Who cares – and who pays?
As we celebrate the International Workers’ Day, it is important to remember all workers – not only those that get remunerated for their labor. Unpaid care work is just as real as paid work and takes up a significant amount of time, especially for women. The UN estimates that globally women spend on average over 4 hours a day on unpaid care work, compared to 1.7 hours for men, further exacerbating the inequality women face in the formal job market. With the closing of schools and other measures undertaken by governments to prevent the spread of the coronavirus, the burden of unpaid care work has rapidly increased.
This crisis also makes it clearer than universal access to quality, gender-responsive public services and other key social protection measures is crucial – both for softening the social and economic impact of this health emergency on women and other vulnerable groups and for tackling the problem of unpaid care work long term.
The comprehensive COVID-19 Economic Response Plan (CERP), unveiled last week by the Ministry of Finance and Planning, contains many important measures, such as recruiting more medical staff, extending some social security benefits to the unemployed and providing food and cash transfers for the most vulnerable households. But more is needed, especially in terms of response to the increasing domestic gender-based violence. Even before the first impact of COVID-19 was felt in the country, the chronically underfunded public services have been holding back social and economic development, perpetuating reliance on women’s unpaid care work and exacerbating gender inequality.
While donors, including the EU, Australia and the US, have been coming forward with additional support, it is not enough. Since the beginning of the year, Myanmar has also taken on new loans from the World Bank and the IMF, and more are being discussed. But while the funding is direly needed, loans also carry a risk. According to ActionAid and Jubilee Debt Campaign’s calculations, in 2019 Myanmar was spending almost 17% of government revenue on debt servicing, which is more than what the IMF considers a sustainable level of debt. This is significantly more than what is allocated to health care. ActionAid’s recent global report Who cares for the future highlights how countries that spend more than 12% of their revenue on debt payments invariably have to cut funding for public services. It is crucial to consider how, after the crisis is averted, Myanmar will deal with the increased debt burden, while ensuring sufficient funding for public services essential for the delivery of the Sustainable Development Goals. While many civil society groups, including ActionAid, have been calling for debt cancellation, the response has so far been disappointing. The G20 has announced suspension of debt payment for 6 months, which Myanmar might be able to benefit from, but this puts the problem off rather than solves it.
Where can the money come from then? IMF’s projections from late last year pointed to a potential small decrease in tax revenue, followed by an increase in 2020-21. At this point it is unlikely that this projection holds and Myanmar’s tax revenue is likely to suffer from its already low level of approximately 7% - the lowest in ASEAN and significantly below the average for countries with similar income levels. Public revenue from the state economic enterprises (SEEs), historically a major contributor, has also been declining. While the MSDP sets an ambitious plan for a comprehensive tax reform, the efforts need to be strengthened so that the country can start seeing the benefits. Improving tax administration, rationalizing tax incentives and reforming income tax on wealthier individuals are some of the key steps that could help generate more tax revenue in a way that does not put an unfair burden on lower income groups – and which makes a real difference to public coffers. IMF calculates that tax incentives are currently costing up to 25% of corporate tax revenues, while more tax revenue from wealthier individuals could increase the tax to GDP ratio by over 3%.
More investment in public services financed from better debt management and a strong, progressive tax system is long overdue in Myanmar and the current crisis only makes them more urgent.
