Ice Queen

You can be forgiven to think that Scandinavia with an infamous welfare system and progressive society is the best place to live as a woman. It would be entirely reasonable to believe that Germany, with arguably the most powerful lady on the planet in charge or the USA, with more female CEOs in the world than anywhere else, are the places to go to succeed if female. In fact it is none of these. Instead, a small island in the North West of Europe has been named by the World Economic Forum as the best place to live as a woman.

Iceland with a population of only 320,000 topped the list of 136 countries in The Global Gender Gap Report at the end of 2013. Most poignant is that this was for the fifth year running, a run since the Great Recession of 2008.?At the same time as this success is occurring, Iceland has roared back to economic results. The Prime Minister is now aiming for unemployment under 2%, a feat that even she describes as something “which may sound strange to most other western countries.” The impressive growth is not what politicians in other European economies should be purring at; growth is steadily returning buoyantly if not confidently to countries such as Great Britain, Germany and Belgium. On the contrary, it is growth with gender equality that leaders and economists should be taking note of.

Austerity, now shown to be necessary albeit painful, is by its very nature disproportionally hitting females across Europe. Women are more frequently employed in the public sector and often social security is geared towards supporting mother and children; cuts to both these areas have hit them harder. The task for many governments across Europe is no longer rebooting their economy, as even in Greece this has finally been achieved. The battleground has now turned to doing so in an equitable way and part of this would be gender equal growth and politicians could do worse than look upon Iceland as a model.

As the rest of Europe scales back its welfare spending, Iceland has managed to stabilise it and social security makes up an incredulous 43% of its budget in 2014. So how have they done this? A compelling argument can be made that it is down to its response to the global meltdown. With the USA and Europe undergoing a series of market interventions to save their ?too big to fail? banks, Iceland decided to let their banks collapse. The truth is Iceland has banks far smaller than British and American ones, but relative to their population Iceland?s banks are the worlds biggest. The banks were in fact, too big to save. Against the grain, Iceland introduced policies such as capital controls, forgiveness of mortgage debt and guarantees of deposits. This way the burden, as it should be in a capitalist system, fell onto the industry as opposed to customers and taxpayers.

It can be idealistic to look back with unwavering fondness on Iceland?s handling of the crisis. A dose of austerity was still necessary. There was a cocktail of the usual financial poisons; astronomical public debt, unemployment of 7.5% and ballooning of personal debt. Unlike most of the developed world though the policies were no more than a healthy dose of Mary Poppins?s medicine. The capital controls gave the government room to manoeuvre and rather than placating international investors, it could concentrate on protecting its welfare budget. This is unfortunately a luxury that most Western countries have been unable to enjoy. In Britain, for instance, welfare cuts have a sound and needed moral rational behind them but also have a financial imperative in other areas such as child benefit; these are less desirable to scythe away. Such financial cuts are what have hurt women the most. The introduction of the Universal Credit to save money has affected lone, non-working people the most, of which 90% are women. By taking the free market approach, a much more righteous one in my view, Iceland has no receipt for a bank bailout, and can continue investment in families and particularly females, fairly unabridged.

 

Furthermore, economics and feminism are intricately linked.The idea that development leads to further gender equality is worryingly accepted. Indeed stacks of evidence seem to support it; as I said, the world’s biggest economy has the most CEOs. In comparison though, reports by Credit Suisse and McKinsey & Company suggest the other way around. They point to evidence that firms with just one additional female board member, out perform those with none by 26%.? Harvard Business Review research discovered that companies with gender diversification are 45% more likely to report market share increases in 12 months and 70% more likely to enter new markets. Simply put Iceland?s protected females are helping steer economic success.

 

So, when debates rage in the United Kingdom about gender equality we need to look at the mistakes we made in 2008. This is not a partisan issue as even a Conservative Party who are ideologically opposed to market intervention were happy to support Labour?s unwavering desire to prop up the failing banks. Austerity is now necessary, but it needn?t have been. Iceland?s choice to let the market work its magic has prevented such deep debt that has saddled us all. In doing so they have protected women who through their innovation and different perspective of life are helping making Iceland a success story. Iceland?s economy may not be back to the heyday of pre-2008, but this chilly island?s economy is heating up. There is now nowhere better to learn lessons on how to achieve gender equality and growth in response to the biggest crisis in modern history, than Iceland.

 

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