ActionAid and Public Services International recently published a new report – The Care Contradiction – looking into how the International Monetary Fund (IMF) programs are impacting women workers. The report shows that although the IMF has recently come up with a Gender Mainstreaming Strategy, its actions in the field of building gender justice essentially add up to throwing sand in the observers’ eyes.
As the Gender Mainstreaming Strategy stands in place, the budget cuts that are forced upon countries by the IMF, especially in the Global South, continue to undermine women’s basic rights when it comes to accessing public services, conditions in the workplace, and their ability to find employment.
The author of the report, Roos Saalbrink, met with the People’s Health Dispatch to discuss the main findings of The Care Contradiction.
People’s Health Dispatch (PHD): Let’s start with the basics of the report. You say that the impacts of IMF programs on women’s lives are multifold. What do the IMF-imposed budget cuts and austerity measures mean in practice for women?
Roos Saalbrink (RS): IMF loan programs come with policy conditionalities or pressures to follow a certain prescription of economic policies. This is also known as fiscal consolidation or fiscal austerity. Essentially, on top of public budget cuts, that includes freezes to public sector wage bills. These policies include freezes of wages of public workers, including health and education workers, but also reforms to pension and social security systems. There is also advice to introduce more regressive tax changes, and other reforms like labor market reforms, you know, flexibilization of labor rights, which means that it’s harder to protect workers’ rights, including collective bargaining, the right to unionize, and so on. They basically aim to reduce subsidies that allow people to access certain services and they promote the privatization of public assets. As you know, the privatization of health care and education have profound impacts. ActionAid and Public Services International found that the cuts to public sector wage bill and specifically these sort of public budget cuts have a particularly bad impact on health and education services, but also on women and gender equality.
The budget cuts that I’m referring to are made with the implicit or explicit assumption that women will fill the gaps created in the services. Because of that, we cannot say that these policies are neutral or technical policies as the IMF wants people to think. They’re shaped by a certain ideology of how the world should work. In effect, the costs of these budget cuts are passed on to those who are least able to pay. That’s disproportionately women, non-binary and marginalized groups, especially in the Global South. They’re hit the hardest partly because of this enormous reliance on unpaid care and domestic work. On the one hand, women make a large part of the workforce in the services which are cut. On the other hand, they are also those who primarily provide care services, so when these are cut, women step in to fill the gaps.
But this is outside of the economic policy purview. Economic policymakers don’t see the cost of turning women into involuntary shock absorbers and de facto care providers. And this is documented over decades of research. It is not something new, but it is still largely ignored. The fact that the IMF isn’t assessing the impact of these policies on women leads to questions about its new Gender Mainstreaming Strategy.
There’s a triple disadvantage for women when public sector wage bill cuts occur and when public services are underfunded. Women disproportionately lose access to services, including health services. This is both because of cuts to specific services, but also because women might prioritize others over themselves when seeking care is needed. They are also among the first to lose opportunities for decent work, as they are more likely to work in the public sector, and they are also more likely to have lower wages in the public sector compared to men.
You’ll already know that where rates are concerned, 90% of nurses globally are women and 70% of health care workers globally are women. Cuts to health care services, and particularly public health care services, will have an impact for health care workers – mostly women – as well as women taking on extra rounds of unpaid care work at home. This can mean that women don’t have access to enough time for rest, to partake in education, or something else, but overall the combination of these factors leads to a particularly devastating effect.
Cuts to public sector budgets also mean a likelihood to restrict staff numbers. So basically, the restriction of public spending by the IMF means then that either staff has to be fired, or there might be cuts or freezes to wages, or there might be a restriction of the number of staff that can be recruited. That also has implications for how services are provided and who is eligible to use them. It might mean that less people can access health services. It reduces the access, but also the availability and the quality of public services and Public Services International has documented this across different services throughout the years.
And it’s not only about what happens in health care. Other services that benefit women outside of healthcare are affected too. This can include childcare and education. Within health, this could be sexual and reproductive health and rights or maternal health. These are cuts that are made because women are not represented in the policy space where some of these decisions are made, and it is exactly these decisions that limit women’s access to health care. But with the cuts, the need for health care doesn’t disappear. The responsibility for providing is simply transferred from the public to the private, and through entrenched social norms.
As I’ve already said, it’s women who pick this up. The estimate is that women take 76% of all unpaid care work, and this has risen throughout the pandemic. The percentage is likely much higher at the moment. That is the equivalent of 2 billion paid full time workers that are doing unpaid care work. These are all impacts documented throughout the report: public budget cuts lead to unpaid care work by women, and women are also forced to engage in precarious or underpaid care and health care work to compensate for the failure of public services.
PHD: Essentially, austerity measures mean less money for public health systems, which of course leads to obstacles to access. But they also have a particular impact on health workers – which is very important in this context, because the majority of health workers are, in fact, women. What happens to nurses, therapists, doctors, once the IMF comes to town?
RS: Women are the first to lose their jobs when these cuts are in place. This is the case around the world. Unfortunately, the case is also that they’re more likely to be employed through short term precarious contracts and in frontline health care roles. Since budget cuts lead to lack of staff, frontline health workers have to take on a lot more work.
For example, a study on Ecuador found that since 2018, the pressure to prioritize debt servicing over public services has impacted the health sector a great deal. Debt servicing is often used as a reason for the IMF’s to say that budget cuts need to happen. In Ecuador, you can see that as debt servicing increased as a share of the public budget since 2018, health sector spending has decreased. This was the case even during the COVID-19 pandemic, and Ecuador had very devastating numbers of deaths during COVID. For example, in 2022, the health budget was 8.6% of the state budget, while debt repayment was just under 15%. We’re seeing this trend of countries paying much more for debt than they are for health. A study by Bhumika Muchhala and Andrea Guillem on the impacts of austerity advice from the IMF in Ecuador found that cuts to the health sector led to layoffs from the public sector and wage freezes. This happened as seven out of 10 women reported being time poor, and 48% of these women reporting that unpaid care work was their main activity.
