How Structural Adjustment Programs Impacts Women in the Philippines - Case Study Example

The Impact of Structural Adjustment Programs on Women in the Philippines: A Case Study Introduction Studies show that the structural adjustment policies (SAPs) undertaken by international financial institutions for indebted countries have actually created hardships in many countries. The reason is that in SAP programs, governments are required to deal with their balance of payments and external debt problems by implementing currency devaluation, austerity programs and tax increases that eventually harm rather than help indebted countries. The Philippines was one of the first two countries to undertake a SAP when the World Bank introduced loans in 1980 to support policy reforms instead of financing brick-and-mortar projects. At the time, the Philippines was one of the countries severely affected by the second oil price shock in 1979 and the onset of high global interest rates. Under the first SAP implemented for the Philippines in 1981, the objective was to reshape a largely protectionist regime under the Marcos dictatorship into an export-led economy through trade and financial liberalization and tight credit policy. However, subsequent events proved the SAP strategy wrong, as evidenced by the depreciation of the Philippine peso by 10 percent in 1983, double-digit inflation and unemployment, declining wages and the unimproved quality of exports due mainly to low production costs and cheap labor. During these years, political opposition to the martial law government of Marcos was escalating, which became a nationwide disturbance when top opposition leader Benigno Aquino was assassinated in 1984 by suspected Marcos hit men. This led to massive capital flight that forced Marcos to call a snap election in 1985, in which the widow of Aquino emerged victorious. As the GDP began to grow by a moderate 5.6 percent under the second IMF-WB program undertaken for the Aquino government (Lim & Montes, 2001), the economy suffered one setback after another as Marcos loyalists held disruptive rallies and renegade soldiers separately staged a series of military coups from 1987 to 1989. This paper examines how SAP failed the Philippines, specifically how and why its required policy reforms marginalized women in the Philippines in terms of meeting their rights to education, health and livelihood. 2. How SAP Worked Against Philippine Women The SAP requirement for an export-led strategy of economic growth created shifts in the use of land and other resources, reorganized production processes, and changed production relations as well as existing social institutions (Sparr, 1994). This was generally how SAP worked to the disadvantage of Philippine women. On land use, for example, one of the main thrusts of SAP is to remove subsidies from agricultural production intended for local consumption and to re-channel the funds instead to the production of cash crops for the export market (Sparr, 1994). Rural women in the Philippines augment the meager income of their farmer-husbands by engaging in the backyard production of crops that can be sold in the local market. Moreover, women share farm work with their men especially in seeding and harvesting. When the incentives for growing crops with a ready market were taken away, the women lost an important source of income to the detriment of her family (Elson, 1995). The problem was that government promoted export production although world prices were extremely low (Lim & Montes, 2001). In the Philippines, land was transferred from the traditional crops of rice and corn to the production of sugar cane, bananas and pineapples with a concomitant increase in the size of holdings and greater mechanization but also a rise in the number of landless households (Elson, 1995). The main result was to further marginalize women in crop production as they are largely excluded from sugar cultivation. Rural women in the Philippines farm for home production and the local markets and rarely is it done for the export market (Lim & Montes, 2001). The loss of smallholdings meant that many women could no longer rely on subsistence crops, thus disrupting their traditional role in maintaining the balance of their household, which is the basic economic unit in the Philippine countryside (Sparr, 1994). Apart from the elimination of farm subsidies, an intensive export promotion program also meant discarding price controls to make exports competitive and imports cheaper (Lim & Montes, 2001). This threatened the very existence of local industries producing for the domestic market, which relied heavily on women workers (Sparr, 1994). In addition, creating a market economy out of the previously protected Philippine economy meant developing export-oriented industries and discouraging those seeking to compete with imports. This required a devaluation of the Philippine currency, which triggered a steep decline in real wages and living standards of the working class. In urban areas, this caused adverse effects on women workers, who dominate the workforce in manufacturing, including traditional handicraft or cottage industries (Cagatay & Ozler, 1995). 