International Financial Architecture:
- A View from the Kitchen -
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
International Financial Architecture
- structure of the presentation -
1) Key words
2) Structure of the text
3) Key points & methodology
4) Conclusion
5) Discussion
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
International Financial Architecture
- Key words - financial & economic architecture
- Asian financial crisis
- inequality
- deflationary bias, male breadwinner bias, privatisation bias
- social justice
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
International Financial Architecture
- structure of the text -very dense text, divided into 5 sections, equal in volume
1) Changes in the international financial architecture
2) The Asian financial crisis and its implications
3) The IMF‘s and World Bank‘s policies following the crisis and alternative
approaches
4) Biases which would make any new economic architecture insecure for
women
5) Overcoming the tension between social and financial goals
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
1) Changes in the international financial architecture
- Brief description of IMF and World Bank as the core of the international
financial architecture and their becoming dwarfed by international banks
during the process of liberalisation
- Rising importance of international banks: falling official capital inflows to
developing countries and explosing private capital flows
- Growing inequality between rich ‚rentier‘ households and a majority of poor
indepted households
- Trans-National-Concerns‘ bargaining power
- International labour market liberalisation limping after financial market
liberalisation
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
1) Changes in the international financial architecture
- Methodology Summary of the period of liberalisation of international
financial markets and its impact
Metaphores: The „dealing room“ has become
„decontrolled“ for the benefit of international banks and big
rentiers
Creation of a „surreal financial architecture“ with
completely different time horizons for the „kitchen“ and the
„dealing room“
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
2) The Asian financial crisis and its implications
-Risk taking, herd behaviour, drop in assets prices leading to the collapse of
credit markets, with gouvernments‘ and IFIs‘ intervention and bailing-out
probably making matters worse.
-High costs not only in terms of GDP: particularly women increase their
amount of (paid/ unpaid/ informal) work in order to provide substitutes for
public services and other goods which are no longer affordable.
-Attemps to manage the Asian financial crisis failed, the IMF was
denounced of aggravating the situation through its policy.
-In Indonesia and the Phillipines women‘s paid and unpaid work increased,
whereas in South Korea, more women than men lost their jobs.
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
2) The Asian financial crisis and its implications
- Methodology Very brief description of causes for and the consequences of
financial crisis and the Asian financial crisis in particular
Reference made to different authors, especially „heterodox
economists“ such as Spotton, Singh, Zammit and to Stiglitz‘ criticism
of the IMF
Quoting from Indonesian, Philippine and South Korean statistics
Korean slogan „Get Your Husband Energized“ seems absurd
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
3) The IMF‘s and World Bank‘s policies following
the crisis and alternative approaches
-Social policy (the introduction of safety nets) should complete financial policy.
-World Bank and IMF begin to accept this, but still act on the neo-liberal
assumption that economic growth, restricted public expenditures and financial
liberalisation are the only strategies to combat poverty efficiently.
-Heterodox economists: Macroeconomic policies resulting from financial
liberalisation keep employment and output below their potential.
*Eatwell/Taylor: Creation of a World Financial Authority to ensure
transparency and acccountability of IMF and World Bank. Lacks gender issue.
*Singh/Zammit: Consider full employment as the best safety net.
„The right to control capital flows must be the linchpin of any reform of the
international financial system (...)“.
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
3) The IMF‘s and World Bank‘s policies following
the crisis and alternative approaches
- Methodology -
Confrontation of IMF‘s and World Bank‘s strategies with
alternative proposals
IMF exposed as being too optimistic:
„The IMF line of analysis shows great confidence in the speedy restoration
of a sustainable long-run growth path, but we are now in a period of global
recession“ (p.31)
Quotation of hetereodox economists – normative point of
view
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
4) Biases which would make any new economic
architecture insecure for women
-Taking over the approach of Singh/Zammit, the following three biases should be
avoided:
1)Deflationary bias: Employment and growth stay below their potential. The negative
effects of policies which aim at attracting private capital inflows outweigh the
benefits of the extra finance.
2)‘Male breadwinner‘ bias: Public policies often consider women as inferior workers
with fewer rights and as dependents of men. „This suggests that a target of full
employment needs to be supplemented by a target of decent jobs on comparable
terms for both men and women, equally family friendly for both.“ (p. 33)
3)Privatisation bias: Private provision is judged more efficient than public provision,
but privatisation leads to increasing stratification in quality and access to services.
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
4) Biases which would make any new economic
architecture insecure for women
- Methodology -
Warning about the biases
Normative approach, following the line of Singh/Zammit
„(…) We need a target of universal entitlement to basic
services and benefits for women and men.“
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
5) Overcoming the tension between social and financial goals
Openness of financial markets
actors (with
exit option)
Offshore IFI´s
Rentier HH
actors‘ interests
-Minmise tax payments
-Keep interest rates high
-Keep inflation low
Privatisation bias
Growth of financial intermediaries
Even more pressures to privatise
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
Deflationary bias
5) Overcoming the tension between social and financial goals
- Methodology -
 pessimistic tone
The few attemps of reform, designed mainly by the G7,
have rather served the interests of the investors than those of
the poor.
Some positive examples, however
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
International Financial Architecture
- Conclusion -
-very dense text
-directed at people who are well versed in the subject
-structure can easily be followed
(decontrol of the dealing room  risks downloaded to the kitchen  need
of remedies, social policy  learn the lessons  difficult but not
impossible mission)
-convincing argument
-follows heterodox economists
-global recession?
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
Discussion points
 How can we create spaces, „accessible from the kitchen“, for public
dialogues on priorities and alternatives? What kind of spaces?
 What incentives could we imagine to motivate financial institutions to engage
in dialogue with social interests? (Their share of financial instruments as starting
point?)
Glimmer of hope or illusion:
*Canadian Federal Budget exercise?
*Gender budget initiatives?
*Ethical investment fonds?
*Tobin tax?
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -
Thank you
for your attention!
Gender Justice and Financial Liberalisation
- IfPol: 17.12.2004, Helen Radeke -