Gender and the Global Economic Crisis

7/28/2019 Gender and the Global Economic Crisis

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DevISSuesDevelopmentISSues Volume12/Number2/November 2010

Also in this issue:Generation Text

Local Government and Development


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From the Editorial Board

ISS is the International Institute of Social Studies of Erasmus University Rotterdam

The Financial Crisis 2 Years On

It was in the summer o 2008 that the frst bank in the US ell, Lehman Brothers. At the time, both the general public and

economists thought that it was an entirely American phenomenon. Within a ew months, however, the crisis had spread across

Europe, with banks alling or being taken over by the state, including devastating bankruptcies o Icelands main banks. Yet ormost o 2009, the general view was still that the crisis would not hurt the developing world. It was seen as a rich mens crisis, right

at the heart o the fnancial centres o the world, rom New York to London and rom Reykjavik to Frankurt. In her contribution

to this special issue, Esther-Mirjam Sent emphasizes the word men here, showing that the crisis emerged in a male-dominated

fnancial sector. She argues, on the basis o available research outcomes, that management teams that represent a critical mass o

women are better able to cope with risk and lead to better business perormance. So, a stronger representation o Lehmans sisters

may have prevented the crisis in its current orm.

A narrow economic view may hold on to the wishul thinking that the negative eects o a fnancial crisis in the US would remain

limited to the fnancial sector in the developed world. But those taking a wider economic perspective knew that this was a myth,

desperately held on to by those who had no idea how vulnerable fnancial markets are in todays fnancialized and globalized

world. Prabirjit Sarkar shows in his contribution that stock markets and other orms o fnancial market development do not

necessarily promote economic growth in developing countries. Rather, the fnancial sector seems to be a risk or development.

While the fnancial system in the US and Europe almost collapsed, the wider economic perspective appeared to be the morerealistic one. Governments in the developed world stepped in to nationalize banks that were considered too big to ail and thereby

interered heavily in the market. While the real economy consumption, investment, exports, imports, employment showed

alarmingly sharp declines. Hence, it seems not good or the economy to have the fnancial market continuously spread.

As the crisis moved into its second year, it became clear that it was spreading to the developing world as well. First to its fnancial

sector, with banks being aected through toxic derivatives they had bought rom US and through the drying up o oreign

capital inows, which declined by a third in 2009. The eect o the crisis in the developing world was, however, not limited to

the fnancial sector. It also hit the real economy, in particular through a reduction in exports as well as imports. These eects

are described clearly in the paper by Peter van Bergeijk. Hence, there is an important lesson to be learnt about the extent o

globalization o the world today: our world is even more strongly globalized than most o us thought. Not only through the spread

o ICT and coca cola to every village across the globe, but also through the fnancial interconnectedness o the worlds banks and

fnancial markets, and the increasing role o trade or a countrys development. Although Arica seems to have become more

resilient to uctuations in its growth over the past decade, the continent is still vulnerable to economic downturns elsewherein the world, as Jorge Arbache argues in his contribution. Aricas growth benefts are mainly due to exports o resources, which

beneft only a ew countries on the continent and still depend heavily on imports by the developed world and China.

This crisis has thus shown the vulnerability o the globalized economy, in which not only good things spread quickly, but also bad

things can very easily contaminate every country around the world and, worse still, hit the weakest groups hardest, as Richard

King points out in his article. He brings together indicative evidence that poor women are hurt particularly, due to their role as

providers or household livelihoods and their communities.

Finally, this issue contains two fne papers by ISS participants that are not part o the theme. The frst one, by Sergio Ferragut,

applies an innovative local development perspective to the development o an open market in the city o The Hague. The other

one, by Marie Angelie Resurreccion, ocuses on youth mobilization in the Philippines, reerred to as generation text, through

mobile phones and internet. Both give hope or a better world to come ater the fnancial crisis. And perhaps even more so or

ideas rom the developing world where alternatives or Western white male fnancial innovations are more likely to come rom

perhaps in text messages.Irene van Staveren

The cover this issue is a collage in which we have tried to illustrate various aspects o the current global economic crisis. The

background photograph is a Financial Crisis Montage by D.F. Shapinsky (see acknowledgement below) showing just some o the

headlines and news reports resulting rom the onset o the crisis. But economic crises, however they are started and whoever

is to blame, aect real people: in their jobs, their homes and their liestyles. The two superimposed photos show just two

examples o this. One shows two Vietnamese women making hats or their local community. The younger woman is helping her

mother as this is the only way she can make a living. The other photograph is part o a Brazilian bankers trade union poster

making the point that The gains o the bankers brings results. With thanks to Helen Hintjens, Lee Pegler and Karen Shaw.

Background photo Financial Crisis Montage by D.F. Shapinsky, October 2008

About the cover


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Contents

Page 4 / The fnancial crisis, the import collapse and the

developing countries

PetervanBergeijk

Page 6 / How Have Global Economic Crises Aected Aricas

Economic Growth?

JorgeArbache

Page 9 / Does the Stock Market Promote Growth?

PrabirjitSarkar

Page 12 / Gender and the Global Economic Crisis

RichardKing

Page 15 / The crisis as an opportunity or emale leadership

Esther-MirjamSent

Page 18 / The Local Government as a Central and Leading

Actor o Local Development: The case o the

Herman Costerstraat Market in The Hague

SergioFerragut

Page 21 / Youth Power 2.0: Harnessing technology or youth

mobilization

MarieAngelieResurrecion

TheviewsexpressedinDevISSuesarethoseotheoriginalauthorsanddonotnecessarilyrefectthoseotheInstitute.

Theonlineversionsoallarticleswithullbibliographycanbeoundatwww.iss.nl/devissues


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The fnancial crisis, the

import collapse and the

developing countriesPeter van Bergeijk

DespitegreenshootsintheOECDand

stronggrowthratesinChinaandIndia

theworldeconomyisnotoutothe

woodsyet.In2007themostserious

globaleconomiccrisissincethe1930s

startedandmanydevelopingandemergingeconomies(DEEs),thatsince

themid1990shadopeneduptothe

worldeconomy,arenowexperiencing

thedownsideostrategiesthat-or

goodreasons-reliedheavilyoninter-

nationaltradeandoreigndirectinvest-

menttoachievenationaldevelopment.

What Was expected

Whenthenancialcrisisburstoutin

2007themajorityoeconomistswasnot

expectingtheDEEstobehithard.Arst,oten-mentioned,reasonwasthat

developingcountrieshadnotengaged

inthekindonancialwhiz-kiddingthat

hadcreatedtheenormousbubbleinthe

OECD.Thusitwasassumedbymany

analyststhattheDEEswouldnotsuer

aall-outromthebankingcrisiswhich

aterallwasaproblemotheOECD

countries.Asecondreasonwasthe

mythodecoupling:thenonOECD,

inparticulartheBRICcountries(Brazil,

Russia,IndiaandChina)wereassumed

tohavereachedsustainablemomentumintheirdevelopmenttrajectory.Itwas

expectedthattheexperienceothe

dotcomcrisis(whentheBRICswereable

toshowcontinuousgrowthindepen-

dentlyotheweakeningOECDbusiness

cycle)wouldberepeated.

Bothideasweredangerousandwrong

(andactuallynotnewatallasthebelie

thattheperipherycouldescapethe

nancialcollapseinthecentrewasalso

widelysharedintheearly1930swhenitprovedtobeerroneous).Itistrue

thatsomeotheBRICscontinuedto

growconsiderablybutthesustainability

ogrowthin2010andbeyondisnot

sel-evidentbecausethemaindrivero

thoseexpansions(monetaryandscal

stimulus)cannotbeexpectedtolast

orever.Moreimportantly,smallerDEEs

probablydidnotexperiencethismo-

mentumandmayhavebeenhithard.

What is happening

Wedonotyetknowwhathappened

inmanycountries,simplybecausereal

timedataorasucientleveloanalysis

arenotavailable.Thismeansthatwe

havetodosomeeconomicdetective

workandusethemethodoindirect

observationtoineriandhowthecrisis

hitstheDEEs.Wecan,orexample,

takealookatmoreaggregatedatain

ordertogleantheimpactothecrisis

ontheDEEs.Intodaysworldmanychannelsexistthroughwhicheconomies

arelinked.Internationalfowssuchas

remittances,banklending,migration

anddevelopmentaidareinfuenced

bythedownturninOECDeconomies.

AnexampleistheamountoOcial

DevelopmentAid(ODA).Lastyearthe

OECDs Development Co-operation

Report 2009estimatedthattheunder-

lyingtrendgrowthrateothevolume

oaidneededtoincreaseto11per

centperyearinordertoachievethe

Millenniumgoals.Theresultsin2009were,however,disappointingasthe

amountoaidincreasedby0.7percent

only.Importantlythisisnottheresult

oincreasedspendingbutoexchange

ratemovementsthatcontributemore

than4percentagepoints.Actuallytotal

ODAincurrentpricesandatcurrent

exchangeratesdecreasedromUS$122

billionin2008to119billionin2008

(actually12OECDcountriesreduced

ODA).

Otenthemeasurementothesefows

isimpreciseanddatabecomeavailable

withconsiderabledelay.Betterdata

existorForeignDirectInvestment(FDI)

andespeciallyorinternationaltrade

andthereorewewilltakeacloserlook

attheseinternationalfows.Atersix

yearsouninterruptedgrowth,FDIfows

todevelopingandtransitioneconomies,

accordingtoUNCTADsrecentGlobal

investment trends monitor,declinedin2009by35percentand39percent,re-

spectively.Exportvolumesalsoshowed

substantialdeclines.Accordingtothe

World trade monitor(compiledbyCPB

NetherlandsBureauoEconomicPolicy

Analysis)DEEsrealexportsatthestart

o2010weresome12percentbelow

theirprevioushigh(thepeakothe

tradecycleisin2008).Experiencesat

theregionallevelshowedalotovari-

ation.Asiadenitelydidbetter,butex-

portsinLatinAmericahaddecreasedby

19percentandthevolumeoexportsin

theMiddleEastandAricawaseven25

percentbelowthepreviouspeaklevel

(thetradecycleorthelatterregionap-

pearstoollowadoubledippattern).

Somearguedthatthesedevelopments

couldbeasymptomoaprocesso

deglobalization.Othersblamedaco-

llapseotradenance(whichisparticu-

larlyrelevantorDEEs)andanincrease

inprotectionismorthedeclines.Itis,

however,importanttonotethatthetradeandinvestmentcontractionstook

placeinapolicycontextthatbyand

largeappearedtohavebeenwithstand-

ingthetemptationsoprotectionism

and,moreover,theG20madeadditional

tradenancingoUS$250toUS$400

billionavailable,includinginstruments

tomitigaterisksandliquiditysupport.

