If Oil is Gold, No Doubt that Diamonds are Woman's Best Friend
By Rishika Singh, 7/14/2020
‘Globally, over 2.7 billion women are legally restricted from having the same choice of jobs as men. Of 189 economies assessed in 2018, 104 economies still have laws preventing women from working in specific jobs, 59 economies have no laws on sexual harassment in the workplace, and in 18 economies, husbands can legally prevent their wives from working.’
- U.N. Analysis in “Facts and Figures: Economic Empowerment”
Economic prosperity measurements remain oblivious to the extent of women's upliftment, but the converse does not hold true. Economic shocks, booms, and busts, have a considerable effect on the social and economic standing of women, who more often than not bear the burden of the negative aspects associated with each.
The ‘ Dutch disease ‘ signifies this paradox of the unintended consequence of good news. First appearing in The Economist, 1977, the term primarily refers to the unexpected outcome of a new discovery/invention on the broader economy of a nation. The publication analyzed the discovery of large natural gas reserves in the North Sea of Netherlands and hence, giving the paradox its name. Contrary to the conjecture of economic flourishment, the massive influx of capital in the country following this discovery led to a sharp rise in the value of the Dutch currency, making Dutch exports of all non-oil products less competitive in the world market. Unemployment rose from 1.1% to 5.1%, and capital investment in the country dropped.
The unearthing of such invaluable resources are largely considered to be positives for the economic performance of a nation; however, we may have been too quick in our judgment of this idea. Existing studies largely focus on short term dynamics of the overall economy and on male-centric industrial jobs, but the effects on women and their economic standing are less known, rendering these studies incomplete. Women should be implicitly included in such studies not only because they, much like their male counterparts, form part of the economy but also due to the much greater havoc unleashed on them in the aftermath of this ‘resource curse’.
Oil, for one, has presented a slippery slope for the economic liberation of women. According to the World Bank, the oil economies of the Gulf states have, on average, just a 22% female labor force participation rate. In nearby North Africa, for example, oil-poor Morocco had 26% female labor force participation in 2011, in comparison to 15% in oil-rich Algeria. In the OxCarre Research paper, Women & Resource Windfall, the authors hypothesize that the effects of the oil boom should depend on the substitutability of men and women in the labour markets. The paper’s findings back the hypothesis- women in high oil labour markets tended to exit full-time jobs following the boom, while many inactive men joined the labour force. Moreover, single women in these regions did not earn less after the economic boom, while married women saw significant reductions in their individual income, even though their overall household income increased.
- U.N. Analysis in “Facts and Figures: Economic Empowerment”
Economic prosperity measurements remain oblivious to the extent of women's upliftment, but the converse does not hold true. Economic shocks, booms, and busts, have a considerable effect on the social and economic standing of women, who more often than not bear the burden of the negative aspects associated with each.
The ‘ Dutch disease ‘ signifies this paradox of the unintended consequence of good news. First appearing in The Economist, 1977, the term primarily refers to the unexpected outcome of a new discovery/invention on the broader economy of a nation. The publication analyzed the discovery of large natural gas reserves in the North Sea of Netherlands and hence, giving the paradox its name. Contrary to the conjecture of economic flourishment, the massive influx of capital in the country following this discovery led to a sharp rise in the value of the Dutch currency, making Dutch exports of all non-oil products less competitive in the world market. Unemployment rose from 1.1% to 5.1%, and capital investment in the country dropped.
The unearthing of such invaluable resources are largely considered to be positives for the economic performance of a nation; however, we may have been too quick in our judgment of this idea. Existing studies largely focus on short term dynamics of the overall economy and on male-centric industrial jobs, but the effects on women and their economic standing are less known, rendering these studies incomplete. Women should be implicitly included in such studies not only because they, much like their male counterparts, form part of the economy but also due to the much greater havoc unleashed on them in the aftermath of this ‘resource curse’.
Oil, for one, has presented a slippery slope for the economic liberation of women. According to the World Bank, the oil economies of the Gulf states have, on average, just a 22% female labor force participation rate. In nearby North Africa, for example, oil-poor Morocco had 26% female labor force participation in 2011, in comparison to 15% in oil-rich Algeria. In the OxCarre Research paper, Women & Resource Windfall, the authors hypothesize that the effects of the oil boom should depend on the substitutability of men and women in the labour markets. The paper’s findings back the hypothesis- women in high oil labour markets tended to exit full-time jobs following the boom, while many inactive men joined the labour force. Moreover, single women in these regions did not earn less after the economic boom, while married women saw significant reductions in their individual income, even though their overall household income increased.
