such as occupation, age, education, work experience and seniority in job, jobtenure, training, occupational segregation, etc. Other factors such as the regulations andpractices concerning work-and-family life, childcare facilities and other social rights play asignificant role in the participation of women in the labour force, in their occupational choices,and in the employment patterns that affect the gender wage gap. Important questions arewhether there is equal remuneration for work of equal value, and whether occupationalsegregation and wage differentials within countries have widened or narrowed recently, butsuch questions are difficult to analyse in view of limitations in both research and data. Foremployees, an appropriate type of wage statistics would include detailed levels of occupationalwages (either wage rates or earnings), as occupations can be taken as a proxy to similar orcomparable levels of education, skills, etc. if not seniority in the job.

Recent analyses of labour markets in Europe and Central Asia reached the conclusion thatalthough the reduction of the gender pay gap is a major political objective for governments andthe social partners, progress remains slow and the situation has even deteriorated in certaincountries. In 2007, the European Commission noted that one of the consequences of thedifferences and inequalities which women face on the labour market is the persistent genderpay gap. Women earn an average of 15 per cent less than men for every hour worked.14

13 See: http://www.unicef.org/sowc07/press/release.php.14 Report on equality between women and men - 2007, European Commission, Directorate-General for

Employment, Social Affairs and Equal Opportunities, February 2007. See: http://ec.europa.eu/employment_social/publications/2007/keaj07001_en.pdf.

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In the United States, several studies of the National Committee on Pay Equity show thatwage gaps continue to exist there and that the wage gap has been closing at a very slow rate.15

According to an article produced by the International Poverty Centre in 2008 focusing ongender gap indicators among urban adults in Argentina, Brazil, Chile, El Salvador and Mexico,the female hourly wage was around 80 per cent of that of males for all countries, exceptArgentina with a ratio of 92 per cent.16

Evidence from Bangladesh suggests that women tend to be concentrated in lower-payingindustries, and do not have access to the same type of jobs as men. Furthermore, even aftercontrolling for differences in age, education, industry and other factors, there remains a gap inwages between men and women. Such a gap raises concerns about discriminatory practices(see Box 3).

In his Report prepared for the 8th European Regional Meeting, the Director-Generalfocused on the trend in the wage gap, concluding that, on average, the gap between men’s and

15 See: http://www.pay-equity.org/.16 The Burden of Gender Inequalities for Society, by J. Costa, E. Silva and M. Medeiros, in Poverty in Focus,

International Policy Centre, January 2008. See: http://www.undp-povertycentre.org/pub/IPCPovertyInFocus13.pdf.

Box 3 - Lower wages of Bangladeshi women raise concerns about discrimination

Why do Bangladeshi women earn so much less than their male counterparts? Thisquestion was the starting point for a recent ILO Working Paper, ‘The gender wage gap inBangladesh’. (1) The study analysed data from the largest ever national occupational wagesurvey in Bangladesh, which was conducted in 2007 by the Bangladesh Bureau of Statistics(BBS) with technical and financial support from the ILO. The study focuses on data forapproximately 41,000 workers for which hourly wage rates could be calculated from thesurvey data. Using econometric modelling techniques, the paper presents the first estimatesof hourly gender wage gaps by level of education, establishment size and individualindustry. It highlights the significant effect of gender-based occupational and industrialsegregation in shaping men’s and women’s average wage rates in Bangladesh.

Even after controlling for factors such as differences in age, education, industry,occupational type and location, women earn 15.9 per cent less per hour than men.Furthermore, the survey data indicate that women tend to be grouped in lower-payingindustries and do not have access to the same types of jobs as men. If this “segregationeffect” is factored in, the gender wage gap increases by 7.2 percentage points – to anestimated 23.1 per cent. The largest male-female wage gaps are in the construction and hoteland restaurant industries (in which women earn an average of 30 per cent less than men perhour), and in small- to mid-sized enterprises (those with between 6 and 20 workers). Thesmallest gaps are in the service industries, such as education, health and social work.

The study showed that as women’s education increases, the male-female wage gapdecreases, because women tend to see more benefits from additional education in terms ofearnings than men. Completing secondary education carries a major benefit: while womenwho have not completed primary education earn an average of 22 per cent less than their maleequivalents, this differential narrows to only 4 per cent for those with secondary education.