Thecollapseointernationalexchange,

inotherwords,couldhavebeenmuch

largeriinappropriatepolicyresponses

hadoccurred.

imports provide a good

indication of crisis impact

Inormativeassuchobservationsmay

be,theydonotyetprovideanindi-


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cationotheactualimpactothecrisis

inindividualcountries.Iwewanttoob-

servetheimpactothecrisisonaspe-

ciccountry,oneothebestmethods

istoobservethedevelopmentothe

volumeoimports.Thisissobecause

tradefows,unlikemorecomprehensive

andcomplexphenomenasuchas(na-

tional)incomeareobservedreasonably

accuratelyandpublishedwithoutmuch

delay.Exportsandimportsdonot,how-

ever,providethesamesortoinorma-

tionabouttheconditionotheeconomy

oDEEs.Actuallyexportsotendonot

provideameaningulpictureothe

impactoacrisis.Adeclineindomes-

ticdemandmay,orexample,induce

rmstondnewmarketsabroadand,i

policymakersrespondwithdevaluation,

onewouldexpectexportstoincreaseintheatermathoanancialcrisis.This

isallthemoretrueaspolicymakers

typicallyoptoranexportledgrowth

strategytogetoutoacrisissituation.

Resourcesarethusotenre-allocated

towardstheexportsectorinordertoen-

surethathardcurrencycanbeearned,

orexample,inordertobeabletomeet

internationaldebtobligations.Exports

thusactuallymaytendtogrowduring

andaternancialcrises.Fromapoliti-

caleconomyperspectivetheperceptionmayberelevantthatimportsentailan

outfowohardcurrency.Thuspolicy

makersmightnotbeinclinedtocome

totheaidoimportingrms(unless

theimportsarecrucialortheexport-

ingindustry).Paymentriskisespecially

relevantortheimporterwhowillexpe-

rienceariseintransactioncosts,orex-

ample,becauselettersocreditoreven

ullpaymentinadvanceisrequired.The

reductionineectivedemandthatisa

consequenceoanancialcrisisdirectly

translatesintoareducedimportvolume.Finally,inascenariothatinvolvesade-

preciationothecurrency,thepriceo

importswillriseandthusexertanega-

tiveinfuenceonthevolumeoimports.

Allinalltheimpactoanancialcrisis

shouldbeexpectedtobemostvisible

andunambiguousinthedevelopment

othevolumeoimports.

Where does the crisis hit?

Figure1analysesthedeclineinthe

volumeoimportsinacross-countrysettingoragroupo45countriesover

theyears2007to2009.Thisgroupo

countriescoverstheOECDandthema-

jorDEEs(Chinaisnotincludedbecause

thedataareinsucientlycomparable).

TheFigurecomparesthepeakandthe

troughotheimportcycleoverthispe-

riod.Thegurerstoallillustratesthe

largevariationincountryexperiences.

TheNetherlandsregistersoneothe

smallestimportcontractions(oabout

-11percent);thelargestcontractions

osome-45percentoccurinBelarus

andVenezuela.Importantly,thegure

relatesthisdeclinetothelevelodevel-

opment(whichisapproximatedbythe

incomeperheadinUSdollars).Thedot-

tedregressionlineindicatesthatlower

incomeperheadisassociatedwith

strongercontractionothevolumeo

imports.TheobservationthattheDEEs

(haveto)reducetheirimportexpendi-

turestoamuchlargerextentsuggests

thattheyarehitharderbythecrisisthan

therichercountries.Ocoursethisisnotadirectobservationbutthendingthat

manyDEEsareadverselyhitbythecrisis

iscorroboratedbyothermoreadvanced

techniquessuchastheWorldBanks

appliedmicrosimulationmodelswhich

alsoshowthatthesemacroeconomic

eectstrickledowntothe(new)poor

andespeciallyamiddleincomegroup

ocrisisvulnerablewithsubstantial

povertyanddistributionaleectsand

potentiallyimportanteectsonlong

termgrowth.Itisalsoimportanttonote

thatimportsintheNationalAccountsaresubtractedinordertoarriveat

GrossDomesticProduct.Acontrac-

tionoimportswillthusparadoxically

infuenceGDPupwardly.Thismaymake

theNationalAccountgureslookmore

positivelythantheactualunderlying

developmentoconsumption,invest-

mentandnetgovernmentexpenditure.

TheupshotisthatarecoveryoGDP

maybelesssustainablethanexpected.

Allinall,theimportantconclusiono

thisarticleisthatthedevelopingand

emergingeconomiesparticularlyhave

experiencedverysubstantialdeclinesin

importvolumes.Theimplicationisthat

thesecountriesmusthavebeenhitrela-

tivelyhard.Importantly,thecontraction

oimportswilllimittheirprospectsover

themediumterm,becausedevelop-

mentrequiresimportsocapitalgoods,

rawmaterials,intermediategoodsand

essentialconsumergoods.Thecontrac-

tionoimportsmaythusactasauture

drainondevelopmentandtheinfuenceothecrisiswillgobeyondthedirect

economicimpact,orexamplebecause

healthcarehastobecutdown.The

WorldBank/IMFGlobalMonitoring

Report2010TheMDGsatertheCrisis

analysestheimpactodecelerating

growthonhumandevelopmentindica-

torsndingthatlieexpectancyatbirth

onaveragedeclinesby10percentas

inantandchildmortalityincreaseby50

to75percentrespectively.Againstthis

backgroundthedevelopmentoODAis

evenmoredisappointing.

PeterA.G.vanBergeijkisProessoroInternational

EconomicsatISSanddeputydirectoroCERES,

theDutchResearchSchoolorResourceStudiesor

Development.

Source:P.A.G.vanBergeijk,OntheBrinkoDeglobalizationEdwardElgar,

Cheltenham2010,Appendix7.1

Figure 1 Import reduction (volume change in per cent 2007-2009)and level of development (GDP per capita 2008)


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Howhastheglobaleconomiccrisisa-ectedeconomicgrowthinsub-Saharan

Arica(Arica)?Thisisaparticularly

importantquestionbecauseothecon-

tributiongrowthcanmaketoachieving

theMillenniumDevelopmentGoalsin

thecontinent.Unlikepreviousinterna-

tionalcrises,Iwillarguethatthistime

Aricahasdonequitewelleconomi-

cally,comparedwithotherregions,and

hasshownsomeeconomicresilience.

Aricancountrieseconomicgrowthhas

beenrisinginparallelwiththerestotheworldsincetheearly2000s;itstop

perormersaredoingwellcomparedto

ast-growingcountriesinotherregions.

Furthermore,theregionquicklyre-

sumedgrowthaterlastyearseconomic

shock:overall,Aricaneconomiesare

expectedtogrow5percentthisyear

and5.9percentin2011,abovethe

worldaverage.

ButdoesthismeanthatAricanecono-

mies,asagroup,havenallyturnedthe

corneronthepathtosustainedgrowth?Growthoverthepastthreedecades

hasbeenlowandevennegative.Good

timeswereotenollowedbyverybad

timesandeconomicgrowthwasrarely

sustained(withsomenotableexcep-

tionslikeBotswanaandMauritius).In

lightothisvolatilebackground,in

thisshortpieceIseewhethergrowth

hasreallyacceleratedinrecentyears.

Ialsoaskabouttheunderpinningso

highergrowthrates.And,nally,Iask

whetherthemorerecenteconomicgrowthissustainableornot,inrelation

totheeconomiccrisis.Toconductthis

exercise,Iwillemploythemethodology

oArbacheandPage(2007)toidentiy

growthaccelerationanddeceleration.

ThereaterIuseGDPpercapitagrowthdatatakenromtheWorldDevelopment

Indicatorsortheyears1980to2008.

Overthepastthirtyyears,averageannu-

algrowthrateacrosstheAricanconti-

nenthasbeenjust1percent.Thispoor

perormancecanbeattributedmainlyto

extremelylowandevennegativegrowth

inthe1980sand1990s.Thiserawas

markedbysevereeconomicfuctua-

tions,negativegrowthandconficts,as

wellasglobalandinstitutionaldisrup-tion.Growthacceleration-aperiod

characterizedbygrowthratesabove

thetrendoratleastveyearsinarow

(seeArbacheandPage2007ormore

details)-onlyoccurredin28percento

theyearsbetween1980and1999.This

gurehasincreasedto57percentor

thepost-2000period.Thismeansthat

thechancesoranAricancountryto

experienceagrowthaccelerationhave

improved,morethandoubling.Similarly,

theprobabilityoagrowthdeceleration

-aperiodcharacterizedbygrowthratesbelowthetrendoratleastveyears-

reduceddramaticallyintheregionto10

percentinthe2000s,rom30percent

in1980-1999.Table1showsthis.

Theregionsgrowthhasnotbeenuni-

ormacrosscountries,withresource-rich

countriesgrowingsignicantlyasterin

recentyearsthantheaverage(Table1).

Resourceandmineral-wealthycountries

haveprosperedeconomically,growing

by5percentperannumonaverage

since2000,whichistwicetheAricanre-

gionsmeangrowthrateorthatperiod.

Theresource-richgroupocountries

alsoexperiencedmanymoreperiods

ogrowthacceleration(70percentcom-

paredto26percentbeore2000).By

comparison,non-resourcerichcountries

havegrownonaverage1.5percent

perannumsince2000andexperienced

growthaccelerations51percentothe

time,uprom30percentbeore2000.

Thesestatisticssuggestthattheregions

recentmorerapidgrowthreliesstrongly

onthegrowthperormanceinresource-

richcountries.

What underpins recent

groWth?

Muchotheimprovementineconomic

perormanceinAricaneconomies

sincetheyear2000canbeseenasbe-

ingcausedbyasubstantialincreasein

growthaccelerationscombinedwitha

substantialreductionintherequency

andseverityogrowthdecelerations

(Table1).AccordingtoArbacheand

Page(2007),amongthemainactors

explaininggrowthvolatilityinArican

economies,certainlyduringmuchothepost-independenceera,areconficts,

naturaldisasters,commodityprice

shocks,termsotradeshocksandpoor

policies.Duringtheperiodsince2000,

manyotheseactorshavebecome

moreavourable:confictshavegra-

duallydeclined;therehavebeenewer

naturaldisasters;commodityprices

havebeengenerallyquitehighandhigh

pricesairlysustained.Itcanalsobe

arguedthatmacromanagementhasim-

proved.Overall,Aricancountrieshave

benetedagreatdealromavourableeconomic,politicalandnaturalcon-

ditions.Uptothepresent,theglobal

crisishasnotsignicantlychangedthe

patternocommodityprices.

Towhatextentisthisturn-aroundas-

sociatedwithchangesinthegrowth

determinantsthatarelinkedtolong-run

growth?Iexaminegrowthdeterminants,

suchasinvestment,savingsandtrade,

beoreandaterthe2000s,tryingto

identiywhethertheyhaveimproved.Althoughsuchanapproachdoesnot

allowustoidentiycausalrelationships

betweenchangesingrowthdetermi-

nantsandgrowthepisodes,romthe

pointoviewoassessingsustainability,

How Have Global

Economic Crises

Aected AricasEconomic Growth?