3. Why SAP Harmed Philippine Women When the classic IMF program of tight liquidity and credit constriction was in place in the Philippines, many of the key industries could not obtain working capital leading to the closure of firms and work stoppages or slowdowns (Ball, 2001). The collapse of small industries was not a concern of SAP, which was strategically focused on the creation and maintenance of large-scale projects (Stewart, 1991). Thus, the elimination of price controls and market support programs was compounded by the unavailability of credit for small-scale enterprises, which were the places of employment for women. This caused an overall decline in wages and money income in urban areas that have forced women to increase household work and to seek outside employment or try to start a small vending business (Sparr, 1994). In the Philippines, a mere 5 percent of the government budgets had been allotted to gender-related programs and projects (Isbister, 2006). This translates to gender discrimination, unequal access to resources and opportunities, violence, lack of basic services, paltry representation in politics and business, and power imbalance that characterize the personal relationships between men and women (Lockwood, 2006). The stabilization policies under SAP tended to depress real wages and reduce the share of health and education in government expenditures. The devaluation and price decontrol measures associated with SAP always affect wages negatively, and the need to service foreign debt ate up 19 percent of the Philippine budgets, which left little money for health and education. The Philippines was one of 16 countries out of 34 with SAPs that experienced cuts in health and education expenditure per capita in 1985-86 (Stewart, 1991). Education is an important determinant of women's economic activity and health status but SAP policies have been harsh on female educational enrolment (Buchmann, 1996). IMF-imposed budget restrictions undercut government's ability to sustain infrastructure development in such crucial areas as health, education, security and privatization of strategically vital national resources. This reflected in government expenditures for health and education, which fell from 5.12 percent of GDP in 1983 to 4.7 percent in 1985. On a per capita basis, the drop in health expenditure was 50 percent for each person, and 19 percent per student in education (Stewart, 1991). 4. Case Study Case A - Maria was already 15 years old in 1981 when she finished elementary school because she skipped school for two years. All her education would stop there because it was the norm in the rural society in which she moved that female children need not receive high education as much as the male progenies. So Maria, the eldest of five children and one of two girls in the family, set aside her dream of pursuing high school studies in favor of her three younger brothers. It was certain that her younger sister would not also go beyond Grade 6. The father was a small coconut farmer whose earnings from copra production could barely support the family of seven so sending even his three sons to high school was a struggle. The problem was complicated by the fact that in those days, there was as yet no free education program for grade schools in the Philippines and the formal school system was only available in municipalities. The elementary and secondary schools were located only in the towns, such that for those living in barrios like Maria's family they had to travel a long way to the town to study. Maria says that were it not for these difficulties, she would have persuaded her father to at least send her to the municipal high school too. By the time Maria turned 16, she was married to a man who was barely educated as she and lived as a carpenter. By 1990, four children had come out of this marriage, with Maria giving birth almost every two years. Survival was difficult for a family this size in terms of income and health. They hardly eat three square meals a day and often they eat mostly root crops, which Maria grew in the yard. When any member of the family got sick, they used herbal medicine because they could not afford a doctor, and even if they could no health center was yet established in the barrio. Case B - The case of Alicia was worse than that of Maria. Her parents, who made a living as caretakers of a farm for an absentee landlord, told her to leave school when she was only in grade 3. Thus, she could hardly read and write. At age 14, Alicia was sent by her parents to the town to work as maid for a rich family in 1984. Two years later, she came home to her parents in tears saying her male employer impregnated her against her will. For lack of resources and influence, the family kept Alicia's fate to themselves. Maria herself gave birth to a girl and stayed with her parents as a single parent. To help her parents support her child, Alicia was forced to work as a hospitality girl at one of the nightclubs in town, which was about 20 miles away from her barrio. 