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Countries Decrease Women’s Rights To Boost Foreign Investment

Investment treaties between two countries have a negative effect on women’s economic rights, new research finds
Investment treaties between two countries have a negative effect on women’s economic rights, new research finds
  • Bilateral Investment Treaties (BITs) have a significant negative effect on women’s economic rights, but can positively impact women’s political rights
  • Host states are reluctant to prosecute foreign investors due to threat of legal retaliation
  • Governments subsequently improve women’s political rights to help prevent public unrest

As Bill Clinton’s political strategist famously quipped: “Its the economy, stupid”. The de facto slogan of Clinton’s run for presidency in 1992 and perhaps the chief concern for any government in power if you asked for the brutally honest answer.

In the search for further economic growth and prosperity, foreign investment can be an attractive way to bolster GDP, whether it be in an autocratic, democratic or developing country.

However when governments are all too eager to gain appeal from international friends they can leave sections of their own population with lower working conditions and fewer rights than they previously enjoyed.

A research project, conducted by Bimal Adhikari, Assistant Professor at Nazarbayev University’s School of Sciences and Humanities (NU SSH) and his colleagues, investigated the effect that investment treaties can have on women’s rights. His findings revealed that countries prioritise secure investment arrangements such as Bilateral Investment Treaties (BITs) which, whilst profitable, can reduce women’s economic rights. Furthermore, rather than tackling this unfortunate consequence, governments instead provide women with improvements in political rights in a bid to prevent civil unrest.

To fully appreciate the study’s findings, it’s important to decipher the jargon in order to understand the implications for all respective parties.

The type of investment arrangement discussed in the study, BITs, consist of an agreement which establishes rules for foreign investment between two countries. Most BITs (although not all) operate between one developed and one developing country. Typically, the developing country is the host and signs BITs to attract multinational corporations from their developed country partner in a bid to boost their own economic development.

To conduct the research, Professor Adhikari and his colleagues analysed the number of BITs approved by 120 countries over a thirty year period. Data on women’s rights was obtained from the CIRI Human Rights Data Project.

In comparing these data sets, the researchers uncovered some concerning correlations.

Using the variables of GDP, local democracy, number of women in Parliament and presence of a civil war in the prior years, the study found these to have significant negative effects on the level of women’s economic rights in the current year.

Similarly, GDP and its growth rate, number of women in Parliament, and Committee on the Elimination of Discrimination against Women ratification are significant predictors of women’s political rights, with their effects in the expected positive directions.

Professor Adhikari said: “As states seek out BITs, they engage in a ‘race to the bottom’, to become more attractive to potential investors. This has significant implications for women’s rights as host countries often decrease the quality of working conditions and lower labour standards to heighten their advantage of low-cost labour, which is difficult to change later on.”

This lowering of economic rights for women, whilst making investment more attractive to foreign investors, unsurprisingly does not avoid backlash from domestic workers.

“Poor economic rights can lead to public unrest,” he continues. “However, host states are reluctant to prosecute foreign investors due to threat of legal retaliation, further enabling them to engage in women’s economic rights violations in the host country.”

Instead, he concludes, governments seek solutions to ease tensions that lie in political rights and amendments.

Outside of the data, the study shared specific examples of the trade-off of women’s economic rights  and the subsequent political manoeuvring. One such example, in Chile, saw the government enact a law which required 50% of the writers for the country’s new constitution to be female, after groups of women protested against poor economic conditions.

From these examples, Professor Adhikari says, it’s easy to understand why this is seen as a viable strategy. Such a policy will guarantee an equal footing in employment for women. And, surely, this is a good thing?

Well, whilst such moves look good on the surface, if the trade-off holds a detrimental impact on women’s economic rights then, regardless of visible equality when it comes to staff numbers, such measures will do little to heal inequality at its core. 

As research into similar issues regarding equality have shown businesses, and in this case governments, are clearly making an unnecessary mistake in trading off progressive values in the short term for financial or political gain, and there are paths to take in which everybody wins. There will always be trade-offs in business or politics in order for two parties to find common ground but surely singling out women as candidates for decreasing human rights is territory we should no longer be willing to tread.  

In future, countries that are more democratic should not buckle and sell off women’s economic rights in order to guarantee marginal economic growth. Setting the precedent that they are willing to do this enables more autocratic and less gender diverse parliaments to prosper.

By, James Dugdale

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