Jorge Arbache

the regions recentrapid

growth relies ..on..growth

in resource-rich countries.


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thisisnotnecessarilyalimitation:we

donotneedtoknowwhether,say,an

increaseintheinvestmentrateledto

morerequentgrowthaccelerations

ormorerequentaccelerationso

growthpromptedariseininvestment.

Regardlessothedirectionocausality,

ithereisevidencethatthestructural

characteristicsoAricaseconomies

strengthenedduringtherecentperiod

omorerequentgrowthacceleration,

itincreasesourexpectationthatthe

recentgrowthaccelerationmaybe

sustained.

Table2showsthemeanvalueogrowth

determinantsduringgrowthaccelera-

tionsbeoreandater2000.Thegures

indicatethatmostgrowthdeterminants

havenotchangedsignicantlysince2000:theonlyinvestmentvariablethat

increasedwasoreigndirectinvest-

ment.Therewasareduction,notan

improvement,ininvestmentvariablesin

resource-richeconomiesduringgrowth

accelerationsbeoreandater1999,

whereasthevaluesothesevariables

remainedbasicallythesameinnon-

resource-richeconomies.Infation

dropped,mostlyduetonon-resource

richcountries,suggestinganimprove-

mentinmacroeconomicpolicies.Allothergrowthdeterminantsexamined

remainedmostlyunchanged.

Theempiricalliteratureongrowthalso

suggeststhatpoliticalandinstitutional

reormscanleadtoacceleratedgrowth,

evenincircumstanceswhereunderlying

economicvariablesremainlargelyun-

changed.Table2showsthatmeasures

oAricasgovernanceremainedmostly

unchangedbetweenthetwoperiods

orbothresource-richandnon-resource

richcountries:noimprovementsinthe

measuresogovernance.

hoW durable is groWth in the

face of crises?

Whatdoesthisanalysissuggestabout

thedurabilityoAricasrecentgrowthperormance?Althoughanumbero

otherstudieshaveoundthatgrowth

canoccurwithoutcorrespondingin-

creasesininvestmentrates,thelacko

improvementinaggregateandprivate

investmentisworrisome.Theabsence

oanysignicantincreaseintheinvest-

mentrate,asawhole,duringgrowth

accelerationssuggeststhatmucho

thegrowthsince2000consistsmostly

oincreaseduseoexistingproduction

capacityandoincreasedproductivity.Whilesuchmovementiswelcomeand

marksareversalrompastlowyields

oninvestment,itdoesraiseconcerns

regardingthesustainabilityogrowth.

Aricasaggregateandprivateinvest-

mentrateslagbehindotherregions

and,evenwithanimprovementin

productivity,thelackoimprovement

ininvestmentposesproblemsromthe

pointoviewothesustainabilityour-

thergrowth.Thecurrentnancialcrisis

isnotlikelytobehelpulinthisrespect.

Althoughtradehasexpandedoverall

sincethemid1990s,itdoesnotappear

tobeleadinggrowthinthe2000sas

itisgrowingonlyslowly.Comparedto

LatinAmerica,theMiddleEast,North

AricaandSouthAsia,Aricahasalways

hadahighshareotradeinitsnational

incomeandahighratiooexports

toGDP.However,Aricanexportsare

growingrelativelyslowlyandnon-tradi-

tionalexportsareaverytinyshareothe

regionsoutput.Moreworrisomeisthat

Aricasexportsremainheavilyconcen-

tratedinaewtraditionalcommodities.

Again,thecurrentcrisis,withitsnega-tiveeectonworldtrade,isnotlikelyto

behelpulatall.

Theevidenceonpoliciesandinstitu-

tionsalsoraisesconcernsorgrowth

sustainability,asthesehavenot

changed,suggestingthateconomic

growthhasnotbeenaccompaniedby

improvedgovernance.

Therearethusalmostnosignicant

changesingrowthdeterminantsinArica.Theexceptionisorthoseo

investmentintheresource-richcoun-

tries,butthesewentdown,notup,

andinfation,whichimproved.Atmost,

thesechangescontributetoreducing

therequencyandseverityogrowthde-

clines(ArbacheandPage,2010).

Table 1: GDP per capita growth rate and frequency of growth acceleration and deceleration Africa

1980-2008 1980-1999 2000-2008

GDPgrowth(%) 1.01 0.25 2.55

GDPgrowth(%)-resourcerichcountries 1.93 1.97 5.01

GDPgrowth(%)-non-resourcerichcountries 0.63 0.40 1.53

Frequencyogrowthacceleration(%)-allcountries 39.0 28.4 57.1

Frequencyogrowthdeceleration(%)-allcountries 22.4 29.6 10.3

Frequencyogrowthacceleration(%)-resourcerich

countries42.4 25.8 70.4

Frequencyogrowthacceleration(%)-non-resourcerichcountries 37.7 29.5 51.5

GrowthaccelerationanddecelerationdenitionsaccordingwithArbacheandPage(2007).

Thedenitionoresource-richcountriesisromtheRegionalEconomicOutlook2010,IMF.

Calculationsbasedon1,189country-yearobservations.

political and institutional

reforms can lead to

accelerated growth.


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8

conclusions

Thecurrentglobalnancialcrisishasnot

changedAricasrecentgrowthpat-

tern,whichhasremainedstrongsince

thebeginningothedecade.Empirical

evidencesuggeststhattheimprove-mentineconomicperormanceturns

outtobeduelargelytotwoactors:a

substantialreductionintherequency

andseverityogrowthdeclinesinall

economiesandanincreaseingrowth

accelerations,especiallyinmineral-rich

economies.Thereissomeevidence

omodestimprovementsingrowth

determinants,andanindicationthatthe

growthsurgewaspropelledmainlyby

therapidgrowthindemandornatu-

ralresourcesandbyimproveduseo

existingproductioncapacityandactorsoproduction.Theconcentrationo

growthaccelerationintheresource-

richeconomiesraisesthepossibility

thatgrowthisvulnerabletodeclinesin

commoditypricesandtothenatural

resourcecurse.Aricancountrieshave

totakeadvantageothegoodtimesto

acceleratesocialprogress,todiversiy

theireconomies,and,aboveall,to

strengthentheireconomicundamen-

tals,asthesearethepillarsosustained

growthandarelessvulnerabletocrises.

JorgeArbacheissenioreconomicadvisoratthe

BrazilianDevelopmentBank(BNDES).Heisaor-

merdirectorotheAricaDevelopmentIndicators,

WorldBank(2005-2009).Email:jarbache@gmail.

com.

Table 2: Differences of means of economic fundamentals and institutional variablesduring growth acceleration - Africa

AllcountriesResource-rich

countries

Non-resourcerich

countries

Variable 1980-1999 2000-2008 1980-1999 2000-2008 1980-1999 2000-2008

Investment(%GDP) 24.7 22.6 30.6 22.8 22.9 22.1Privatesectorinvestment(%GDP) 14.6 14.4 21.8 13.9 12.4 14.6

Foreigndirectinvestmentnetfow(%GDP) 1.73 4.35 2.54 6.73 1.41 3.45

Savings(%GDP) 10.2 11.6 25.8 23.0 5.32 5.65

Trade(%GDP) 73.9 75.8 84.9 85.1 69.9 70.3

CPI(%) 16.2 10.4 24.0 15.2 14.2 7.8

Politicalstability(-2.52.5) -0.44 -0.59 -0.92 -1.1 -0.30 -0.29

Voiceandaccountability(-2.52.5) -0.43 -0.49 -1.0 -0.89 -0.25 -0.27

Regulatoryquality(-2.52.5) -0.47 -0.56 -0.68 -0.93 -0.41 -0.36

Ruleolaw(-2.52.5) -0.65 -0.66 -0.97 -1.08 -0.56 -0.42

Governmenteectiveness(-2.52.5) -0.60 -0.63 -0.86 -1.02 -0.52 -0.42

InstitutionalvariablesareromKaumann,D.,Kraay,A.andMastruzzi,M.(2009),Governance

MattersVIII:AggregateandIndividualGovernanceIndicators,1996-2008.WorldBankPolicyResearchWorkingPaperNo.4978.

Ratingscalerangesrom-2.5(weakperormance)to2.5(veryhighperormance).Calculationsbasedon1,189country-yearobservations.

Working Papers

ISS Working Papers can be ound

on the ISS website at www.iss.nl/

Library/Publications/Working-

Papers. They can also be ordered in

hard copy rom The Bookshop, PO

Box 29776, 2502 LT The Hague, The

Netherlands

506 Interactions Between States And Markets In A Global Context O

Change: Contribution For Building A Research Agenda On Stakeholders

Social Responsibility / Patricia Almeida Ashley

505 Climate Change And The Language O Human Security / Des Gasper

504 Socio-Economic Determinants O Road Trafc Accident Fatalities In Low

And Middle Income Countries / Michael Grimm And Carole Treibich

503 Cultivating Humanity? Education And Capabilities For A Global Great

Transition / Des Gasper And Susan George

502 To What Extent Can Disparities In Compositional And Structural Factors

Account For The Gender Gap In Unemployment In The Urban Areas O

Kenya? / Wambui R. Wamuthenya

501 Does Inequality In Health Impede Growth? / Michael Grimm

500 Economic Crisis And Womens Employment Rate In A Sub-Saharan Arican

Country: Explaining The Rise In Womens Employment Rate In The Urban

Areas O Kenya / Rose Wambui Wamuthenya

499 Short And Long Run Macroeconomic Eects O Trade Policy In The

Presence O Debt Servicing / Syed Mansoob Murshed


9/24

9

Figure 1: Cross-Country Relationship between Stock Market Turnoverand Growth Rate for 34 Less Developed Countries

(2001-2006 Averages)

Thispaperquestionstheconventionalwisdomthatstockmarketsencourage

growth.Theresearchisbasedona

paneldataanalysiso34lessdeveloped

countriesovertheperiod2001-2006.

the present study

Inthestockmarket,saversprovide

investibleundstorms.Inturn,andi

allworkswell,saverscanrecouptheir

investmentatanytimeotheirchoice.

Ahighlybuoyantstockmarketprovides

themarketmechanismorpromotinggrowthandinvestmentasrmscanfoat

newsharestoraisecapitalorinvest-

ment.

Data Source and Methodology

Theactivitiesothestockmarketare

measuredbystocktradinginrelationto

GDP.Intheprocess,themarketvalue

othermsgenerallyrises,whichis

capturedbyrealmarketcapitalization

(whichisthemarketvalueototalshares

orstocksoallthedomesticcompanies

listedinthestockmarketsoacountrydividedbythegeneralpriceindex)

inrelationtoGDP.Theturnoverratio

(TURNOVER)istheratiobetweenthe

valueostockstradedandrealmarket

capitalization.Thisratioisotenusedto

getaroughideaothebuoyancyinthe

stockmarket.Anothervariabletomea-

surethesizeothestockmarketisthe

numberodomesticrmslistedonthe

nationalstockmarket.Forcross-country

comparisonitisdefatedbythesizeo

population(LISTPOP).