It is evident that investment in education – at both primary and secondary levels –could play a substantial role in lowering the overall gender wage gap in Bangladesh. Thesurvey results also indicate that if policy-makers focus on measures to reduce occupationalsegregation, this could go a long way to reduce gender-based earnings inequalities.Progress on these two fronts could promote broad-based social and economic developmentin Bangladesh, as higher levels of educational attainment would improve workerproductivity, while breaking down occupational segregation would promote greater equityand efficiency in the labour market.

(1) S. Kapsos, 2008. “The gender wage gap in Bangladesh”, ILO Asia-Pacific Working Paper Series, May2008; http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/documents/publication/wcms_098063.pdf.

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women’s wages narrowed in the EU between 1995 and 2006. It narrowed by over 10percentage points in Hungary, Ireland, Lithuania and Romania. However, it widened in five ofthe EU-27 countries: Denmark, Germany, Italy, Portugal and Sweden. In 2006, the gender wagegap ranged between approximately 4 per cent in Malta and 25 per cent in Estonia. In Turkey,men employed in manufacturing earn twice as much as women. The gender wage gap is also acause for concern in the Russian Federation and Ukraine, at 39 and 28 per cent respectively.17

It is difficult to make inter-country comparisons on wage differentials; very often detailedstatistics are inadequate, or simply country-specific. There is no definitive general conclusion asto the extent of differences in pay between men and women. However there is strong nationalevidence that wage gaps persist. Throughout most regions and many occupations, women arepaid less money than men for the same job. In a majority of countries, women’s wagesrepresent between 70 and 90 per cent of men’s wages, with even lower ratios in some Asianand Latin American countries.18

Gender inequality in poverty

As was highlighted in the Global Employment Trends 2009, developing economies saw acontinuation of the downward trends in working poverty witnessed in recent years up to 2007.Estimates of the proportion of the employed who are working but also fall below an acceptedpoverty line (the working poor) were included in that report and are repeated in this issue ofGlobal Employment Trends for Women (see Table A8). Two regions that stand out in terms ofhigh shares of extremely working poor are Sub-Saharan Africa and South Asia, while levels ofworking poverty are also considerable in South-East Asia and the Pacific, and East Asia. TableA8 also shows that around four fifths of the employed are classified as working poor in Sub-Saharan Africa and South Asia in 2007.

Although working poor indicators by sex are not yet widely available, there is someevidence that there are important gender-based differences. In India, for example, the latestnational labour force survey, which was conducted in 2004/2005, not only gathered data onworkers’ labour force characteristics, but also on household consumption.19 The survey revealsthat only one out of three women aged 15 and above is classified as economically active versusmore than 83 per cent of men. Those women that do work face a considerably higher incidenceof poverty: 36.1 per cent of employed women are considered working poor on the basis ofUSD 1 per day versus a working poverty rate of 30 per cent for men. An astounding 86.4 percent of employed women live with their families on less than USD 2 per person per day, versus81.4 per cent of employed men.

Gender-based differences in working poverty may result from a number of factors thatwere highlighted before. These include gender inequalities in sectoral employment andvulnerable employment. In South Asia, women also have disadvantages in terms of access toeducation, which limits their chances on decent and productive work.20

The national labour force survey in India also captures information on children below theage of 15. These data provide evidence that young girls bear the brunt of poverty-induced childlabour. First, it is clear that poverty drives child labour: 96 per cent of employed girls and boyslive in households with per-capita consumption below USD 2 per person per day. But younggirls are disproportionately affected: according to the survey, while women aged 15 and abovecomprise only 27 per cent of all employed persons in India, young girls account for 42 per centof all children in employment. These findings raise grave concerns about the impact of theeconomic crisis on the working poor, and especially on women and children.

17 Delivering Decent Work in Europe and Central Asia, Report of the Director-General, Volume I, Part 2, 8thEuropean Regional Meeting, Lisbon, February 2009; http://www.ilo.org/public/english/region/eurpro/geneva/download/events/lisbon2009/dgreport11_en.pdf.

18 Global Wage Report 2008/09 (Geneva, ILO, 2008); http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_100786.pdf.

19 National Sample Survey, 61st Round, India National Sample Survey Organisation; http://chakkdeindia.org/2008/04/23/national-sample-survey-organisation-of-india/.

20 Global Employment Trends for Youth (Geneva, ILO, 2008); http://www.ilo.org/public/english/employment/strat/download/gety08.pdf.