Emerging Europe strong on women’s economic opportunities but dragged down by low pensions

Emerging Europe strong on women’s economic opportunities but dragged down by low pensions
Female watermelon sellers in Kyrgyzstan's Fergana Valley. Women's economic opportunities in Central Asia are among the lowest in the emerging Europe region.
By Clare Nuttall in Glasgow February 24, 2021

Countries from the emerging Europe region performed well on the latest global survey of women’s economic opportunities from the World Bank. 

The post-socialist countries of Central, Southeast and Eastern Europe and Eurasia had an average score of 86.4 points out of 100, while globally, women had just three-quarters of the legal rights afforded to men on average around the world. 

The report “Women, Business and the Law 2021”, looks at laws and regulations in eight areas that affect women’s economic opportunities in 190 economies, over the period from September 2019 to October 2020. 

It finds that there was progress in several countries during the last year, but laws still restrict women’s opportunities and the economic and social impact of the coronavirus (COVID-19) pandemic has reinforced gender inequalities, creating new challenges to their health, safety and economic security. 

“Women need to be fully included in economies in order to achieve better development outcomes,” said David Malpass, World Bank Group president, in a press release marking the publishing of the report on February 23. 

“Despite progress in many countries, there have been troubling reversals in a few, including restricting women’s travel without the permission of a male guardian. This pandemic has exacerbated existing inequalities that disadvantage girls and women, including barriers to attend school and maintain jobs. Women are also facing a rise in domestic violence and health and safety challenges. Women should have the same access to finance and the same rights to inheritance as men and must be at the centre of our efforts toward an inclusive and resilient recovery from the COVID-19 pandemic.”

According to the World Bank, making reforms in the areas measured by Women, Business and the Law “is associated with narrowing the gender gap in development outcomes, higher female labour force participation, lower vulnerable employment and greater representation of women in national parliaments”.

The pandemic, which led to school closures and orders for employees who could work from home to do so, resulted in new measures that addressed some of the impacts of the pandemic on working women, yet at the same time it created new pressures. 

“For example, less than a quarter of all economies surveyed in the report legally guaranteed employed parents any time off for childcare before the pandemic,” says the report. “Since then, in light of school closures, nearly an additional 40 economies around the world have introduced leave or benefit policies to help parents with childcare. Even so, these measures are likely insufficient to address the challenges many working mothers already face, or the childcare crisis.”

“While it is encouraging that many countries have proactively taken steps to help women navigate the pandemic, it’s clear that more work is needed, especially in improving parental leave and equalising pay,” said Mari Pangestu, managing director of development policy and partnerships at the World Bank. “Countries need to create a legal environment that enhances women’s economic inclusion, so that they can make the best choices for themselves and their families.”

Within the emerging Europe region which spans both part of the OECD high income economies and the Europe and Central Asia regions in the World Bank report 13 countries score 90 points or more. 

Latvia leads with a perfect 100, followed closely by Estonia on 97.5. The third Baltic state Lithuania is also among the high-scoring countries, on 93.8. Despite their liberal policies and public clashes with Brussels over values, both Poland and Hungary have high scores of 93.8 and 96.9 their governments’ right-wing rhetoric doesn’t extend to restricting women’s rights in areas such as the workplace given their tight labour markets before the pandemic struck. Czechia, meanwhile, scores a healthy 93.8. 

Many of the Southeast European states also perform well, led by Slovenia on 96.9. Despite being less affluent than their Central European neighbours, Serbia, Croatia, Kosovo, Albania, Romania and Bulgaria all score over 90 points. 

At the other extreme, Iran scores only 31.3 points, the sixth-lowest worldwide. Kazakhstan and Turkey both have scores of under 70 points. Russia is on 73.1 points, dragged down by poor performances in the Workplace, Pay and Pensions categories, as is Belarus (75.6). 

The other Central Asian republics, plus Armenia, Azerbaijan and Ukraine, also have scores in the 70s. 

Worldwide, the best performing region was the OECD high-income economies, which account for 28 of the 39 economies with scores higher than 90. A further seven high-scoring countries are in Europe and Central Asia. 