Forthisstudy,weobtainedthere-

levantWorldBankdataorGDPgrowth

(GGDP),TURNOVERandLISTPOPor

34lessdevelopedcountries(LDCs)

Does the Stock Market

Promote Growth?Prabirjit Sarkar

Dostockmarketswork?Isthereanylinkbetweenstockmarketdevelopmentandgrowth?So-calledmainstreamjournalso

economicsareulloarticlesprovidinganarmativeanswertothesequestions.Moreover,thisliteraturearguesthatnancial

marketsingeneralandstockmarketsinparticularworkbetterinanAnglo-Saxonlegalenvironmentasthisprovidesbetter

investorandcreditorprotection.Itisurtherarguedthatthelessdevelopedcountriesinheritingthislegalenvironmentollowing

colonizationexperiencehighernancialdevelopment:nancialinstitutionsandstockmarketsfourishandthegeneralpublic

participatesmoreinnancingcompanyinvestmentprojects.Asaresult,oneaspectothepresentregimeoglobalizationhasbeen

atendencytowardslegalglobalization.Dancingtothetuneothistrendolegalglobalization,shareholderandcreditorprotection

lawunderwentsubstantialchangesinmanycountries.


10/24

10

ortheperiod2001-2006.Twoscatter

diagramsdepictingthecross-country

averagerelationshipbetweeneach

stockmarketdevelopmentindicatorand

realGDPgrowthrate(allaveragedover

theperiod)provideasnapshotviewo

whatweound.Theyshownoclearrela-

tionshipbetweenstockmarketdevelop-

mentandrealgrowthrate.

Foramorerigorousinvestigation,we

undertookaregressionanalysisothe

relationshipbetweeneachothestock

marketdevelopmentindicatorsand

thegrowthrate.Thiswasbasedona

ullpaneldataseto204observations

(ratherthanthe34observationsused

inthescatterdiagrams)andincludesa

proxyvariableorthestageodevelop-

ment,namelytheinitial(2001)GDPpercapita.Inaddition,weincorporatedan

indexonancialdevelopment,domes-

ticcredit-GDPratio.

Ourestimatesshowthattherealgrowth

ratehasneitherasignicantrelationship

withstockmarketturnoverrationorwith

stockmarketlisting.Similarlythereisno

signicantrelationshipbetweengrowth

anddomesticcreditexpansion.

ToincorporatetheAnglo-Saxonlegalorigineect(whereallegedlynancial

marketsunctionbetter),wedistinguish

thesecountriesromtherestwiththe

helpoadummyvariable.Thisassumes

thevalueooneortheninecountries

(Ghana,HongKong,India,Malaysia,

Nigeria,Pakistan,Singapore,South

AricaandThailand)withanAnglo-

Saxonlegalheritageandzeroorall

othercountries.Theresultcontradicts

themainstreamliterature.Itisnegative

andhighlysignicant,indicatingalower

growthrateinthecountrieswithAnglo-Saxonlegalheritage.Thismaybepartly

becauseohighergrowthratesinChina

andotherex-socialistcountrieshaving

noAnglo-Saxonlegalheritage.

Theresultsthereoreconrmthe

insightsromthetwodiagrams:we

ndnodirectandpositiverelationship

betweennancialandstockmarket

developmentandrealgrowthrate.

observations

JohnMaynardKeynescomparedstock

marketswithcasinosanddiscounted

theimportanceothestockmarket

orcapitalaccumulationandgrowth.

Nevertheless,inthepresenterao

nancialliberalizationundertheaegiso

thethreepillarsotheBrettonWoods

system,stockmarketdevelopmenthas

beenanimportantpartobothinternal

andexternalnancialliberalizationin

lessdevelopedcountries.

Yet,ourstudyndsnorelationship

betweenstockmarketdevelopmentand

realgrowthrate.Furthermore,wend

noevidenceoarelationshipbetween

growthrateandnancialdevelopment

asmeasuredbydomesticcredittoGDP

ratio.Apossibleexplanationorthisis

thatinmostcasessharesarebought

onlytosellatalaterdatetoappropri-

atecapitalgains.Buyingandselling

onthestockmarketisotengoverned

byspeculationand/orincorneringthemarkettomakeaquickprot.Indeed,

thesearethedominantactivitiesinthe

sharemarketinfuencingshareprices,

stockmarketcapitalizationandsoon

andareunrelatedtolong-termcapital

ormationandgrowth.Thislackoa

relationshipbetweengrowthandstock

marketdevelopmentwasalsonotedin

anearlierstudyinthecontextoIndia

(IndiaMacroeconomicAnnual2008).

Similarly,a1993WorldBankstudyshowedthatstockmarketsonlyplayeda

minorroleinthepost-warindustrializa-

tionoEastAsia.RobertWade(1990),

inhiswell-knownbookGoverningthe

Market,discussedindetailtheroleo

thestateintheeconomicdevelopment

oEastAsia,arolewhichothershave

alsoarguedisarmoreimportantthan

theroleostockmarkets.TheEastAsian

crisiso1997andtheconsequentretar-

dationotheirgrowthowedmuchto

theirnancialopennessandtherelated

speculativeactivitiesthroughtheirstockmarkets.Thecrisisothepresent-day

worldeconomy,ontheotherhand,was

triggeredbyso-callednancialinnova-

tions(creditexpansionthroughsecuriti-

zation)bythebanksanover-expansion

ocredit.

TosumupinthewordsoNobelPrize

winningeconomistRobertLucas:

economistsbadlyover-stresstherole

onancialactorsineconomicgrowth.

PrabirjitSarkarisProessoroEconomicsat

JadavpurUniversity,India.Hecanbecontactedat

[email protected]

John Maynard Keynes

compared stock markets

with casinos

Figure 2:Cross-Country Relationship between Stock Market Listing ofFirms and Growth Rate for 34 Less Developed Countries

(2001-2006 Averages)


11/24

11

MA Research Papers published online

In 2008, ISS started publishing MA Research Papers online.

Due to the success o this, we have decided wed like to

publish as many Research Papers written beore 2008 as well.

I youd like your Research Paper to be available online, let us

know by typing the ollowing link into your browser https://

extensionorm.dabbledb.com/page/mapapersonline/ZIVXpaj

ISS in The Hague

ISS is one o the leading global academic centres or

Development Studies. It is thereore appropriate that ISS is

housed in The Hague: the international City o Peace and

Justice.

Within the city, ISS is strategically

positioned and has undertaken

initiatives and research that support

the position o The Hague as an

international metropolis o peace,

justice and security. ISS has close

links, teaching programmes and

capacity building projects with many

o the international organizations,

ministries, embassies and NGOs in and

around The Hague.

One o these is the 15th International Metropolis Conerence

which will took place in October 2010. This prestigious

international event dealt with questions o migration,

integration and citizenship. ISS was involved in developing

the academic content o the event and hosted two o the

workshops:

Citizenships Initiatives in Social Empowerment - the case o

Laak Noord; coordinated by EFSQ

Realising human rights: towards cities o saety and sanctuary,

coordinated by Helen Hintjens and Rachel Kurian

58th Dies Natalis

This years Dies Natalis took place on 14 October 2010. Apart

rom celebrating the ISS birth date, this years event also

included the Inaugural Lecture o new ISS Rector Proessor Leo

de Haan. The title o his lecture was Development Studies inPerspective: Sharing the Future at

Opening MA programme 2010-2011

The 2010/11 MA programme opened on 9 September. A

total o 180 students have enrolled in the MA programme,

representing 55 countries. The average age is 31 and 57 per

cent are women. India has the highest number o participants

this year with 18 students.

ISS and CDS sign Memorandum of Understanding

The Centre or Development Studies (Trivandrum, Kerala) and

ISS recently signed a new memorandum o understanding

(MoU) to consolidate and deepen 30 years o collaborative

research and capacity building. It covered population issues

under the umbrella o UNFPA global training programme

on Population and Development in the 1980s and 1990s and

more recently on the joint diploma in

Universalizing Socio-economic Security

or the Poor (USS). The main aim o the

MoU is to contribute towards knowledge,

skills and tools or eective policy

analysis o key development issues and

institutional capacity building especially

in relation to the dimensions o human

poverty alleviation through locally and globally sustainable

development processes. For urther details please get in touch

with Dr Mahmood Messkoub [email protected]

Alumni meetings in 2010

Alumni meeting in Tegucigalpa, Honduras in April 2010.

Six alumni meetings where held

around the world this year. From

Ethiopia to Germany and rom

Honduras to Japan, these events

brought together ISS sta and

ormer students in an inormal

setting where news about ISS

was exchanged or an update on

what ISS alumni have achieved

since graduation. More meetings are planned or next year: i

youd like to get involved in organizing a meeting in your area

please contact the alumni ofce at [email protected]

Martin Blok wins Dutchversity prize

Martin received his award at the Dutchversity event in

Amsterdam in May. ISS Welare

Ofcer, Martin Blok won the

Dutchversity Award which is

presented to people who make a

positive contribution to diversity. In

Martins case it was presented or his

work at ISS with the Worldschool

and other projects involving ISS

students, but also or his work

outside ISS such as the sports and music projects he organizes

or children rom dierent backgrounds in his home city o

Rotterdam.

ISS at a glance 2009

What did ISS do in 2009? This question is

answered in the ISS annual report ISS at

a glance 2009 It gives a concise overview

o ISS main activities in 2009 including

details o Doctorate deences, ISS teaching

and public debates. ISS at a glance 2009 is

available rom the ISS website.

ISS Tweets

ISS now also tweets! Follow us on http://twitter.com/issnl

ISS News


12/24

12

Thereisnowlittlequestionthatthe

crisishasaectedmanywomenand

menlivinginpoverty.Shockshavebeen

transmitted,impactshavebeeneltand

responseshavebeenborneacrossall

realmsoeconomicactivity,romthe

nancialeconomytotheormalandinormalproductiveeconomies,through

totheunpaidandpaidreproductive(or

caring)economywherethelabourorce

isnurturedandreproduced,primarilyby

women.Towhatextentarethesevari-

oustremorsgenderedandhowarethey

destabilizingthelivesowomenlivingin

poverty?

Thecrisishasbeengenderedintwo

respects.

numbers

First,thenumbers owomenandmen

aectedbythecrisishasvariedwithin

andacross,eacheconomicsphere.In

EastAsia,womenactoryworkershave

experiencedsomeothemostdramatic

eectsothecrisis,whereasinZambias

copperbelt,predominantlymalemin-

ershavebeenlosingtheirlivelihoods.

Unortunatelyourabilitytoenumerate

theseeectshasbeenlimited.There

hasbeenbothapaucityotimelysex-

disaggregateddataonthepovertyandemploymentimpactsothecrisisanda

lackoeconomicandlabour-orcedata

(whethersex-disaggregatedornot)on

theinormalandreproductivespheres

otheeconomy(wherewomenseco-

nomiccontributionsaregreatest).