Source: American Political Science Review, Vol. 102, No. 1 February 2008
This significant reduction in the female to male income ratio within a household can be attributed to the aforementioned “Dutch disease”. Women around the world have historically entered the labor force through low-wage, export-oriented industries, particularly agriculture and the garment and textile sectors, in which men have no natural strength advantage and there is little required in the way of specialized skills and training, this can particularly be traced back to world wars when men were called for wars while women were left behind to fend for their families. ‘To this day, more than 80% of global garment and textile employees are women.
Yet these are the industries most affected by the dynamics of the “Dutch Disease”, as the Global Observatory reports. These industries bear the brunt of appreciation-induced reduction in export and subsequently lay off workers, most of whom come from the women workforce. A second explanation is a return to traditional roles, wherein women are expected to look after the household & men are the sole breadwinners, as a response to an increase in income of men shifting to oil-related businesses. It directly adversely affects the fertility rate, education level & political presence of women. As the world was nearing a move away from oil-based economies due to the uncertainty of demand, the destabilizing effect of prices, and resource wars that it endorses, a pandemic hit it to reverse the course of the discussion. While April observed a cut in oil supplies, directed largely by the Organization of Petroleum Exporting Countries (OPEC), with regard to a slump in demand amidst a global lockdown, analysts predict major producers will ease supply cuts as regulations soften. Fresh figures arrive from The International Energy Agency (IEA) as it adjusts its 2020 oil demand forecast to relaxations of Covid-19 related curbs increased fuel demand. With precaution being the new norm, carpooling, and public transportation participation will suffer a dip further pushing the demand, making the ‘male dominating, industry crushing’ business all the more profitable. The agency revised its forecast to 92.1 million barrels per day (BPD), an increase of 400,000 BPD from its earlier outlook last month. What does that say about gender equality in economies of the world? Will the oil businesses open its door to females as more demand generated avenues crop up or will the world see a backward spiraling of progression? The former envisions a system where shareholding capacities are fairly distributed between genders, sustaining a much stronger, fairer economy- As Christine Lagarde postulated after the global financial crisis of ‘08, ‘ if it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today.’
Yet these are the industries most affected by the dynamics of the “Dutch Disease”, as the Global Observatory reports. These industries bear the brunt of appreciation-induced reduction in export and subsequently lay off workers, most of whom come from the women workforce. A second explanation is a return to traditional roles, wherein women are expected to look after the household & men are the sole breadwinners, as a response to an increase in income of men shifting to oil-related businesses. It directly adversely affects the fertility rate, education level & political presence of women. As the world was nearing a move away from oil-based economies due to the uncertainty of demand, the destabilizing effect of prices, and resource wars that it endorses, a pandemic hit it to reverse the course of the discussion. While April observed a cut in oil supplies, directed largely by the Organization of Petroleum Exporting Countries (OPEC), with regard to a slump in demand amidst a global lockdown, analysts predict major producers will ease supply cuts as regulations soften. Fresh figures arrive from The International Energy Agency (IEA) as it adjusts its 2020 oil demand forecast to relaxations of Covid-19 related curbs increased fuel demand. With precaution being the new norm, carpooling, and public transportation participation will suffer a dip further pushing the demand, making the ‘male dominating, industry crushing’ business all the more profitable. The agency revised its forecast to 92.1 million barrels per day (BPD), an increase of 400,000 BPD from its earlier outlook last month. What does that say about gender equality in economies of the world? Will the oil businesses open its door to females as more demand generated avenues crop up or will the world see a backward spiraling of progression? The former envisions a system where shareholding capacities are fairly distributed between genders, sustaining a much stronger, fairer economy- As Christine Lagarde postulated after the global financial crisis of ‘08, ‘ if it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today.’
https://theglobalobservatory.org/2017/06/middle-east-gender-saudi-arabia-vision-2030/ https://data.worldbank.org/indicator/SL.TLF.CACT.FE.ZS?end=2016&locations=1A&start=1990 &view https://www.investopedia.com/terms/d/dutchdisease.asp https://www.unwomen.org/en/what-we-do/economic-empowerment/facts-and-figures https://www.economics.ox.ac.uk/materials/working_papers/5246/wpoilwomen20191220.pdf https://www.bbc.com/news/business-53386423 https://www.offshore-technology.com/news/coronavirus-timeline/ https://www.theguardian.com/business/2018/sep/05/if-it-was-lehman-sisters-it-would-be-a-di fferent-world-christine-lagarde https://www.sscnet.ucla.edu/polisci/faculty/ross/papers/articles/Oil%20Islam%20and%20Wo men%20-%20apsr%20final.pdf
