Opportunities that have been created by the WTO membership can not be automatically transmitted to the society, particularly in favor of disadvantaged group like women

– By Shiv Raj Bhatt

Shiv Raj Bhatt Despite significant achievements in socio-economic front in the past five decades under planned development efforts, women’s status is still far behind that of men in Nepal. In fact, developments that took place in the country have not rightly touched the life of many disadvantaged groups of people, including women, which constitute half of Nepal’s population and a visible majority of the poor. As a result, women’s participation in the development process, representation in decision-making and ownership of productive resources are still far behind men. For example, men own 94.9 percent of homes in Nepal while only 5.1 percent belongs to women. Women’s ownership of land is only 10.8 percent, and in the case of agricultural land, it is only 4.4 percent. In the 205-member House of Representatives, only 12 are women. Similarly, women’s participation in civil service is around 8 percent while only 4 percent of women hold post at the policy formulation level in civil services.

In such a critical situation, Nepal acceded to the World Trade Organization (WTO) on 23 April 2004. It is anticipated that as an instrument of globalization and trade liberalization, the membership of Nepal to this rule based trading system can significantly impact the lives of both men and women. WTO membership may be instrumental in promoting human development and gender equity if it facilitates the process of equitable broad-based growth, creates employment opportunities especially for women and the poor, help broadens production and export base, and facilitates transfer of technology and human resources development. However, it may further worsen the situation by widening gaps between various segments of the society, including men and women, if proper policy measures can not be undertaken in time. It should be noted that opportunities that have been created by the membership can not be automatically transmitted to the society, particularly in favor of disadvantaged group like women.

Globalization and women: The link

The mainstream trade theory holds the view that production specialization, according to each nation’s comparative advantage, typically leads to a more efficient allocation of resources in the world economy and consequently to higher levels of output and growth in all countries. Accelerated growth, in turn will promote national development and reduce poverty. Moreover, it is argued that in the process of opening up to trade, labour abundant countries like Nepal will experience job creation and relative wage of unskilled labour will rise over time. This job creation will largely benefit women, since women dominate labour intensive industries. In addition, because of increased competition in the local market due to a more open trade regime, companies can no longer afford to discriminate against women by paying a premium to male workers. Therefore, it can be said that as an instrument of globalization and liberalization, Nepal’s WTO membership can benefit both men and women.

It may be right to say that WTO membership has created opportunities, but only for those who have the capacity to produce quality products at competitive price and are able to sell their competitive products in world markets. To produce competitive products, an entrepreneur need access to various types of resources, physical (like land, capital, and access to credit) and labour (human capabilities that mostly depend on health and educational status). Unfortunately, Nepalese women lack all these resources.
However, economists investigating the complex relationship between gender inequalities and trade liberalization find that trade liberalization has had mixed results for gender outcomes. They have argued that much of women’s trade related gains in employment have occurred in state-promoted export processing zones (EPZs) or Special Economic Zones (SEZs), which are exempted from local labour laws, and in the informal sector, where work is characterized by long hours, insecure employment, unhealthy work conditions, low wages and often sexual harassment. More importantly, in a predominately agricultural economy like Nepal, lack of women’s access to various resources like land, credit and knowledge not only hinder the ability of women to take advantage of new opportunities created by trade liberalization, but can also constrain output response and export capacity of the whole economy.

In this context, it may be right to say that WTO membership has created opportunities, but only for those who have the capacity to produce quality products at competitive price and are able to sell their competitive products in world markets. To produce competitive products, an entrepreneur need access to various types of resources, physical (like land, capital, and access to credit) and labour (human capabilities that mostly depend on health and educational status). Unfortunately, Nepalese women lack all these resources. Thus the promises that have been brought up by the membership are meaningless for those who do not have such capacities. The people that constitute majority of such people in Nepal include rural communities and poor women, as they have very weak connection with outer economies, even within the national economy. Therefore, in a situation of large socio-economic differences between men and women in Nepal, it can be said that consequences of trade liberalization, resulted by Nepal’s WTO membership, on men and women would be different, not equally favorable for women.

The way forward

It is widely accepted that trade liberalization accompanied by passive economic policy may fail to expand human choices and contribute to increasing income and gender inequalities. The proper policy intervention, with active support of private sector, civil society, NGOs, INGOs and media, can affect the outcomes of trade liberalization in women’s favor. Any support and action — that enhance women’s capacities, increases their access to productive resources and increases their participation in decision making process– can contribute positively in this regard. Therefore, it is imperative to build a national consensus of all the stakeholders, prepare an action plan and implement active policy interventions rather than passively wait for the markets to deliver automatic benefits. If all the stakeholders took proper and timely actions, the opportunities of WTO membership can be translated into tangible, widespread, long lasting and equitable benefits for the Nepalese women.

Bhatt is a Consultant Economist at SAWTEE—a Kathmandu-based think tank and can be reached at [email protected] This article is based on authors’ paper, written jointly with Ekta Bhattarai and published in the July-September issue of the South Asian Journal, published by South Asian Free Media Association- SAFMA.

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