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Abstracts
Global Financial Crisis: Response of South Asia
The financial crisis in South Asia: From jobless growth to jobless slump?
Karin Astrid Siegmann*
This paper investigates the impact of the global financial crisis in the South Asian subcontinent in terms of qualitative and quantitative aspects of employment. The past two decades have been characterized by a quantum leap as regards the subcontinent’s integration into the world economy. This has contributed to rising growth rates, peaking at nine percent annual GDP growth in 2006. However, globalization has not led to proportional gains in employment. While South Asian countries were integrating fast with the global economy, there has been a trend to move away from large enterprises, stable work forces and work systems towards flexible production processes associated with precarious employment patterns and pay. The largely jobless growth has lowered labor standards and increased the vulnerability of about 90 percent of the workforce engaged in the informal sector (Mahbub ul Haq Human Development Centre 2004).
Greater integration into global markets has also increased South Asia’s vulnerability to the global financial crisis. This has been mediated through, connectivity to global financial markets as well as the high degree of export-orientation of economies across the sub-continent. This is especially true in the case of India. Whereas the grave macro-economic consequences of the crisis in South Asia have been pointed out in the few analyses available so far, employment remains a footnote therein - if it is mentioned at all. It is likely, though, that amongst others, the collapse of largely labor-intensive exports goes hand in hand with large-scale job losses and further pressure to accept poor pay and indecent working conditions in order to escape unemployment and further impoverishment.
In order to assess quantitative and qualitative employment dimensions of the global financial crisis in the world’s most populous region, this paper analyzes a patchwork of recent survey data and gray literature. Special attention will be given to women’s work as their poorly remunerated employment in export sectors, such as textile manufacturing and cash crop cultivation, has significantly helped to increase their economies’ competitiveness during integration into the world market. While theoretically contributing to a labor economics of recession, this project will enhance the visibility of working victims of the financial crisis in order to come up with suggestions on how to strengthen South Asian workers’ resilience against the volatilities of a globalized labor market.
 * Holding a Ph.D. in Agricultural Economics from the University of Bonn, Germany, Karin Astrid Siegmann works as a lecturer in Labour and Gender Economics at the Institute of Social Studies (ISS), The Hague. During the past years, she has investigated gender dynamics of labor markets influenced by global restructuring. Before joining the ISS, she worked as a research fellow at the Sustainable Development Policy Institute (SDPI) in Islamabad, Pakistan.
Gender dimensions of global financial crisis: Case study of India
Sakuntala Narasimhan*
Most analyses of the global financial crisis focus on economic dimensions in general and have been gender-neutral. Few feminist perspectives have been put forth, around the effects of the financial crisis on women in developed countries. Adverse effects of the recession on women have been different in developed countries vis-à-vis developing countries, especially in the economies of south Asia that depend significantly on export earnings for maintaining GDP growth.
This paper focuses on gender-disaggregated effects on women in the developing countries of south Asia, with particular reference to the Indian experience, and looks at actions that can be -and need to be- taken to minimize the domino effects of a global recession originating in developed countries.
Although women workers in the developed countries have also lost their jobs in the financial meltdown, the socio-cultural factors in the Asian region cause a difference in the impact of job losses. India has an export driven economic policy, and when orders from the West dry up because of the recession, export units close down or report business losses. Nearly 10 million jobs have been lost in the export sector alone. Case studies among females at the two ends of the economic spectrum – the high-earning IT sector, on the one hand, and the garment exports business where earnings are near subsistence levels, on the other – show that economic distress has different social repercussions in cultures marked by Asian values. There are no social safety nets and no shelters for women who are victims of mental or physical abuse or for women who are financially dependant on others.
This paper advocates a rethinking of the export driven model of development if we want to shield ourselves from crises in the developed world and aim for sustainable development coupled with gender equity. The paper also takes note of the manifesto on “Gender equality to fight the economic crisis” put out by the Feminist New Deal global network.
 *Sakuntala Narasimhan is an award winning Indian columnist/author/academic resource person specializing in gender and development.
Response of Bangladesh to global financial crisis
Selim Raihan*
The world economy is suffering due to an unfathomable and prolonged recession as an outcome of the financial meltdown that began with the housing price crisis in the United States.
The financial implications of the global macroeconomic imbalances that have persisted and enabled the housing snowball to enlarge with the spread of toxic mortgage-backed securities first became apparent in September and October 2008 with the collapse of major investment banks and mortgage loan institutions, and the credit freeze and the panic that ensued in global equity markets (James et al 2009).