Butevencompletelabourandunem-

ploymentdatawouldstillpaintonlya

partialpictureothegenderedim-

pactsothecrisis;explainingneitherthereasonsnortheconsequential

realitiesbehindlabour-orcechanges.

Unemploymenthitspooramilieshard,

regardlessowhetheritisawomanor

manwhoislaido.Butthechanceso

aamilyrecoveringromthissetback

isshapedbythedierentlevelso

bargainingpowerthatwomenandmen

haveinthelabourmarketandtheirdi-

erentresponsibilitiesathome.

norms

Second,then,thesocial normsthatgov-erntherelationshipsbetweenwomen,

menandtheinstitutionswithwhich

theyinteracthavelargelydetermined

howindividualshaveelttheeects

o,andrespondedto,thecrisis.These

relationshipsareprooundlydierent

orwomenandmen.Inmuchothe

labourmarket,orexample,womenare

stillseenassecondarybreadwinners,

makingthemmoresusceptibletobeing

laido,withemployersinglobalsupply

chainsotenignoringoutstandingpayandevadinglegalobligationstogive

noticeandpaycompensation(Emmett,

2009).InThailand,despitesignicant

progressintermsowomensparticipa-

tionintheproductiveeconomy,they

remainstructurallydiscriminatedagainst

intermsooccupationalsegregation

andprejudice,leadingtolowerposi-

tionsandwages(Paitoonpong,etal.

2009).Theimpactothisonworkersand

theiramiliesmaybeunderestimated

igendernormsperpetuatethenotionthatmenaretheprimaryproviderso

amilyincomewhilewomenworkto

earnsmallamountstocoverincidental

expenses.Ahouseholdsheavydepen-

denceonaemalewageisusuallya

signogreaterpoverty,ewerchoices

andlesspowertosurvivecrisis.

Socialnormsnotonlyaectlabour

orce-dynamics;theypermeateall

aspectsosociety.Forexample,in

thehome,thetime-consumingand

non-remunerativeburdenoeedingandcaringorhouseholdtendstoall

disproportionatelytowomen.

Thepreexistingsocialnormsthatlead

togenderinequalitiesincludingthe

under-representationowomenatall

levelsoeconomicdecision-makingand

theirover-representationininormal,

vulnerableandcasualemployment

haveotenhadamoresignicanteect

inaggravatingtheconsequenceso

thecrisisonwomenthanthegenderinequalitiesarisingspecicallyrom

thecrisisitsel.Similarly,prioritiesor

governmenteconomicstimulihave

requentlybeenbasedonapriornorm

thatprioritizessubsidisestoheavy

Gender and the Global

Economic CrisisRichard King

ThebankingcentresoEuropeandNorthAmericamayrsthavebeenshakenbyanancialearthquakealittleovertwoyearsago,

buttheglobaleconomiccrisishassinceseismicallyexpandedtotherealeconomiesocountriesacrosstheglobe.Eachwaveo

impacthasbeentransmittedalonganumberoaultlines,eachwithitsownuniquerhythmandamplitude.Twoyearson,some

economicplatesarealreadysettling,whileothersareyettobeshakenbyscalatershocks.


13/24

13

industryratherthantextileorretailsec-

torsthatemploymorewomen(EWL&

Oxam,2010).

Yettheseunderlyinginequalitiesarenot

static;theyhavebeenexacerbatedby

acomplexwebosudden-onsetshocks

andlonger-termtraumasonwhichthe

economiccrisishasbeensuperimposed.

Theseincludeoodanduelprice

shocks,changingclimaticconditions

andtheHIVandAIDSpandemic.Some

otheseordealsareinterlinked,others

areindependentooneanother;all

haveaddedtothemarginalizationo

womenlivinginpoverty.

Butwhilsttherearesignsthatthe

economiccrisishasreinorcedmany

existinggendernormsanddeepenedinequalities,thereisalsoevidencethat

someothesenormsaredecomposing

andbeingcalledintoquestionbythe

crisis.Forexample,menwhondthem-

selvesunemployedasaresultothecri-

sismaytemporarilytakeonroleswithin

thereproductiveeconomythattheyare

notaccustomedto,suchascookingthe

amilymeal.Amongstaectedsheanut

gatherersinGhanamenarenewlybeing

askedtocontributetowardsamilyood

(Dogbe&Marshall,2009).InVietNam,thegenderdivisionolabourhasbeen

breachedamongsomedaylabourers

sincetheonsetotheeconomiccrisis

aswomenhavebeenorcedtoaccept

constructionjobsthatareusuallythe

preserveomen.ResearchbyOxam

suggeststhat,withlimitedsourcesoo-

cialsupport,crisis-aectedworkersin

Hanoismobileday-labourmarkethave

developedaverystrongsenseocom-

munityandhaveadoptedarangeo

inormalcopingstrategies.Bothwomen

andmenotenworkinagroup,receiveequalpayandsharelivingexpenses

bylivingwithellowmigrantsromthe

samevillages.Whetheranygender

normswillbetransormedonaperma-

nentbasiswiththetraditionaldivi-

sionolabour,andmensandwomens

overallworkburden,beingrenegotiated

withinboththereproductiveandpro-

ductiveeconomiesremainstobeseen

(KingandSweetman,2010).

increased informalization

Forbothmenandwomen,theeconom-

iccrisishasresultedinincreasedinor-

malization.Researchconductedbythe

InclusiveCitiesprojectontheimpacts

othecrisisontheinormaleconomies

o10developingcountriesoundthat

60percentointervieweesbelieved

thatthemajorityonewentrantstotheir

particularinormalsectorwerewomen.

Thisisthoughttobebecausewomen

employedintheormalsectorhold

themostprecariousjobsandaremost

vulnerabletobeinglaid-oduringeco-

nomiccontractions(Horn,2009).Former

actoryworkersinThailand,orexample,

haveturnedtoinormalhome-based

work,whileelsewhere,laid-owomen

havebeguntocookoraliving.Initial

analysissuggeststhatstreetvendorsin

severaldevelopingcountriesaresuer-

ingromthetwinsqueezesoincreased

competitionromretrenchedworkers

turningtoalivelihoodwithlowbarriers

toentryandreducedconsumerdemand

aseconomiescontract.Home-based

workershavesimilarlysueredroma

reductioninexportdemand,areduction

inpayratesorpieceworkandrombe-

ingundercutbynewmigrantentrantsto

themarket(Horn,2009).Bothmustalso

contendwithhigherbusinessoperating

costsaswellasreducedearnings.

Inspiteothesediculties,inormal

workremainsanecessityormany

womenastheyhavebeenletwithew

otheralternativesbytheirpersonal,

socialandeconomicmarginalization.In

Pakistan,orexample,InclusiveCities

home-basedintervieweesliveinan

areawherewomenarediscouraged

romworkingoutsideothehomeeven

thoughmanyworkerspossesspecialist

Sasithorn, 29, former factory worker skips meals so that her children

can eat three meals a day. She now baby-sits other workers children.


14/24

14

skillsthatcouldincreasetheirincomes

(Horn,2009).Butevenwherewomen

canworkinormallyoutsidethehouse,

theeconomiccrisishasorcedthemto

worklongerhours,givingthemlesstime

toullthesocialreproductionroles

theyarealsocommittedto.

resilience and social capital

Nonetheless,oneothemoststriking

ndingsoOxamsresearchonthe

economiccrisis(across12countrieson

vecontinents)istheextenttowhich

communitieshave,thusar,beenable

toresistorabsorbtheshockstheyve

aced.Inasurprisingnumberocases,

migrantshavenotreturnedtotheir

villages;householdshavebeenableto

eedthemselvesromtheirgardensor

arms;mostpeoplehavekepttheirjobs,albeitwithlowerwages,ewerhours

andworseconditions;andamilies

havemanagedtokeeptheirchildren

inschool.Familyandsocialnetworks

havesharedoodandlenteachother

money(Greenetal.,2010).Inthecase

oVietNam,Hanoisdaylabourershave

developedjob-sharingarrangements;

witheweropportunities,labourershave

beencompelledtotakewhateverjob

opportunitieshavebeenavailable,yet

theyhavealsobeenwillingtosharetheworkaswellasinormationabout

employmentopportunitieswithoth-

ers,therebysacricingsomeotheir

ownpotentialincome.Labourershave

alsoborrowedmoneyromeachother

duringidledays.Thoughtheseinormal

copingmechanismsareinsucientto

maintainthesamelevelsoincome

thattheypreviouslyreceived,theydo

atleastprovideaverybasicmeanso

subsistenceandeasethelivesopoor

emaleandmaleworkersandtheirde-

pendents(Paitoonpongetal.,2009).

Mostpeoplelivinginpovertyhave

relied,whetherthroughchoiceorother-

wise,ontheirownnetworksoriends,

amily,neighbours,religiousbodies,

orcommunityinstitutionstoweather

thiscrisis.However,withoutaccessto

adequatesocialprotectionthisappa-

rentresiliencehasitslimits.Assets,

oncedepleted,takeyearstorecoup;

workingextrahoursinsecondorthird

jobsleavesalegacyoexhaustion;loanstakenontonanceconsumption

accumulateintocrushingdebtburdens;

andmealsoregonecanaectchildren

ortheirentirelietimes.

Aswomenaretheprimarycarersin

virtuallyallsocietiesandaremainly

responsibleormanaging,produc-

ingandprocessingood,theyarealso

expectedtondwaysoensuringtheir

householdssurvival.Manywomen

arethereorepayingaparticularprice

throughtheiradditionalunpaidworkto

supporttheirhouseholds.Forwomen

especially,thetwinpressuresoproduc-

tiveandreproductiverolescanquickly

becomeoverwhelmingintimesocrisis;

itdoesnottakemuchorcopingstrate-

giestotipoverintoaormosel-de-

eatingdesperation.Wherewomenare

providingsaetynetsortheiramilies

anddependentswithoutadequatestate

support,theirtangibleandintangible

assetsarebeingdepletedandtheir

essentialbasicneedsoroodandsleeparebeingoregone.Wherehouse-

holdsareorcedintodistresssaleso

theirreserveassets,womensaremore

vulnerablethanmens.Researchbythe

InstituteoDevelopmentStudiesinto

theood,uelandnancialcriseshas

uncoveredsignsthatgenderinequities

inthedistributionohouseholdresour-

cesareworsening(IDS,2009).

Additionally,womensstocksosocial

capital(orexamplesocialnetworks

thatpotentiallyoermutualhelpand

support)areerodedduringtimeso

economiccrisis.Neitherwomensnor

mensstocksosocialcapitalarelimit-

lessandneithercansubsidisethecostoeconomicimpoverishmentindenite-

ly;whenassetsareullydepleted,social

capitaldriesup.Butaswomentypically

havelessaccessto,andcontrolover,

nancialandphysicalcapital,theytend

torelymoreheavilyonsocialcapitaland

playamoreactiveroleingenerating

itthandomen.Whenhouseholdsare

pittedagainsteachotherinastruggle

orsurvival,andwhentheirtimeisat

suchapremium,itisotendicultor

womentondthetimetonurturetheserelationships.

