Presentation on theme: "Ranja Sengupta Third World Network"— Presentation transcript:
1Dynamics of Investment Liberalisation in India: Looking through a Gender Lens Ranja SenguptaThird World Network'The Politics and Economics of FDI through a Gender Lens' Gender and Economic Policy (GEP) Discussion ForumISST-HBF9th April, 2013, New Delhi
2FDI and DevelopmentForeign Direct Investment, increasingly important, preferred to short term capital flows.Positive impacts:Conduit for transfer of technology and human skillsNew ideas and innovationSources of capital, growth and employment: if addition to stockCatalyst for development (when right linkages are present in sufficient amount)Value added/product upgrading and diversification of production and export baseCrowding in of domestic investmentPay higher wages than comparable local firms
3FDI and Development Concerns: Restrictive business practices of TNCs (advere transfer of technology agreement between affiliate and parent co)distortive effect of transfer pricing (to avoid tax obligations) on government budgetingCrowding out domestic investmentNegative impact of foreign affiliates on SMEsFDI in lab intensive segments can push out workers.Inequalising: does not often go to backward areas
4FDI and Development: Global Experience OverallSome analysts say (e.g. Braunstein) no clear link between FDI and development esp. in long runPolicy context is very important.Conditions on FDI (e.g. labour content, or in which sectors)+ domestic policy environment.Example: Labour laws, social protection, govt. provision of essential services,
5Gender and FDI: Experience and Issues In semi-industrialised countries, benefit in employment for women from FDIIn developing countries, as industries move up value chain, effect is less positiveHigh share of female employment in TNCs particularly for export intensive assembly and manufacturingHowever, there are often issues about the quality of employment (wages, the working conditions, contribution to knowledge and skill upgrade) of male and female workers and managers. Ex: Bangladesh. Mexican Maquiladoras.Impact on wages, work conditions may not be sustained in the long run
6Gender and FDI: Experience and issues Employment decline in agr, increase in manu + servicesBut women often limited to low skill segments.SMEs and women entrepreneurs? Does FDI drive out SMEs?FDI in natural resources including land: women are linked closelyFDI in services: Employment and access. Latter very important for long term opportunities for women. Each reinforces the other’s impact.
7India: Framework of Investment Liberalisation Autonomous (automatic/approval route, FDI caps, PRs)WTO : TRIMS with limited scope, invt under Singapore IssuesBilateral Investment Treaties (BITs)/ Bilateral Investment Promotion Agreements (BIPAs) (mainly about protection)Free Trade Agreements: CEPA, CECA, BTIA etc with investment chapter (market access +protection)India received mln USD ( )
8India: FDI and GenderAgriculture and food access: mechanisation in threshing, ….Services: Employment + AccessReceives highest share of FDI: 58% of total (Apr 00 to July 09), 53% ( Jan)Employment impact positive in many areas where women predominate; tourism, health, educationBut several concern areas as wellConstructionRetailHealthBanking
10Construction: Employment 13.6% of workers are women, 4.4% of urban female employment,Accounts for 38.9% of unorganised female casual non-agr workersIndia receives 12% of total FDI inflows in construction, is already rel.ly open,Mechanisation has already replaced labourWomen are evicted first (Jhabvala)Empl. Growth: 99-00: male 4.87%, fem. 1.35%, fell from 93/
11Retail: EmploymentAccounts for 9.5% of urban women’s total employment (in rural low)16.63% of urban women’s services employment ( ), 25.8% of rural women’s services employment.Small family run shops, women can combine with HH activitiesStreet vendingInformal sector
12Women already feeling pressure: Retail contributed 22 Women already feeling pressure: Retail contributed 22.85% in employ (urban), fell to 16.63% in 2004, smaller fall in rural Women’s share in total retail employment also fell from 11.25% to 9.47% (urban), smaller fall in rural (gr. In abs employ in rural) Reason: corporate retail, traffic, restrictions on street vending, credit
13Health: Access Mode 3: Investment Employment for nurses , health professionals can go up. Can also be increase in access but for whom?Adds to the Private vs public facilities debate: our vulnerable need pub not priv (25% of health exp is public in India.)User costs can go upPrivate facilities crowd out pub. facilities/FDI crowds out dom invMore exp relatively for women, esp. in rural areas, will act as a deterrentFDI not in rural areasImpact on care work? + if increased access, - ve if not.
15Banking: AccessForeign banks in India: Comparatively higher proportion of women account holders (23.8%) but disbursement lowest compared to all others (only 7.9%).Comparatively RRBs do much better: 25.5% of accounts, 19.6% of credit to womenForeign Banks also avoid risk: No lending in rural areasIn fact only metros within urban. 81.4% in merop. And 17.9% to other urbanUrban lending to women: 24.4% of total lending to women and 21.1% of women borrowersNo-frills account (only 0.13% of total) by foreign banks(March, 2009)
17Performance Requirements, Regulation, Policy Space PRs getting increasingly dilutedConstraints on Domestic Policy Space: Investors’ Rights sacrosanct, acts as deterrence for policy. Tax laws, health, environmentExamples:Land and natural resources: the majority of the 25 known outstanding investor-state cases under U.S. FTAs and BITs (totaling $11 billion in claims) relate to natural resource policies. Nearly half of the 129 cases pending before the World Bank’s investment dispute facility relate to natural resources. (Burlington Resources vs Ecuador, pending, reveals conflicts between government duties to protect human and indigenous rights, on the one hand, and obligations to protect foreign investors)Health: Renco vs Peru: Lead poisoning of 162 La Oroyan children (US-Peru FTA). Renco (Doe run) sues Peru for 800 mln USD.Wherever regulation is not mature/incomplete: could become problematic. e.g. Medical Tourism and domestic regulation: surrogacy etc.FDI can work for gender equity only if we can tweak it to specific needs and provide supporting policy