2. Urban Women Case C - Richelle grew up in one of the squatter areas built along the tracks of the Philippine National Railways, which runs from the heart of Manila to the southern provinces of Cavite, Laguna, Batangas and Bicol. She married a man from the same place in 1985 and a cardboard house of their own that shook every time the trains passed by. Her husband worked as janitor for a company two jeepney rides away and she tried to augment his income by working as laundry women to families on the other side of the railroad tracks. Earnings from this part-time laundry service was barely enough and irregular so Richelle and her family, which consisted of 3 children, often went to sleep on an empty stomach. In 1990, she applied for an overseas job as domestic helper so she saved part of the salary of her husband and her income from laundry work. In the process, they endured hunger. However, after paying the recruitment fee of 10,000 pesos ($495 in today's rate), the recruiter disappeared and Richelle realized that she had been victimized by an illegal recruiter, whose numbers had increased to such an extent that in the 1990s, the government established the Philippine Overseas Employment Agency to regulate and license recruitment activities. Case D - Diana was a transplanted provincial girl who left her hometown in 1980 when she was 17 after she was attracted by stories that good job opportunities abound in the city. She finished secondary school but soon found out that a high school diploma matters little in a job search in Manila, where the job market was highly competitive. At first, she found work as maid to a rich family through the intercession of an employment agency that specializes in this type of job placement. Diana liked the job and her employers, but she left when she decided to get married to a man who worked as a cab driver. The family established domicile in a rented apartment in the outskirts of Manila. As simple housewife, Diana learned that her husband's earnings needed to be augmented for them to spend for all their needs. So she decided to become a street vendor, selling anything from candies to cigarettes. Conclusion The SAP prescribed by IMF-WB for the Philippines was an export-led strategy that altered the use of land and other resources, reorganized production processes, and changed production relations as well as existing social institutions (Lim & Montes, 2001; Grindle, 1999). This caused an overall decline in wages and money income that have forced women in urban areas to increase household work and to seek outside employment or try to start a small vending business. In the rural areas, women lost their source of livelihood when farm production shifted to activities that required intensive male labor, price support and subsidies for subsistence crops were withdrawn, and social services became scarce. The stories of hardship of Alicia, Maria, Diana and Richelle are by no means isolated. Lack of educational opportunity is at the root of the problem, which happened when government spending for education became scarce because the external debt had to be repaid on time and in the exact amount, not to mention the amounts of money that went to individuals and companies favored by the Marcos dictatorship. It does not help that for both low and middle-income families in the Philippines, women's education takes a backseat to the education of their male siblings. As a result, Alicia and Diana were forced to work as maids and forever resigned to the bondage of poverty. Women in the Philippines do not enjoy other rights entitled to them, such as the right to health, to own property and the right to fair wages. Thus, Maria grew root crops to feed her family, Alicia had to work as nightclub hostess, Richelle had to sell her services as laundry women, and Diana had to sell knick-knacks on the street. 5. Bibliography: 1) Buchmann, C. (1996). "The Debt Crises, Structural Adjustment and Women's Education." International Journal of Comparative Study, Vol. 27, No. 1-2. 2) Cagatay, N. & Ozler, S. (1995). "Feminization of the Labor Force: The Effects of Long-Term Development and Structural Adjustment." World Development, Vol. 23, No. 11. 3) Elson, D. (1995). "Male Bias in the Development Process." Manchester UP, New York. 4) Grindle, M.S. (1999). "Public Choices and Policy Changes: The Political Economics of Reform in Developing Countries." John Hopkins University Press. 5) Isbister, J. (2006). "Promises not Kept: Poverty and the Betrayal of Third World Development." 7th ed., Kumarian Press. 6) Lim, J.Y. & Montes, M.F. (2001). "Structural Adjustment Program after Structural Adjustment Program but Why Still no Development in the Philippines" Paper presented at the Asian Economic Panel Meeting, 25-26 Oct. 2001, Seoul. 7) Lockwood, B.B. (2006). "Women's Rights: A Human Rights Quarterly Reader." John Hopkins University Press. 8) Sparr, P. (1994). "Mortgaging Women's Lives: Feminist Critiques of SAP." Zed Books. 9) Stewart, F. (1991). "The Many Faces of Adjustment." World Development, Vol. 19, No. 12. 10) Woods, N. (2003). "Unelected Government: Making the IMF and World Bank More Accountable." Brookings Review, Vol. 21, No. 2. Read More