Theextentotheapparentresilience

thatwomenaredisplaying,orthe

degreetowhichitwillactuallyerode

uturelivelihoodchancesandchildrens

cognitivedevelopment,dependstoa

largedegreeonthelevelobuering

providedbyappropriatepublicex-

penditureandsocialprotectionmeas-

ures.Worryingly,romthisperspective,

someothemostsevereimpactsothe

crisisorwomenmay,perhaps,stillbe

emerging.

Worse yet to come?

Budgetanalysisrom24poorcountries

withsocialspendingdetailsavailable

suggeststhat,inordertoreinintheir

wideningscaldecits,18countries

arecuttingbudgetallocationstoone

ormoreotheprioritysocialsectorso

education,health,agricultureandsocial

protection.Educationandsocialpro-

tectionareparticularlybadlyaected,withaveragespendinglevelsin2010

lowereventhanthosein2008(Kyrili

andMartin,2010).Suchcutsarelikely

todisproportionatelyburdenwomenas

emaleshavebothprimaryresponsibility

oramilywellbeingandcomprisethe

majorityopublicsectoremployees.

Eachsuccessivecrisisdepletesthe

copingcapacities,bothphysicaland

psychological,opeopleandcommuni-

tieslivinginpoverty.Butthedeptho

resilienceandthedegreetowhichit

willbolsteruturedevelopment,areto

alargeextentdeterminedlongbeore

eachcrisisactuallystrikes.Twoyears

onromtheinitialnancialshockthere

isanurgentandparticularneedtotop-

upthesesourcesoresilienceandto

reorganizesopeopleareabletoretain

orenhancetheirabilitytodealwiththe

nextlargeshockbeoreitarrives.Policy

responsestodatehavetoootenailed

toadequatelyconsidereithertheneeds

opeoplelivinginpovertyorhowtheymightbegintoaddressthegender

inequalityinpower,workloadandop-

portunitiesthatexacerbatewomens

experienceotheworldsmultiplecrises.

Unlesspolicyresponsesaresuciently

attunedtoprovidingholisticsolutions

thatchallengethegender-biasedstatus

quo,ratherthansimplyprovidingtem-

poraryrespiteromthesymptomsojust

onecrisis,womenwillbeincreasingly

vulnerabletoeachsuccessivecrisis.

RichardKingisaPolicyResearcherwithOxamGB.

[email protected]

menmay temporarilytake on roles within the

reproductive economy


15/24

15

Atthesametime,theNewYork-based

consultingrmCatalyst(2008a)ound

thatwomenheldjustover15percento

alldirectorshipsatFortune500com-

panies.Othese,66companieshadno

womenboarddirectorsatall,andonly

92companieshadthreeormorewomen

boarddirectorsin2008.Catalyst(2008b)

alsooundthatwomenheldjustunder

16percentocorporateocerposi-

tionsattheFortune500topcompaniesinthesameyear,comparedwithjust

over6percentotop-earningpositions

inthosecompanies.Atthesametime,

therewere75Fortune500companies

withnowomencorporateocersatall.

Thenancialworldisincrisis.Andthe

eectsontherealeconomyareseri-

ousandglobal.Oneothepossible

explanationsorthisisthatunbridled

masculinebehaviourhasledtobusi-

nesspracticesthathaveprecipitated

collapse.Thisshortarticlearguesorthedesirabilityoabalancebetween

eminineandmasculinecharacteristics

inthebankingworldandsuggeststhat

someimportantlessonscanbedrawn

romthecreditcrisisinthisrespect.

gender diversity as a factor of

success

Thereisinallthisapitiullymissedop-

portunity.Onedoesnothavetobean

ardenteministtorealizethathaving

morewomeninhighrankingposi-tionsinbusinesswillpromotedierent

outcomes.Genderdiversityisaproven

actorosuccessinthebusinessworld

(Joy,Carter,WagnerandNarayanan,

2007;Lckerath-RoversandVanZanten,

2008;McKinsey2008).Psychological

testssuggestthatamanwithoutstress

canassessriskbetterthanawoman

withoutstress,buttestsalsosuggest

thatinsituationsostresssoperva-

siveinthebankingandnanceworld

-theoppositehasbeenoundtobe

thecase(vandenBos,Harteveldand

Stoop,2009).Whatlessonscanwe

drawromallthis?Itseemsthatdur-

ingstableeconomicperiods,typicallymalecharacteristicsmaybeparticularly

useultoosterinnovationandencour-

agehealthyrisk-takingwhichcanhelp

topromoteoveralleconomicgrowth.

However,duringmoreuncertainperiods

oeconomicinstability,moreclassically

emaleinputssuchascautionand

caringmaybeevenmoreessentialthan

risk-taking,whichcanaggravatereces-

sionaryresponses.Arangeoeconomic

experimentshavesuggestedthatmixed

teamsomenandwomenactually

perormbestacrosstime,andorthis

kindoreason:suchteamsaremore

abletodealandrespondtobothstable

periodsandunstableperiodsoboomandbust(Gratton,2007;Kamas,Preston

andBaum,2008;Sent,vanStaverenand

Vyrastekova,2009).Toputitbluntly,we

aretalkingaboutwomenbeingessential

tohardeconomicsandnotonlyabout

sotissuesowomensliberationand

proessionaldevelopment.

potential concerns

YetitisBritishemaleeconomistBlythe

Masterswhoiscommonlyheldrespon-

sibleorcreatingCDSs(CreditDeault

Swaps)aswellasCDOs(Collateralized

DebtObligations).Shethusappears

tobeoneotheculprits,guiltyo

engineeringintoplacethecurrentcreditcrisis.WasntitalsoDutchemale

businesswoman,NinaBrink,whohad

ahighlyquestionableroleintheailed

initialpublicfotationotheinternet

companyWorldOnline?Perhapsso,

butmaybethesewomenoperatedin

thiswaybecausetheyttedintoavery

dominantlymaleculture,tomaintain

theirpositionsandtoprovethemselves

theequalsotheirmainlymalecol-

leagues.Womenneedtobepresentin

acriticalmassinorderortheircontribu-

tiontobecomeapparentandpalpable.Ithasevenbeensuggestedthatwomen

onlystarttoberegardedasindividuals

intheirownrightoncewomenmakeup

atleastonethirdothebusinessteam

(ChestermanandRoss-Smith,2006).

Inotherwords,adistinctioncanbe

drawnbetweenemaleandeminin-

ityandbetweenmaleandmasculinity.

PlaceonewomaninaBoard,andone

tendstoobservethatherbehaviourwill,

throughpeerpressure,becomemoremasculinethaneventhatosomeo

hermalecolleagues.Thiswillbeher

eorttotintothenewenvironment.

PlacetwowomeninaBoard,theywill

otenkeepadistanceromeachotherin

The crisis as an

opportunity or

emale leadership

Esther-Mirjam Sent

TheWorldEconomicForumsgenderreportor2010showedthatinthe20countries

surveyed,only2percentoCEOsintheFinancialServices&Insuranceindustrywere

emale.Thiscomparedwith6percentoverallindustriesorthesamecountries

(ZahidiandIbarra,2010).

..women have to first

jump off a glass cl iff


16/24

16

ordertoavoidtheimpressionthattheir

collaborationisaconspiracy.Onlywith

threeormorewomeninaBoardcana

culturestarttobecreatedinwhichitis

thinkableanddoabletodisplaysome

othecharacteristicsthoughtoas

typicallyeminine.Someothequali-

tiesthatwomencanbringtobusiness

environmentscanthenstarttoassert

theirpositiveinfuence.Perhaps.

deeply ingrained prejudices

Sincediversityisaprovenactorosuc-

cess, why then do more prot-minded

companies not hire more top women?

Thereasonscanbeoundindeeplyin-

grainedprejudicesaboutwomenamong

male executives. This is expressed, or

instance, in an experiment

inwhichtwoanonymousap-plication letters were shown

toa group omalesubjects

(Norton,VandelloandDarley,

2004). One candidate had a

better education, the other

had more work experience.

Theexperimentshowedthat

75 per cent o all subjects

chose the candidate with a

better education. But when

thenames o the applicants

werepresentedandthecan-didate with a better educa-

tion was a woman, only 44

percentoallsubjectspoint-

edtoeducationasthemost

relevantactor.Otherexperi-

mentsshowthatawomanis

valuedlesswhenthereisonly

one emale candidate, but

thatajobitselisvaluedless

whentherearethreeormore

emale candidates (Heilman,

2001). Some research also

suggests that recommenda-tion letters or women tend

to be ormulated dierently

(Trix and Psenka, 2003). For instance,

they tend to be shorter and include

lessrepetitionostrongwordslikeout-

standing,excellent,andsuperbthan

the letters written or men. Moreover,

whereasmenareportrayedmoreasre-

searchersandproessionals,womenare

generallycommendedortheirteaching

andtraining.

Theideathatwomenarenotnatural

leadersisadeeplyingrainedprejudice,

asshowbyanotherexperiment(Porter,

LindauerGeisandJennings,1983).A

groupomenorwomenwereputat

arectangulartableandsubjectswere

askedwhotheythoughtwouldbethe

leaderothegroup.Themajorityothe

subjectspointatthepersonatthehead

othetable.However,ithesubjects

areinamixedpartyandawomansits

attheheadothetable,mostmenand

womenwillpointatamanwhoissitting

elsewhereasthepotentialleaderothe

group.

Suchdeeplyingrainedprejudiceswill

persistaslongasbusinessisdominated

byamalecultureandcompanieswill

ndithardtoidentiyorattractsuitable

emalecandidatesorhighrankingposi-

tion.Womenwhoadjust,willcontinue

toberegardedascompetent,but

unkind.Womenwhodonotadjust,will

beregardedasincompetent,but(orbe-

cause)nice(Heilman,Wallen,Fuchsand

Tamkins,2004).

Tobreaktheso-calledglassceilingand

reachthetop,womenhavetorstjump

oaglasscli,sincewomenwillmore

otenthanmenbeputintoahighly

riskymanagementposition,wheretheirchancesosucceedingareveryslim

(RyanandHaslam,2005).Experimental

researchagainsuggeststhatinpros-

peroustimes,so-callednormaltimes,

mostsubjectspreeramaleleaders,

butduringcrisis,mostpreerawoman

(RyanandHaslam,2007).Asaresult,

womenaremorelikelytobeputina

dicultmanagementpositionandcan

ndthemselvesontheedgeoaglass

cli.

the crisis as an opportunity

Argumentsorincreasingthenum-

berowomeninleadershippositions

havebeenaroundorsometime.Yet

littlehasbeendonetoworkonthose

insights.Thecreditcrisiscanbea

chancetorevivethosearguments

oremployingmorewomeninsenior

management.Sincethenancialworld

iscompletelydominatedbymen,itis

clearthattheiractionshavebeenthe

maincauseothecredit

crisis.

