COVID-19: Economic consequences for women

The novel Corona Virus Disease that was first detected in China in Nov-2019, has spread to 216 countries. As of May 14, 2020 status report by World Health Organization, over 4.2 million cases have been reported worldwide with 290,000 plus deaths. The COVID-19 pandemic has wreaked havoc on not only the public health systems but also the global economy and the livelihoods of many.

While figures might indicate that more men are dying from the disease, research has also shown that women are the vulnerable group in a crisis and are impacted by epidemics and health challenges differently. The pandemic is magnifying inequalities and discrimination faced by women across the world in not just the health sector but in their economic empowerment as well. A point of weakness in many countries is that women participation in the labour force is largely based on informal and temporary employment, which makes them even more susceptible to the distortions happening in the labour markets due to the coronavirus outbreak.

The impact of this is huge for Pakistan that already has weak socioeconomic development indicators and existing gender inequality - threatening livelihoods of women, majority of whom are part of the informal and non-essential sectors. Women make up to 48.8 percent of the total population, but gender inequality persists and stark disparity is demonstrated in female literacy, female labour force participation, and female financial inclusion among other socioeconomic indicators on women.

The country’s position on Global Gender Gap Index for 2020 is among the last three - only ahead of Iraq and Yemen. In terms of education, 50 percent of the female population is literate versus 72.5 percent of males. Refined labour force participation for women is around 20 percent as against 68 percent for men according to the latest Labour Force Survey; their contribution to GDP in terms of paid work is the lowest in Asia Pacific at 11 percent. Moreover, of the 100 million unbanked population in the country, majority are women. World Bank Global Findex Database shows that only 6 percent of women have formal bank accounts in Pakistan.

The Ministry of Human Rights, in collaboration with UN Women and National Commission on the Status of Women (NSCW) has released a policy paper on the gender impact of COVID-19 in Pakistan, which highlights the existing multidimensional gender inequalities and vulnerabilities of women and girls to COVID-19 transmission and impact, and provides recommendations to mitigate risks and prevent the widening of the existing gender gap.

Where the policy brief takes stock of gender equalities across various thematic areas such as education, health gender based violence etc., the section on the impact on labour force participation and financial empowerment shows that most women are part of the informal low wage market, which are most adversely affected in case of health emergencies such as COVID-19. The policy brief warned of layoff of many women working for small and medium business as employers find it difficult to continue paying wages. The brief also pointed out that the 12 million Home-based Workers (HBWs) who earn around Rs3000-4000 per months will face multidimensional issues such as low income security, absence of social protection and highest economic vulnerability in times of crisis. It also cautioned that the financial empowerment of women who have been the target market for microfinance and agricultural loans will face liquidity and repayment issues as they are less fluid in terms of cash flows and savings. This may lead to penalties and reduced access to finance in the future.

A recent survey by Oraan Tech Private Limited, which is a platform for digitizing ROSCAs (Committees) also shows how women are being impacted by COVID-19. The survey was conducted across Karachi, Lahore and Islamabad where 400 women were reached through digital FB communities for assessing the impact of COVID-19 on their business and/or salaries. Majority of the respondents belonged to the food, education, fashion beauty, and tech industries.

The ongoing health emergency has severely impacted the financial independence and empowerment of women. Majority of the women reached for the survey were scared of their current and future financial situation and had no idea how to manage the finances during the ongoing crisis and save their businesses.

The survey results show that over 53 percent of the women lost income due to lockdowns and businesses being on hold. These women mostly represented food and education related businesses, salon and beauty services, and online stores for clothing/accessories. Of those that are employed, 25 percent have faced a cut in salaries belonging to admin, finance and HR functions. Unfortunately, 17.25 percent respondents working in research, admin, human resource and marketing functions or as designers lost their jobs to COVID-19 pandemic. 4 percent women respondents have remained unaffected and belonged to the tech and content writing category.

Most of the business owners in the survey were of the view that they need funding to remain operational, and those that have been part of Oraan committees want early payouts to pay the employees. They generally have little to no savings except for the committees. Another key insight from the survey was that women who did not have bank accounts had no knowledge about opening bank accounts online and hence were facing difficulty in making payments during the lockdown. They have also faced fraud and malpractices while using digital mobile money where agents did not transfer the money.

These results are reflective of the hardships women are facing economically during these pressing times. Talking to BR Research, Co-founder Oraan, Halima urged the need to urgently recognize the gender differences in accessibility of financial resources, vulnerability, and economic resilience when designing relief and recovery responses to the pandemic, which would otherwise risk financial re-exclusion of women. Moreover, there is a need to increase the access to information and services for women as many of them (66 percent) had no idea what kind of help, if any, was available to them to sustain.

Unconditional cash transfer is a key measure that policy makers around the world have recommended as a social intervention assistance measure to support women and the vulnerable group. The Ehsaas program and the Prime Minister’s Relief Fund for COVID-19 is hoped to mitigate some impact of the outbreak including supporting women to recover and build resilience for future shocks.

Moreover, women are mostly employed in low wage, micro –small-and medium enterprise level in the informal sector and usually microfinance customers. Rescheduling payments, and new loans at lower interest are also among some relief measure that the world is looking at.