SEATTLE, Washington — An Oxfam International report on global inequality published in January 2020 states that gender-based inequality is a large contributing factor to global wealth inequality. The COVID-19 pandemic has had significantly impacted this issue, increasing not only wealth inequality but exacerbating gender gaps. The effects of COVID-19 on women’s wealth have the potential to reverse the progress many nations have made in dismantling gender-based economic inequality.
Women’s Disproportionate Economic Insecurity
The Oxfam report on global wealth inequality revealed that globally, women own only half the amount of wealth that men do.
This is partly due to women’s relative lack of job security and unpaid household work, according to Chiyo Kanda, the World Bank’s Country Manager to Sri Lanka and the Maldives, in an interview with the Borgen Project. “Women are more likely to be employed part-time […] and the vast majority are in the informal sector.” She went on to say that in times of economic hardship, such as during the COVID-19 pandemic, “[women]are one of the first to be laid off or lose their livelihood.”
In many nations, entrenched customs and beliefs shape laws that also inhibit women’s ability to build wealth. In almost 40% of countries worldwide, for instance, women face legal and cultural obstacles to land ownership.
Land ownership is especially important for the accumulation of wealth in developing areas, according to Kanda. When financial institutions give out loans, they often ask for collateral, and land and property often serve this purpose. So, laws prohibiting land ownership by women can effectively block women from obtaining loans. This is only one example among many.
Further, in many nations women are economically dependent on their spouses, which can make it difficult to protect their assets. The effects of COVID-19 on women’s wealth are amplified in these scenarios, according to Kanda. If a woman’s husband passes away, she may have no legal claims to her land, property or even her children.
Women’s Wealth in Focus: Sri Lanka and the Maldives
As Country Manager in Sri Lanka and the Maldives, Kanda discussed the effects of COVID-19 on these regions. In Sri Lanka, Kanda explained, women’s participation in the labor market is surprisingly low, even though many women have formal education and hold high positions of power in the government. This is worsened by the COVID-19 pandemic, which has prompted job losses across many sectors.
Tourism is crucial to the economy of both nations. Directly and indirectly, it accounts for approximately two-thirds of the Maldives’ economy. Because this is one of the industries most affected by COVID-19, many Maldivians have lost their jobs as a result.
“In Maldives, because of COVID, there’s some new businesses emerging because there is a [strict]lockdown and people lost their jobs… women started some micro-home-based businesses like cooking something and selling it,” Kanda said.
However, regulatory agencies have ordered many women to shut their unlicensed microbusinesses down. The local government, in cooperation with international organizations like the World Bank, is attempting to reverse these orders and protect female business owners in the Maldives from bureaucratic legal barriers and fees.
This is not a unique story. Impoverished women, who face legal restrictions to land and homeownership and typically work part-time or informally in normal times, are especially vulnerable to the effects of public health lockdowns. However, governments, international organizations and nonprofit organizations are making efforts to alleviate the effects of COVID-19 on women’s wealth.
Next Steps: Protecting Women’s Wealth
Although gendered wealth inequality requires a different solution in each society, there are general steps that governments and international organizations advocate for as a means of economically empowering women. In the short-term, the World Bank argues, governments must provide more economic protections for women’s wealth. These are especially relevant in terms of property ownership and eviction prevention.
Kanda also discussed several of the World Bank’s initiatives aimed at protecting and empowering women. She emphasized the importance of financial training and community participation. Some initiatives, for example, support women’s entrepreneurship by establishing local, self-sustaining women’s financial groups. These operate by collecting contributions from each member and assigning turns to use the savings to start small businesses. Kanda also emphasized the care that the World Bank takes in monitoring women’s participation in community-based efforts.
In the long-term, she says, countries like Sri Lanka and the Maldives must provide legal protections for women’s wealth. “Be it inheritance, credit and also how the women’s status is recognized as a mother, a landowner, a house-owner or at least a renter,” women need legal recourse to protect their wealth.
In many nations, socio-cultural perceptions of a woman’s role in the economy present other longstanding challenges. Recognizing domestic and care work as real work deserving of compensation is an important first step toward women’s empowerment. This can prompt further development of time-saving technologies and initiate the process of redistributing domestic work more equally.
The effects of COVID-19 on women’s wealth have, and will continue to be, acute. However, government protections and both short-term and long-term initiatives can mitigate harms and empower women in the economy.
– Leina Gabra