Since then the global economy has changed spectacularly, spreading to both rich and poor economies. (Raihan and Chowdhury 2009). At the onset of the global financial crisis there was some debate over whether or not Bangladesh would be impacted by the initial shockwaves or possibly even be insulated from any significant adverse effects (Raihan et al 2009). But at the end of the Fiscal Year 2009 and the beginning of the Fiscal Year 2010 it is apparent that some crucial sectors of the small economy suffered. So its no longer a question of “whether” the sectors will be affected, but “which sectors” and “how much” the ongoing crisis will affect the economy.
The purpose of the paper “Response of Bangladesh to Global Financial Crisis” is to identify the most vulnerable sectors of the economy during the crisis and also to provide an analysis of the overall impact on the economy using computable general equilibrium analysis. The impacts on the Bangladesh economy will depend on the nature, scope, severity and duration of the crisis. The economy of Bangladesh has become increasingly integrated with the global economy in recent years, however the country’s financial sector is not that much globally integrated (Raihan and Chowdhury 2009). As foreign private portfolio holdings in the equity market are relatively small and also currency transfer abroad is restricted, there is little chance of large-scale capital flight. So, it can be expected that the country’s financial sector is not going to be impacted directly. What could happen is that, there may be some adverse indirect impacts through three channels that are vital for the economy. These are export earnings, remittances and foreign aid.
Export earnings and remittances have always played a critical role in the Bangladesh economy. Ready-made garments (RMG), leather, jute, tea and frozen food are the highest export earners for Bangladesh with RMG having a share of about 75%. All these sectors except RMG have experienced a negative growth both in terms of value and volume during July 2008 and February 2009. Though the RMG sector secured some positive growth during this period the export growth rate slowed down. It has also been observed that though the inflow of remittances increased, the number of migrant workers going abroad dropped significantly during 2009. The third channel is foreign aid, the disbursement of which is expected to be seriously affected and consequently many of the development projects of the economy would be threatened.
The government has already announced a number of financial, fiscal and policy initiatives to mitigate the economic slowdown, some of which have already been adopted. The primary financial incentive announced by Bangladesh Bank, was a reduction in the lending interest rate of commercial banks to a maximum of 13 per cent, down from around 14.75 per cent. Also, the Ministry of Finance announced a financial package for the fiscal year 2009. The main fiscal initiative is a stimulus package amounting to Tk. 3,424 crore, consisting of cash subsidies, loan facilities and augmentation of social security schemes (Raihan et al 2009). However the fiscal stimulus package and its components are somewhat short-sighted and ambiguous in nature (Raihan Selim et al 2009). There needs to be a detailed work plan on how the initiatives will be implemented, and some sub-sectors need to be more specifically targeted.
References:
James E. W., Park D., Jha S., Jongwanich J., Terada-Hagiwara A., and Sumulong L., 2009, ‘The US Financial Crisis, Global Financial Turmoil, and Developing Asia: Is the Era of High Growth at an End?’, IWS Documented News Daily Postings, 16 January 2009.
Chowdhury R., Raihan S. 2009, ‘Global financial crisis: Implications for Bangladesh’, The New Nation, 20 February 2009.
Raihan S., Khan A. E., Iftekhar S. Md., Eusef A. M., Haq I. A.K., 2009, Bangladesh Economic Outlook, Volume 2, Issue 3, March 2009. 
 *Dr. Selim Raihan is Associate Professor at the Department of Economies, University of Dhaka, Bangladesh. He is a trade economist and an expert on economic modeling. He has published several books and articles related to trade issues and has the experience of working with various international organizations.
Impact of the financial crisis on the socio-economy of Pakistan
Vaqar Ahmed*
In many parts of the developing world, the global financial crisis (which followed the food and oil price crisis) wiped out the gains made towards the achievement of the millennium development goals (MDGs). By 2008 the first goal, which placed an emphasis on the eradication of poverty and hunger was low on the priority list as most developing countries now focused more on macroeconomic stabilisation. According to the Global Monitoring Report 2009, the present crisis is the severest since the Great Depression. As reflected by the Global Financial Monitoring Report 2009, the crisis is hitting developing countries hard through trade and financial market channels. These countries are also not able to fully provide the necessary social safety nets in order to protect the vulnerable segment of the population. The pace of global poverty reduction has slowed as official aid and private capital flows have decreased.
In this paper we discuss the impact of the financial crisis on the socio-economy of Pakistan. Using a neo-classical framework we will also provide the macro-micro impacts of a fall in exports, rise in import price of food, and strong support by expatriates in the form of rising remittances. Our results indicate an increase in both poverty and inequality as a result of uncertain economic milieu. Finally we discuss in detail how Pakistan managed to start showing signs of stability moving towards recovery.
Bionote?
 * Dr. Vaqar Ahmed works at the Planning Commission, Government of Pakistan.
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