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Impact of Globalization on Various Sectors related to Informal Economy
(Gist of the findings made in various papers by SEWA)
  Introduction :

The discussion of globalization has come to dominate the international discourse; the national discourse is dominated by the issue of “economic reform”. In fact, globalization and economic reform are related because one of the key tenets of economic reform in the last ten years has been the opening up the national economy to international competition through more openness in trade and in capital flows. The other, and related, key tenet has been the rolling back of the state in major areas of economic and social activity.

How have globalization and economic reform played themselves out over the last ten years? There has been a furious debate on this question. The perspectives used in the debates have ranged from broadly ideological and theoretical (e.g. “markets versus state”), through the macro level empirical (e.g. “does trade openness lead to growth?”), to the micro level perspectives of poor households and individuals gaining or losing from the global and national level processes (e.g. “exporting creates jobs but increases vulnerability”).
In SEWA we have tried to examine the consequences of globalization and economic reform as seen from the ground level. In particular, we have conducted studies with various sectors and categories of SEWA members.This paper summarizes some of the findings of the studies made by SEWA to know the impact of globalization on various sectors. Findings will be updated, as soon as we will be able to capture the impact on other sectors made by globalization. Also the findings made in the under given sectors will be updated accordingly.
  Agriculture Farmers :
  • Production cost has increased due to use of hybrid seeds, pesticides and chemical fertilizer from 1991 to 2002.
  • Total profit made in rice crops has decreased by 6% from 1991 to 2002.
  • Use of pesticides and chemical fertilizer has increased the soil pollution, which remains on land due to improper washing of soil due to lack of water.
  • Decrease in income and productivity has resulted in decrease of sustenance from agriculture as farmers are buying grains from the market and some of them are also opting for occupation other than agriculture to sustain themselves.
  • Use of chemical fertilizer and pesticides has an impact on health, as farmers are complaining about severe headache, fever, skin irritation and other skin related diseases.
  Agricultural Workers :
  • Availability of water for cultivation has encouraged the farmers to cultivate their lands for two to three seasons. This has increased the employment opportunity among agricultural workers, instead of one season they are getting work for three seasons. On the other hand, in many areas mechanization has decreased the available employment.
  • Use of pesticides and chemical fertilizers has made the agriculture farmers to work in polluted atmosphere. Most of the workers have complained about headache, skin and eye irritation and vomiting tendencies during the use of pesticides.
  Construction Workers :
  • Competition has increased among construction workers in last ten to twelve years as closure of textile mills and printing factories has increased the number of labourers in the sector.
  • Decrease in employment days as construction workers are getting seven days work in a month. The reason said to be the mechanization of construction sector, which has decreased the demand of labourers in the sector.
  • With the current policy of increase in privatization and mechanization of construction sector by Government of India, there would be a massive displacement of labour in all the operations of construction sector. Clearly, this emerging scenario will have its worst affect on women construction workers, as they will be completely eliminated from the main operations in which they have been traditionally deployed.
  • Change from traditional construction work to more mechanized and skilled construction work.
  The Garment Industry :
  • Change in market demands - instead of petticoats and children’s wear demand is more for sophisticated items according the national and international fashion world.
  • Instead of cotton cloth, synthetic clothes including satin and velvets are mainly used as raw material for the current garment market products.
  • Majority of the self-employed women garment workers owns older variety of sewing machine, which does not work well other than cotton material. This has affected the productivity of women workers. Unavailability of capital also restricts the workers to upgrade their machines as per the demand of current garment industry.
  Forestry :
  • Lowering of import duty on forest produce has also encouraged the import of gum, consequently decreasing the price of gum. This has affected the income of gum collectors, as forest department has to reduce its rates.
  • Continued State control and monopoly of non-timber forest produce has restricted the gum collectors to sell their product in open market. They have to sell their products to government agencies or subcontractor deployed by government in much lower price then open market price of the gum.
  Insurance :
  • In the late 1990s’, the Indian Parliament passed an Act allowing private insurance companies into sector. However, the Act is promoting only very large insurance companies, as the minimum capital required to register a company under the Act is Rs. 100 crores. Although SEWA was able to expand insurance to its members it is not being allowed to start insurance co-operative due to the large capital requirement.
  • With privatization, SEWA has been able to get better deals for its members, as there is more competition among the insurance companies.
  Conclusion :

What do we learn form SEWA’s ground level perspective on the consequences of the global and national forces that go under the labels of “globalization” and “economic reform”? We draw the following five lessons:

- The effects of globalization and economic reforms on poor women are highly differentiated and nuanced, so a blanket analysis or stance is not justified. Some features of the economic reform process, such as reducing the role of the state in Forestry, and some consequences of greater openness, such as the easier access to international markets for poor women’s products, are beneficial to poor women. But other features are not.
- Despite the benefits of globalization and economic reform, the three troubling features identified from first principles—relative decline in unskilled wages, increased risk and vulnerability, and a declining bargaining power of unskilled labor—are indeed seen in SEWA’s ground level experience.

Maximizing the benefits and minimizing the costs requires active management of the process of globalization and economic reform with the outcomes for poor in mind. A hands off policy, is not an option. Strategies for management should be developed by listening to the experiences of the poor and their representatives.

- In some cases, managing the negative consequences may indeed involve some slowing of the pace of reform or opening up, as in the case of the mechanization of the construction sector. In all cases, direct interventions to enhance the skills of the poor, and to develop insurance tools to manage the risks they face, will be crucial. These interventions need to combine government action and action by organizations of the poor.
- The poor, and especially unskilled poor women, need organization to counteract the growing economic power of capital and skilled labor as a result of their greater national and global mobility. Organization is also the sine qua non for representation of the interests of poor women in local, national and global policy making councils.
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