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Does regional integration move a needle towards a gender parity in South Asia?

To answer some aspects of this question, we have undertaken a study to measure the impact of trade liberalization and regional integration measures on gender employment and wages. The study incorporates gender-differentiated employment and wages for selected South Asian economies across sectors to identify targeted value chains and economic activities, particularly among green trade sectors. This is the first major attempt to develop a gender-differentiated data set for South Asian countries, within the widely used Global Trade Analysis Project (GTAP) framework, to examine the nexus between trade, green economy, and gender. Two illustrative scenarios are examined. The first scenario examines a complete tariff elimination among the Bhutan-Bangladesh-India-Nepal (BBIN) grouping of countries in all sectors. The second scenario involves complete tariff elimination among countries in South Asia by fully implementing the already existing free trade agreement (SAFTA).

The results indicate that the SAFTA scenario is more beneficial than BBIN for all countries. The limiting scope of BBIN may result in Pakistan and Sri Lanka losing out. India stands to gain the most in absolute terms but the least in relative terms while Nepal stands to benefit the most in terms of relative positive impact on GDP, exports, imports, and investments. Pakistan and Sri Lanka experience a negative percentage change in employment in BBIN while of course they stand to benefit through the SAFTA scenario.

In terms of gender and green economy, women employment grows faster than male employment especially in Bangladesh and Bhutan as most of the sectors that benefit due to these FTAs are women intensive. Moreover, unskilled female labor employment grows faster than skilled female labor employment. The exception is, however, Nepalese unskilled labor as the female unskilled labor in Nepal is dominated by the agriculture sector which is not much impacted when compared to other sectors and the service sector which employs the majority of the skilled women labor in Nepal generally tends to benefit from these FTAs. Another exception is India, wherein the growth rates of male and female employment and wages are almost on par with each other. Thus, both the scenarios of liberalization have a net positive effect on the green sectors.

In a nutshell, the data set developed in this study helps to analyze the economic activities related to trade that benefits female labor force participation and real wages. The analysis of the data set could enable the governments and the policy makers to design better trade liberalization policies and programs which could help improve the targeting of the sectors benefiting women. Moreover, the analysis could help reduce existing gender disparities and wage discrimination over time in South Asian countries. Thus, the study would not only help in analyzing the gender dimensions of trade agreements but also in subsequent research on the gendered impacts of other global shocks.

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