No economy in the Middle East and North Africa which have the lowest average score of just 51.5 or South Asia scores 90 or higher. However, the report notes huge variations between the highest and lowest scoring economies in the Middle East and North Africa and sub-Saharan Africa regions.

According to the World Bank: “Regional patterns have remained similar over the last 50 years, with the OECD high-income, Europe and Central Asia, and Latin America and the Caribbean economies leading the way toward legal gender equality.” The biggest increases in scores since 1970 were in the OECD high-income, Latin America and the Caribbean and sub-Saharan Africa regions.

Reforms in difficult circumstances 

A “surprising number” of reforms were carried out despite the pandemic, with reforms recorded in 27 economies across seven of the eight indicators. The biggest advance was in the Middle East and North Africa region, where 25% of the economies implemented at least one reform, as did almost 20% of the OECD high-income economies, while fewer reforms were recorded in other world regions.

The largest number of reforms concerned women’s pay, where there were positive changes in Bahrain, Montenegro, Saudi Arabia and Vietnam, which eliminated restrictions on women’s employment in jobs previously deemed dangerous for women. Montenegro and Saudi Arabia also eliminated all restrictions on women’s employment in industrial jobs such as mining, construction, manufacturing, and the water sector, said the report. 

In the Parenthood category, Estonia, which stated reconfiguring its leave policies in 2017, scrapped its two-week paternity leave benefits policy, replacing it with one month of paid parental leave for fathers, dubbed the “daddy month”. 

Uzbekistan’s 2019 Law on the Guarantees of Equal Rights and Opportunities for Men and Women prescribes non-discrimination in the provision of movable and immovable property, land, financial assets and loans, according to the report. Specifically, Uzbekistan made access to credit easier for women by prohibiting gender-based discrimination in financial services.

While there were relatively few efforts related to the Pension and Assets categories, Slovenia equalised the age at which men and women can retire and receive full benefits at 65 years. This followed a gradual increase schedule introduced by the Pension and Disability Act in 2013. 

The retirement gap 

Pensions are the category where most of the emerging Europe economies fall down. The report singles out two reasons for women to end their working lives with smaller pensions: leaving the workforce to take care of family members and laws that mandate different retirement ages for men and women. According to the report, retirement ages remain unequal in close to one-third of the economies covered worldwide, including much of the emerging Europe region. 

“Despite a significant effort by governments to gradually equalise retirement ages between men and women across Europe and Central Asia, a difference of five years remains across 26% of economies in the region, including Belarus, Georgia, the Kyrgyz Republic, the Russian Federation, Tajikistan, and Uzbekistan,” says the report. 

While some governments have sought to equalise the retirement age including Slovenia recently pension reform is a notoriously politically difficult area, and changes have often met with resistance.

Slovakia, meanwhile, took a backward step by implementing a change that widened the legal gender gap: a new law established different ages for men and women to retire with full and partial pension benefits and made the mandatory retirement age for men and women unequal, the report pointed out. 

Globally, Parenthood is the category with the lowest average global score, at just 54.8. This indicator measures paid maternity leave, government administration of maternity benefits, paid leave for fathers and whether the dismissal of pregnant women is prohibited.

Changes are expected in European Union countries, as in 2019 the EU passed a new directive aimed at increasing the amount of leave available to both parents and at redistributing childcare responsibilities between men and women. EU states now have three years to comply with the directive.

The second-lowest performance worldwide is for the Pay indicator, with an average score of 67.5. Not only do 88 economies still restrict the jobs women can hold, but only 90 economies most of them OECD high-income economies legally mandate equal remuneration for work of equal value. In the emerging Europe region, pay differences are pronounced in the lower-scoring countries, mainly those from the Eastern Europe and Eurasia regions. 

“Should a woman successfully enter and remain in the labour force, it is imperative that she not face job restrictions or receive lower pay than a man holding the same position,” says the report. 

“The urgent need for reform is even more glaring today, because the COVID-19 pandemic has widened the long-existing gender pay gap,” said the report. “Women are more likely than men to take leave from work or resign their positions to care for children in the event of illness or the closure of schools or daycare centres. Even if they manage to hold on to their positions, women are still at higher risk of having to submit to greater earnings penalties as a result of the pandemic.”