Toputitcrudely,there-

ore,thebehavioural

characteristicsthathave

causedthecrisistospin

outocontrolaretypi-

callymalecharacteristics,

includingexaggerated

optimism,over-devel-

opedgreed,irrational

levelsorisk-seeking

behaviourandalacko

condence.Houseown-

erswereoverlyoptimistic

aboutrisinghouseprices

andthengreedylenders

tookenormousrisksinis-

suingmortgagestoover-

condentpotentialhome

owners.Oncecon-

dencebegantocrumble,

thenancialworldwas

shatteredintopieces

andlostcondencein

previousstrategiesbasedonpreviouscalculations

orisk,lossandprot.

Researchsuggeststhatonthewhole,

menaremoreotenoverly-optimistic,

excessivelygreedy,andrisk-seeking,

andhavelesscondenceinothers,than

women(CrosonandGneezy,2009;Eckel

andGrossman,2008).

Alongwithsomeomycolleaguesin

theEconomicsDepartmentatRadboud

UniversityNijmegen,Ihavelookedintotherisksthatmenandwomen

takeinplayingthegameshowDealor

NoDeal.Theshowrevolvesaround

luck,courage,strategyandthearto

stoppingattherighttime,ratherthan


17/24

17

continuingtothrowallonesluckaway.

Thepresenterhelpscandidatestode-

cidewhethertheywilla)riskeverything

ortherstprizeo250,000Euros,or

closeadealwiththebank.Itheygoor

therstprize,theyalsoriskhavingnoth-

ingtotakehome.Inourownanalysis

o120episodes,weoundthatwomen

weremorelikelytoacceptasaebet

andstopplayingthegamethanmen,

whotendedtocontinueuntiltheylost.

Acceptingthesaebetgraceully,

meantthatonaveragewomencontes-

tantswonanaverageoaroundtwiceas

muchasthemencontestantsForthose

womenwhodidcompletethegame,

theyendedupwithabiggerpay-o

thanmenaswell(Sent,Groenendijk,

Roosendaal,Vyrastekova,2008).

the crisis as a danger

Thecrisisthusoerssomeopportunities

orwomentobecomemoreimportant

inleadershippositions,especiallyinthe

developedworld.Butatthesametime,

itposesadangerormanywomenand

girlsindevelopingcountries,whoare

hitespeciallyhardbythecrisis.Therst

jobcutswereconcentratedinsectors

inwhichmillionsoyoungwomenand

girlsareemployed,especiallyinexport-

relatedindustries,orexampleinChina.

Youngwomenandgirlsarethenorced

toremainathomewithoutworkand

tohelpinthehome.Sincethestarto

thecrisis,thereisalsoevidencethatthe

childdeathrateisincreasing,especially

amonggirlchildren.Moregirlsand

womenwillalsobeorcedtocompete

inasexindustryalsohitbyallingde-

mandandallingincomes.

Thisisaseriousdangerbecausegirlshavetheuture.Educatedyoungwo-

menindevelopingcountriescanearn

moreorthemselvesandtheiramilies

(anestimated10percentmorewith

eachadditionalyearoprimaryschool-

ing;25percentwitheachadditional

yearosecondaryschooling).Women

willalsohavehealthierchildrenthelon-

gertheycanremainineducation,and

theirgirlchildrenwillbemorelikelyto

gotoschoolthemselves.Thiscanhelp

toimproveagriculturalproductionand

todecreasemalnutrition,sincewomen

tendtoinvestahighproportionupto

90percentotheirincomebackinto

thehousehold.Men,bycontrast,tend

toinvestjust30to40percentotheir

incomedirectlybackintothehousehold

(PlanInternational,2008).Whatismore,

acrossdevelopingcountries,ithasbeen

estimatedthatigirlshadthesame

educationalopportunitiesasboys,the

resultcouldbeanincreaseineconomic

growtho92billiondollarsperyear

(PlanInternational,2008).

conclusion

Loesje(aamousDutchopinion-maker)

wiselywrote:Childrenaretheuture,as

longastheirmothersgetauturetoo.

Sincediversityingendertermshasbeenproventobeaactorinbusinesssuc-

cess,thelackowomeninhighranking

businesspositionsmaybeanoppor-

tunitywhichitwouldbeapitytomiss.

Thecurrentcrisismakesthecontrast

betweenthesetopexecutivewomens

choicesandthechoicesopoorwomen

acrosstheworld,includingindevelop-

ingcountries,allthemorepainul.

Esther-MiriamSentisProessoroEconomicTheory

andPolicyatRadboudUniversityNijmegen.

6 new professors at ISS

Thanks to the Vereniging Trustonds o Erasmus University

Rotterdam, ISS has been able to appoint six new proessors.

One o the aims o the Trustonds is to advance scientifc

research and education, in particular by establishing

(special) proessorial chairs. The ISS now has a total o 18

proessorships.

The inaugural lectures have already or will take place this yearor early next year.

Wil Hout - Proessor o Governance andInternational Political

Eeconomy (27 May 2010)

Max Spoor - Proessor o Development Sudies in Particular

Regarding Economies inTransition (30 September 2010)

Peter Knorringa - Proessor o Private Sector and Development

(4 November 2010)

Karin Arts - Proessor o International Llaw and Development

(18 November 2010)

Des Gasper - Proessor o Human Development, DevelopmentEthics and Public Policy (16 December 2010)

Irene van Staveren - Proessor o Pluralist Development

Economics (20 January 2011)

New and departing staff

Jan van Heemst Senior lecturer in Development Economics,

Gerrit Plugge Head Internal Services and Maureen Koster -

PhD ofce have retired ater many years at ISS.

Other staff leaving are: Kristine Komives - Senior Lecturer

in Rural Development, Environment and Population Studies,

Frances Morris Project Ofcer at ORPAS, Faroel Ibrahim -Finance Ofce.

New members o sta include Paul Huber who has joined

ORPAS andWim Geppaart to the Finance Ofce. Silke

Heumann started work as lecturer in the feld o Women

Gender and Development. Kristen Cheneyis our new senior

lecturer Children and Youth Studies.

In November more sta will be joining ISS - Susan Newman

as lecturer International Economics/Macroeconomics, Luca

Tasciotti, Post-Doctoral Researcher and Diederik Meijering as

senior Project Administrator.

Sta News

diversity in genderis a

factor in business success


18/24

18

introduction

First there was no market.TheHerman

CosterstraatMarket(HCM)wasestab-

lishedmorethanseventyyearsagoat

theinitiativeotheMunicipalityoTheHague(MTH)aterlengthynegotia-

tionswithvendors.Initially,vendorshad

beenopposedtotheideaomoving

romtheiroriginalmarketplaceinthe

veryheartothecitytotheHerman

Costerstraatarea(atthattimeparto

thesuburbs),earingthemovewould

decreasetheirsales(Vonka,Municipal

Archives,2009).Nowadays,however,

theHCMisatthecentreoanareathat

hasbeentransormedromsuburbia

intoahuboeconomicandsocialactivity,andwithmorethan500stalls

itissaidtobethelargestopenstreet

marketinEurope.

Byprovidingtheleadershipandthe

servicesthatacilitatedandsupported

therapidgrowthotheHCMandthe

developmentothearea,andbycreat-

ingaregulatoryrameworkthatallowed

thedierentactorstointeractwitheach

other,theMTHlaidtheoundationsor

apeaceulcoexistencethathasben-etedallactorsinvolvedintheprocess.

Thesynergiesamongthedierent

actorspresentattheHCMaretoalarge

degreetheresultoaprocessinwhich

theMTHhasleadandaccompanied

thedevelopmentothemarketven-

dors,whileatthesametimeattending

totheneedsandinterestsothelocal

communityandotherbusinessesinthe

periphery.

Locatedstrategicallybe-

tweenAmsterdamandRotterdam,TheHaguehaslongbeenaworldcity,a

placeoculturalandcommercialconfu-

enceandexchangedespiteitsrelatively

smallsize(thepopulationislessthan

halamillion).Inordertoadapttothese

circumstances,theMTHhasovertime

beenrequiredtogobeyondtheprovi-

sionopublicservicestraditionallyas-

sociatedwithlocalgovernmentstobe-

comeacentralandleadingactorinthe

processolocaldevelopment.Through

anexaminationotheapproachbytheMTHtothedevelopmentandadmin-

istrationotheHCM,theaimothis

articleistobetterunderstandhowlocal

governmentscanmeaningullycontri-

butetoprocessesolocaldevelopment.

The Local Government as a

Central and Leading Actor o

Local Development: The case othe Herman Costerstraat Market

in The Hague

Sergio Ferragut

Governments are in a position to make markets and

competition work better, by taking the lead in making

business easier and less expensive and in determining

the nature and level of regulation (ILO, 2007).

HermanCosterstraat,TheHague;MTHArchives,1920


19/24

19

the ever-evolving role of

local governments

AsrecentlysustainedbyNeland

Binns,localgovernmentisexpected

tomaximizesocialdevelopmentand

economicgrowth,tohelpensurethat

localeconomicandsocialconditionsare

conducivetothecreationoemploy-mentopportunities,totakealeadership

role,involvingcitizensandstakeholder

groupsinthedevelopmentprocessand

tobuildsocialcapitalandgeneratea

senseocommonpurposetondlocal

solutionsorsustainability(Neland

Binns,2001:357).

Localgovernmentsareusuallyrespon-

sibleorarelativelysmallgeographical

area,whichallowsthemtobeclosein

proximitytotheirconstituents.Asare-

sult,theyareinaprivilegedpositiontounderstandtheshortterminterestsand

needsotheircitizens.Implementing

policiesaimedatregulatingthedaily

complexrelationsomultipleactors

whileachievinganinclusivelongterm

visionordevelopmentrequireslocal

governmentstotakeaproactiveap-

proachbeyondtheprovisionobasic

services.Inordertoexploitthesyner-

giesandopportunitiesthatresultrom

localinitiatives,itismostimportantthat

theytakeacentralroleinregulatingtherelationsamongtheactorspresent.

AsNederveenPieterseoncesuggested,

agglomerationincreasestheproductivi-

tyoawide-rangingnumberoeconom-

icactivitiesinurbanareas.Essentially,

agglomerationallowsrmstoexperi-

encethebenetsobotheconomieso

scaleandscope(Pieterse,2000:8).For

agglomerationtoreapitsbenets,

stronginstitutionsandtheprovisionoa

clearregulatoryramework(thatisinline

withthelongtermvisionordevelop-ment)mustbepresent.

running an open market

WithintheMTH,responsibilityortheadministrationandcoordina-

tionosupporttothecitysseven

streetmarketslieswiththeOceor

theAdministrationoStreetMarkets

(OASM).Theservicesprovidedtothe

HCMincludecleaningandmaintenance

othemarket,runningawell-organized

transportationnetwork,providing

parking(currently470spacesunder

theHCM),toilets,policing,settling

disputesamongvendors,customers

andresidents,andprovidingaccesstoelectricityandrunningwatertoallstalls

(InterviewswithThelma,PoliceOcerat

theHCM,2009;Maria,OASMcleaning

staattheHCM,2009;Marieke,OASM

sta,2009).

