On the investment side, net foreign direct investment plummeted in the 1980s as the debt crisis unfolded, declining by 50% just between 1982 and 1986, according to the IMF. By 1988, there was some rebound, but mostly in East Asia and a few other countries without serious debt problems. (More recently, however, we have seen how transient some of this financial capital was in East Asia with the melt-down known as the Asian Financial Crisis and its domino effects in Russia and Latin America.) The problem of weak foreign direct investment was compounded by capital flight ÷ wealthy individuals moving their money outside of their home country, usually in hard currencies, to guard against inflation or devaluation. The IMF estimated that $30 billion fled Africa between 1974 and 1985.

With investment diminishing, export revenues falling, foreign aid falling, and generally scarce internal financial resources, many countries of the global South had no alternatives for financing development other than acquiring new loans by accepting the IFIsâ structural adjustment policies.

Connections with SAPs

While the labeling and packaging of structural adjustment policies has changed somewhat over the years, the underlying goals have remained constant: to transform economies along the lines of free market models and thus to integrate them into the global economy. Foreign trade and investment play a central role in this transformation and integration process. This emphasis also benefits the IFIs and other international creditors by strengthening a governmentâs ability to continue servicing foreign debts.

The standard SAP formula assumes generally weak demand for goods in a nation, and thus relies on external demand to serve as an engine of growth and development ö at least in early phases of the SAP process. Debtor nations are thus encouraged to solicit foreign direct investment and to promote exports to generate hard currency, create employment, and stimulate their economies. This is an outward-oriented growth model. Barriers to imports (tariffs, quotas, etc.) are to be removed, so that there is a free flow of goods and services in and out of the country. The IFIs also recommend different ways of deregulating how a countryâs currency is converted and traded as another avenue for opening up the economy to international competition and market forces. The IFI rationale for pushing a single, freely-floating exchange rate is to argue that only then can prices reflect their true levels, rather than political distortions.

The final puzzle piece is to lift restrictions on foreign investment and require intellectual property protections so that capital can easily flow in and out of a nation. Foreign direct investment is often linked to trade, particularly in Southern countries. Companies often set up shop primarily to export throughout a region or to Northern markets. Foreign investors often start by negotiating licensing arrangements before they actually spend the money on a physical presence in the country. Licensing arrangements only work when a country recognizes such things as patents and trademarks (intellectual property). Goods or services are then made according to specifications and a royalty is paid to the license holder (generally a multinational corporation). Examples of companies that often operate via licensing rather than making their own direct investment are McDonaldâs and Coca-Cola. This is one reason why intellectual property issues are a hot part of trade agreements and why trade negotiators have expanded their scope to include other investment provisions in treaties.

In negotiations around regional and global free trade agreements, the objectives of Northern nations tend to dovetail with structural adjustment policies. One might argue that SAPs and the World Trade Organization (WTO) negotiations, for example, are kind of a one-two political/economic punch for debtor nations, basically eliminating space for alternative development paths. SAPs also pave the way for domination by multinational corporations (MNCs) in debtor nations, largely through the emphasis on liberalization and privatization. As governments sell public enterprises or contract out services, often it is TNCs (or elite families) that win the bids or snap up the enterprise at bargain basement prices. Services and government procurement are currently two hot topics at WTO negotiations which should be of special interest to debt advocates.

Extending A Gender Analysis

As the debt crisis unfolded and we began to see the cumulative effects of several years of SAPs, it became clear that the impact of the policies and the way people responded to them varied greatly according to demographic factors such as class and gender. A significant body of academic and popular literature now exists to document how gender-based oppression of women and girls lies at the heart of the functioning of the global economy, and specifically, of SAP policies.

Much of the social impact analysis of SAPs has focused on the consequences of government budget cuts, removing subsidies, the imposition of user fees, the creation of temporary safety nets, and general economic contractions under SAPs. Often the gender analysis is centered on the fact (which the World Bank now disputes) that the poor are disproportionately female and that SAPs increased female poverty. Less research has been done on various trade- and investment- related measures in SAPs. In part, this is because it is difficult to sort out the causal factors. Can we disentangle the strands of various co-existing trade agreements, multiple relevant governmental policies, domestic and international business cycles? Researchers are just beginning to tackle this challenge.

Activists and researchers are now gathering evidence to illustrate why international trade and investment policies and trends are not gender-neutral. We are looking at how the socially-constructed roles, expectations, skills and resources that come with being male and female affect how people react to certain trade and investment policies and developments. On the flip side of the coin, we will look at how policies and institutions make certain assumptions about gender roles, and why, therefore, consequences vary according to oneâs gender. We will also look at what this means for the balance of power between males and females in the household and society.

A common starting point for any kind of gender analysis is to use the lens of three spheres of work. These three spheres are:

Reproductive: in the family/household. These activities maintain the family. They consist of domestic chores like laundry, gathering wood and water, cleaning the home, cooking, taking care of children, the sick and elderly. For some households, it also includes subsistence agricultural activities.

Reproductive: in the community. These activities help define, protect, and nourish society from the neighborhood level through to the nation state. This covers a wide range of tasks. They can range from very localized, like taking care of a neighborâs children, to very expansive, like monitoring elections for voting fraud.

Productive: in the family/household/community. These activities produce income directly (like having a job or a business) or indirectly (like supplying unpaid labor for a family business).

A comprehensive gender analysis of trade and investment yields many dimensions and complexities. Below are two examples related to SAPs, which begin to illustrate some of these dimensions:

Productive sphere effects: Many debtor nations focused their export-promotion strategies in the area of assembling manufactured goods. They saw low-wage labor as their "comparative advantage" (what they are best-positioned to provide) in international markets. They attracted foreign investors by opening export processing zones (EPZs) which provided tax holidays, infrastructure support, etc. As we know from the all-too-familiar images, this comparative advantage was built upon female labor – from the women in Indonesia making Nike shoes to the women cultivating flowers in Kenya for shipment to European supermarkets to women in Salvadoran maquiladoras sewing designer label jeans for U.S. consumers. Some countries, like Jamaica, have done the same thing for the service sector, setting up EPZs for data entry, for example. Factory owners often utilize gender-specific strategies to keep women workers in their place: mandatory "beauty contests", sexual harassment from supervisors, mandatory pregnancy testing, and sexual violence committed against women labor organizers.nt>