Gender employment and equity - Effects of foreign direct investment in rural Indonesia
by Karin Astrid Siegmann, Pakistan
This study assesses the impact of globalisation on gender equity in Indonesia. It concentrates on rural Indonesia where the majority of the population lives, and where gender gaps in access to education and income are wider than in urban parts of the country. Foreign direct investment (FDI) is selected as an aspect of globalisation, which is a special concern for policy-makers in Indonesia. In particular, after the Asian Financial Crisis, it was hoped that transnational corporations' (TNCs') activities created jobs in the troubled economy. The investigation focuses on the effects of FDI on gendered labour markets. It thereby looks at the gender composition of the workforce, female and male workers' employment conditions and gender wage inequality in foreign and domestic firms. Interactions between the labour market and domestic spheres are assumed; hence, remunerated productive work and non-remunerated reproductive work are investigated.
The research strategy of between-method triangulation has been chosen, denoting the combination of quantitative and qualitative types of data generation and analysis. Secondary quantitative data were taken from recent Indonesian household and establishment surveys. Qualitative data were collected in 2002 through focus group discussions (FGDs) in four sectors of rural Indonesia, namely, estates, mining, manufacturing, and hotels.
Based on previous theoretical and empirical work on gender and globalisation, it is assumed that FDI leads to a relatively greater increase in paid employment for women than for men (working hypothesis H1a), to a relatively higher increase in the total working time for women than for men (H1b) and to a general deterioration of the quality of employment with more severe consequences for female jobs (H2). Further, it is hypothesised that FDI does not induce a decrease in gender wage inequality (H3).
Across sectors, it was found that FDI influences female as well as male wages positively and that employment in foreign firms always increases female total working time. Beyond these findings, the results show that an assessment of the working hypotheses depends on the specific sector under consideration. However, two underlying mechanisms have been identified which generate the sectorally differing results. A cost effect associated with TNCs' greater orientation towards the world market is the preferential recruitment of, on average, lower paid female workers. In light of global competitive cost considerations, this appears as a rational strategy for TNCs. Conversely, foreign firms' advanced technological endowments relative to domestic companies require a well-educated workforce with technical skills. In light of these perspectives, gender gaps in education, which are particularly pronounced in rural Indonesia, and, on average, women's weaker labour market attachment disadvantage female workers' employment.
Both effects are mediated by a reproductive constraint. This refers to the asymmetric distribution of reproductive obligations between female and male household members, whereby female input into in the domestic economy is more demanding relative to that of males. The reproductive constraint channels the technology effect, for example, as it brings about a higher female labour turnover due to childbirth and childcare. From the employers' perspective, on the job training of female workers is less probable to generate returns due to their weaker labour market attachment. This is of particular relevance to human capital-intensive TNCs. Likewise; the reproductive constraint intervenes into FDI effects on employment quality for the female and male workforce. Female workers' disposable time is squeezed by labour supply to the reproductive economy, deterring them from active participation in trade unions. Although the on average larger and more visible foreign firms have a comparative advantage in organising the workforce, women's interests are, consequently, less well-represented in trade unions. Finally, gender wage inequality is influenced by female obligations in the household. The reduced recruitment of female workers in skill- and/or technology-intensive jobs due to their lower schooling and weaker labour market attachment means that FDI-related wage premia benefit male relative to female workers, thus increasing gender wage inequality.
These results offer policy intervention entry points by various actors for more gender equality in labour markets in rural Indonesia. In the short-term, policy approaches include improved female access to technical training, provision of childcare for the workforce, as well as support for women in trade unions in order to strengthen female bargaining power in industrial relations. Long-term approaches would aim at more equal burden-sharing between women and men in reproductive tasks as their asymmetrical distribution is central in generating and perpetuating gender inequality in labour markets.
Gender implications of Nepal’s accession to the WTO
by Hiramani Ghimire, Nepal
Trade liberalization within the WTO framework could have mixed consequences for women. These refer to access to resources, women's participation in the economy, educational status, employment opportunities, and wages. With regard to employment, it appears that opportunities will expand. However, the quality of job will not necessarily improve; neither will women's working conditions. The growing body of research-based literature on the impact of trade liberalization on women comes up with two important sets of generalizations. First, trade liberalization, and the ensuing export orientation, usually result in the feminization of labor. This is associated with mental and physical stress among women workers. Poor working conditions and unacceptable gender gaps in wages are part of the problem. Second, trade policies designed to achieve high growth rates often succumb to gender biases that put severe restrictions on optimum allocation of resources. Concentration of women's creative faculties on the production of goods and services may also lead to strained social and family relations. In developing countries like Nepal, women have less access to education, technological training, credit, and land ownership. This limits their opportunities to take advantage of liberalized trade. In some cases, this even reinforces existing inequalities.
There is also a bright picture. Growth in women's employment and incomes could promote their economic independence. As a result, their influence in the family and society would increase. Further, their range of choices will expand. Increased incomes could be reflected in their children's quality of life (e.g., education, health). Higher incomes for women could also contribute to narrowing the gap between men and women in terms of exclusion and subordination. In other words, gender relations can improve.
This indicates that trade policies are not really gender-neutral as they are sometimes supposed to be. They have to be studied within the socio-cultural and political context, and not in isolation. If so, Nepal's trade policies may not be regarded as gender-sensitive. In fact, they have always lacked gender perspective. This runs counter to Nepal's stated development objectives, which show a clear commitment to gender equity.
There is thus a clear case for reviewing our position. Strategic options are available to move ahead with redefined commitments. Government agencies have a very important role to play in this context. However, it would be impractical to look to the government alone. The private sector and civil society organizations have to come on board.