Rulesandregulationsgoverningstreet

vendinghavebeeninplaceinThe

Haguesince1856,whenrstintroduced

bytheMTH.Overtime,thesehave

beenmodiedtoadapttothechanging

natureobusinessandsociety,mostre-

centlyin2004(MunicipalArchives,2009).

TherulesgoverningtheopenmarketscanonlybemodiedbytheMTH,and

areadministeredatthemarketlevelby

theOASM,thusacilitatingthemonitor-

ingoactivitiesandensuringanearly

responsetoconficts.

Bycoordinatingprovisionoservices

andcreatingandadministeringaclear

andtransparentregulatoryramework,

theMTHhasleadandacilitatedthe

sustainabledevelopmentotheHCM

anditssurroundingarea.Bybeingclose

inproximitytothevendors,theMTHhasbeenabletoensuretheirneeds

areattendedtowhilepreventingthe

escalationoconfictsandgrievances.

Similarly,bytakingresponsibilityor

thedailyadministrationothemarket,

theMTHhashelpedvendorskeepthe

marketorganizedandrunning,thus

contributingtothemaintenanceand

creationoemploymentopportunities

the sellers

Approximately550vendorsheldOASM-issuedpermitsattheHCMin2009.

Permitsareissuedorthreeyearsinthe

rstinstance,andareeitherrenewed

automaticallyorinheritedbyam-

ilymembersithepermitholderdies

TheOpenMarket,TheHague;OASMwebsite,2009,

HCM local government

that went beyond its

traditional role


20/24

20

(MTHwebsite,2009).Onceapermitis

obtained,dailyrentsarequitelow,be-

tween7and16eurospermarketday.As

wellaspayingrent,vendorspayincome

taxesbasedonthekindsoproducts

theysell.Insum,operationalcostsare

low,meaningthatvendorscanstarta

business(itheycangetastall)with

relativelysmallamountsocapital.

HCMsellersarerepresentedbytwo

organizations:CentralAssociationor

AmbulatoryTrade(CVAH),established

in1921andmainlyrepresentinglong-

establishedvendorsoDutchorigin,

andVETRA,amorerecentlyormed

organizationthatgroupsmainlynon-

Dutchvendors.Despitethepresenceo

theseorganizationsattheHCM,most

vendorsarenotthateagertotakepartandvoicetheiropinionsasagroup.The

outcomeisadistinctlackoorganiza-

tionalcapacityamongmarkettraders

tomakestrong,consensualdecisions,

andaweakbasisorcollectiveactions

todeendtheircommoninterests.

Themarketspaceisdividedinto

separateareasinwhichdierenttypes

oproductsaresold.Vendorsrom

similaroriginscanendupsellingsimilar

productsandbelocatedinadjacentornearbystalls.Withineacharea,stallsare

assignedonthebasisohowestab-

lishedvendorsare,andmanystallsare

runbymembersothesameamily.This

contributestoarelaxed,inormalatmo-

spherewherestallholderscompetition

canbemutedbyinter-connections.

customers and the local

community

Themarketisaspaceoreconomicac-

tivityandsocialinteractionandintegra-

tion.Itcreatesnotonlyjobsandincomebutalsolinksamongpeopleandactors

thatcanleadtoincreasedandbetter

economicandsocialdevelopment.

Keepingthisbalanceamongalltheac-

torspresentintheHCMandsurround-

ingareaistheresponsibilityotheMTH.

Over150,000customersromthecity

andbeyondvisittheHCMeveryweek

(OASMwebsite,2009).Manycustomers

choosetoshopatthemarketbecause

othehugevarietyoproductsavail-ableatpricesthataregenerallyvery

competitive.Migrantsespeciallyshop

theretondproductsthatrelatetotheir

dietandliestyles.Othercustomersare

inthemarketsimplybecausetheyenjoy

thebustle,theexperience,thecrieso

thesellers.Evenpeoplenotthatinter-

estedingettingtheirweeklygroceries

willcometothemarkettobrowse,to

goshoppingcasually,orgitsorex-

tras.Manystallsoergoodsorpassing

customers,includingarangeosnacks

anddrinks.

Alargenumberopeoplecometothe

HCM,andtheOASMtriestominimize

negativeeectsonlocalresidentsinthe

immediateneighbourhood.Sometimes,

however,therearecomplaintsrom

residentsandbusinesseslocatedinthe

peripheryothemarketandtheOASM

isresponsible,intherstinstance,or

receivingsuchcomplaints.Themost

commoncomplaintsrelatetovendors

carsandtrucksblockingthestreetsaroundthemarketorentrancesto

privatehouses.Also,onmarketdays

thereisanincreaseinreportedpetty

crime,mostoitinsidethemarketarea

itsel(Marieke,OASMsta,2009).In

response,aspecialunitotenpolice

ocershasbeensetuptopatrolthe

marketfoorandsurroundingstreetson

marketdays(Thelma,PoliceOcer

attheOASM,2009).Sincethereisno

consumerassociationandnoresidents

orneighbourhoodassociationaroundtheHCM,bydeaulttheMTHisalso

responsibleorensuringresidentsand

customersrightsarerespected.

businesses in the periphery

Commercialactivityandsocialinterac-

tionisnotlimitedtothemarketitsel

asmanyshopslocatedintheperiphery

otheHCMoerproductsandservices

tomarketcustomers.Someothese

shopshavebeenintheneighbourhood

oraewyearsbutmosthaveopened

recentlytoservethehugenumberocustomersvisitingtheHCM.

ThecontrastbetweenvisitingtheHCM

areawhenthemarketisopenand

closedissignicant.Whenthemarketis

closed,theewshopsthatremainopen

areusuallyrunbytheirownersonly,who

mostlyspendthedayreorganizingor

cleaningtheshopwaitingorthenext

daythatthemarketisopen(Hussein,

MoneyTranserService,2009).

Whilesupportingthegrowthothe

HCM,theMTHhasthereorealsocre-

atedtheconditionsorotherbusinesses

intheperipherytofourish,astheydi-

rectlybenetromtheservicesprovided

(publictransportationandsecurity,or

example)andthecustomersvisitingthe

areaeachweek.

conclusion

First there was no market.Bytakingthe

leadandbecomingacentralactorin

theprocessoestablishing,regulating

andadministeringtheHCMandthe

relationsandinterestsothevarious

actorspresentinthearea,theMTHhas

contributedtothesustainabledevelop-

mentotheneighbourhoodandthe

city.Intheearly1900s,nothingcould

haveindicatedthepotentialothe

HermanCosterstraatarea.Itwasthe

long-termvisionandcommitmentothe

municipalitytothedevelopmentothe

areathatinitiallytriggeredandthencar-

riedontheprocessthatresultedinthesuccessulstoryothemarketandthe

neighbourhoodthatwewitnesstoday.

ThecaseotheHCMisthusanexample

olocalgovernmentthatwentbeyond

itstraditionalroletobecomeacentral

andleadingactorintheprocessolocal

andcommunitydevelopment.

AsorthelimitationsotheHCM

experience,itisimportanttohighlight

thelackoauniedrepresentativebody

thatcouldeectivelyguaranteethatthe

voicesandinterestsoallthevendors

areincludedandconsideredwhenmak-

ingdecisionsandtakingpositionsinne-

gotiations.Thislackhamperseortsto

achievecommonlong-termbenetsor

allvendors.Whoshouldberesponsible

ortakingthatinitiative,isaquestion

thatremainsopen.

Asannouncedin2010,theHCMarea

willsoonbecompletelyreurbished

aspartothecomprehensiveurban

developmentplansturningtheLine11tramzoneintooneoworldworking

andliving(translatedromtheDutch).

Fromthemunicipalitysperspective,

thechallengeortheutureisonce

againtounderstandhowitcankeep

contributingtotheurtherdevelopment

andimprovementothemarket,while

remainingsensitivetotheneedsand

interestsoallactorsinvolvedandpres-

entinthearea.

SergioFerragutgraduatedromISSin2009withanMAindeveolopmentstudies.Hespecializedin

LocalandRegionalDevelopment.


21/24

21

the rise of generation text

In2001,thePhilippinesgrabbedthe

worldsattentionwithanexampleo

PeoplePowerwhichledtotheoust-

ingothecountrysleader.Morethana

millionpeoplegatheredatthehistoricEDSAAvenue,siteotherstPeople

Powerin1986,toexpressoutrage

againstwhattheyperceivedtobema-

nipulationothecountrysrstimpeach-

menttrialagainstapresidentbyhis

alliesinthesenate.

Themobilephoneservedasthemega-

phonewhichcalledpeoplebackto

EDSA.Theappealtoprotestspreadlike

wildreromonecellphonetoanother.

Non-governmentorganizations,church

groups,universitiesandotherinstitu-tionsconverged,withalargenumber

romtheyouthsector.

EdericEder,ayouthactivist,postedan

articleonhisbloginwhichhewrote

aboutyouthparticipationinthePeople

Power.InFilipino,hewrote:

Wearereadytorespondtothecallo

thetimes.Againandagain,wewilluse

ourstrengthandouryouth,andour

gadgetstoensurethereedomoourMotherlandandwearereadytoguard

ourquestorjustice.Weareontheside

ohistory...wearetheyouth,thehope

othenationWeareGenerationTxt.

Thecellphonewasinstrumentalinmo-

bilizingthepeople,especiallytheyouth.

Ederacknowledgedthatyoungpeople

wereun-lovingandtech-savvybutthey

knowwhentobepoliticallyinvolvedand

tostandupandtakeaction.

Where has generation text

gone?

Yetaterthe2001PeoplePower,the

passionotheyouthandtheFilipino

peopleseemedtodissipate.Theprom-

iseoanewleadershipwasdeemeda

Youth Power 2.0: Harnessing

technology or youth

mobilizationBy Marie Angelie Resurreccion

Technologyhasbecomecloselytiedwithyouthculturesothepresentgeneration.InthecaseothePhilippines,ithasbecomea

meansomobilizingyouthduringsignicantnationalevents.Thisarticlewilllookintohowcommunicationtoolstranslatetheuseo

socialmediaintosocialactionamongtechno-savvyurbanFilipinoyouth.


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ailure.Thecitizenry,onceenergizedby

nationalunity,succumbedtothetravails

odailylie.Youngpeoplearenowac-

cusedoapathybecausemobilization

hasbecomedicultdespiteconstant

callstorallyagainstthepresentgov-

ernmentbelievedtohavecommitted

abuseopower,corruption,election

raudandhumanrightsviolations.

Pessimistsallegethatpeoplearesu-

Gender and the Global Economic Crisis

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