Our colleagues in Sierra Leone did research last year specifically on wage bill cuts for health workers, and they found that even though the wages for health workers increased in nominal terms from 2017 to 2021, they didn’t keep up with inflation; in real terms the wage decreased by 15%. In spite of that, Sierra Leone has been given a consistent budget steer or advice from the IMF to cut public sector wage bills with a target of the maximum of 6% of GDP.
Now, this advice is not given based on an assessment of healthcare needs in Sierra Leone or healthcare workers per inhabitant ratios. Sierra Leone is still trying to rebuild its health workforce since Ebola, as well as the impact of the COVID pandemic, so the needs are extensive. The government has increased the number of health workers by 5,000 and announced a 30% increase in salaries. But the restriction on wage bill cuts from the IMF is still in place. This likely means that there will be cuts in other public services outside of health care, so the negative impacts will still be there.
And then if we look at Nepal – Nepal needs to employ 67,000 permanent teachers to meet the government plans on education. At the same time, there are 40,000 teachers on temporary contracts. Our review of IMF documents shows that Nepal has been under pressure to cut and freeze public sector wages. The majority of these teachers are women, so again women are really shouldering many of these cuts.
PHD: We also have to consider that the world is facing a ghastly shortage of health workers. This is particularly felt in the Global South. But then many countries, like Ghana, have tens of thousands of unemployed nurses while also recording preoccupying shortages. What has this got to do with the IMF programs?
RS: In the context of Ghana, it’s important to understand that the IMF is now in its 17th agreement with Ghana. They are really not acknowledging the sort of recurring influence that the Fund is having on the reality of Ghana’s economy and health system. This is one of the things that ActionAid and Public Service International have been trying to point out. IMF’s advice isn’t just technical advice located in this particular moment, but it’s adding on top of years and years, if not decades, of restricted public spending. In Ghana, health spending has declined from just under 10% in 2016 to about 5% in 2020. The share of the public sector wage bill in total expenditure has been declining as well.
The government is paying back more on debt, so there is less room for employment. As a result, about 41,000 nurses who have been trained are not able to find work. Research by ActionAid, PSI and Education International has shown that in the case of 16 low income countries, it’s not just lending programs that cause this affect. We also have to consider IMF’s routine economic surveillance, which offer policy advice to most countries, and for lower income countries, the advice is quite coercive.
In the 15 countries we looked at between 2016 and 2020, public sector wage bill restrictions or cuts were equivalent to the amount needed for the recruitment of over 3 million nurses, teachers or other essential public workers. That would have added up to about almost $10 billion. In the context of the pandemic, this has had enormous implications for the ability of these countries to address the pandemic and to recover from it.
PHD: And do IMF recommendations have any effect on health care, or health workers shortages in high income countries?
RS: They do. The underinvestment both in training and recruitment of health workers all over the world has something to do with IMF’s advice in its surveillance. This is regular policy advice that doesn’t come with a specific program, but it advises the same kind of cuts. Research has found that about 85% of the world population will be living under a government that restricts public spending. But of course, when there aren’t enough health care workers in the Global North countries, health care workers come from the Global South, leaving even less health workers there.
This is sort of a part of the global care chain, but the impacts are particularly difficult where healthcare is concerned. Underspending in healthcare has multiple impacts on women everywhere, and particularly in the Global South, because of intersecting forms of discrimination through categories of class, race, sexual orientation.
PHD: Finally, do you think there is a way in which the IMF can actually make a difference to women’s lives?
RS: I think this is really important to talk about because the IMF’s Gender Mainstreaming Strategy is very general. It doesn’t look at the IMF’s own role in getting certain countries to the places that they are in now. In countries like Ghana or Zambia, where there’s a 16th program right now, the IMF has played a very clear role in defining how their economic policy looks. Because of that, the IMF should grapple with its own role much more honestly, and look particularly at how austerity advice actually impacts gender equality.
It really should look at how public sector wage bill cuts undermine investment in public services and the multiple impacts this has. That can be done in two ways. Firstly, by recognizing and accounting for women’s disproportionate unpaid care and domestic work, and acknowledging and committing to address how the IMF policy advice increases this burden, and thereby gender inequality.
Secondly – and this is the very bare minimum that the IMF, together with ministries of finance, should commit to doing – is committing to no harm through policy advice and not undermining gender equality. But again, as I said earlier, to do either of these things, they would have to do a systematic impact analysis of their economic policies. That could ensure that policy advisors are not doing harm to women or specific groups of women through the advice they are giving. The IMF already admitted that some of its policy advice can undermine women. A lot of IMF research, which again is not part of its policy advice, also acknowledges a lot of the things that our report finds.
But they’re not putting that into practice in their direct advice to countries. In a way, they’re talking the talk, but they’re not walking the walk. Feminist economists and women’s organizations have been presenting such evidence for over four decades, so even though the IMF must have acknowledged that there is a problem and has admitted they should look at alternative policy advice, we’re not seeing these changes systematically put in place.
It’s really important that they make a commitment to do no harm, and this assessment speaks to that. As Suman Giri Shrestha, one of the nursing officers that was interviewed by PSI in Nepal said, the IMF should put the health sector at the heart of public services, and stop pressuring the government to reduce funding in this sector.
People’s Health Dispatch is a fortnightly bulletin published by the People’s Health Movement and Peoples Dispatch. For more articles and subscription to People’s Health Dispatch, click here.