Empowering Women Through Fiscal Reforms Can Boost Growth in Pacific Economies

The report by the IMF, ADB, and Pacific Islands Forum Secretariat argues that gender-responsive fiscal policies are vital for Pacific nations facing debt, climate shocks, and fragile economies. It stresses that empowering women through taxation, spending, and budgeting reforms can expand fiscal space, boost resilience, and drive sustainable growth.

The report Fiscal Space and Gender Equality in the Pacific, prepared under the joint research efforts of the International Monetary Fund (IMF), the Asian Development Bank (ADB), and the Pacific Islands Forum Secretariat, delivers a striking assessment of how small island nations struggle to manage fragile economies while addressing entrenched gender inequalities. At its heart lies the argument that fiscal policy, often thought of as a purely technical exercise of balancing budgets, can in fact serve as a transformative lever for reshaping social and economic realities. In the Pacific, where economies are narrow, vulnerable to climate shocks, and heavily reliant on external aid, the central question is not whether fiscal policy should engage with gender equality, but how urgently it must if development is to remain sustainable. Gender equality, the report argues, is not an afterthought but a cornerstone of fiscal resilience and long-term sovereignty.

Tight Fiscal Space and Expanding Pressures

Across the Pacific, governments are caught in a squeeze. Public coffers remain strained by mounting debt, small and volatile tax bases, and heavy reliance on unpredictable aid inflows. Expenditure pressures multiply year after year, from healthcare and education demands to climate adaptation projects and post-disaster recovery. With resources so thinly stretched, gender-sensitive measures are often sidelined as luxuries rather than necessities. Yet the report warns that ignoring gender in fiscal policy ultimately deepens inequities and weakens resilience. Gender-blind austerity measures cut into services that women disproportionately rely on, while stimulus spending often bypasses women altogether by targeting male-dominated industries. This approach narrows, rather than widens, the pathway to resilience.

Women on the Margins of Growth

Women’s economic participation across Pacific economies is defined by structural disadvantages. They are concentrated in low-wage and informal sectors such as agriculture, tourism, and market vending, where protections are weak and incomes are volatile. When economic crises strike, these sectors are hit first, leaving women with few safety nets. Simultaneously, cuts to public services, whether in maternal health, childcare, or social protection, affect women more directly, since they are often the ones both providing and depending on care. The report highlights how recovery packages tend to favor industries like construction and transport, channels that almost exclusively employ men, leaving women sidelined from economic renewal. This dual exclusion is not only unjust but also economically inefficient, denying Pacific economies the benefits of women’s full participation.

Pathways for Gender-Responsive Reform

The researchers identify three broad pathways for bringing gender into fiscal decision-making: taxation, expenditure, and public financial management. On taxation, the heavy reliance on consumption taxes like VAT tends to disproportionately affect women, particularly in female-headed households with limited resources. The report recommends tax reforms that remove disincentives for women’s work, reduce inequities in the informal sector, and ensure neutrality in how consumption taxes affect different households. On the expenditure side, the call is clear: redirect more resources toward health, education, and especially care infrastructure. Investments in childcare and eldercare create a double dividend, freeing women to enter formal employment while generating jobs in the care sector itself. Finally, in public financial management, the report underscores the need to embed gender analysis into the budget cycle. This means mandating gender impact assessments for major programs, collecting sex-disaggregated data to make inequalities visible, and equipping ministries of finance with the tools to champion gender equality as part of their core mandate.

Pacific Realities and Political Will

The Pacific’s unique context makes these challenges particularly pressing. With small populations, geographic isolation, and extreme vulnerability to climate disasters, these states live on the edge of fiscal fragility. Cultural and communal systems sometimes buffer hardship but can also reinforce traditional gender roles, limiting women’s access to decision-making and resources. The report acknowledges that fiscal policy alone cannot dismantle entrenched inequalities, but insists it can create the enabling environment for progress. Development partners, including donors and multilateral institutions, are urged to integrate gender equality into financing frameworks so that aid and debt relief do not inadvertently widen gender gaps. Ultimately, the report concludes, technical reforms will not suffice without political will. Ministries of finance must move from being neutral budget managers to proactive agents of inclusion, while civil society, particularly women’s organizations, must be empowered to hold governments accountable.

Toward Fiscal Sovereignty Through Equality

The central message that emerges is both sobering and hopeful. The Pacific’s fiscal challenges are undeniable, but persisting with gender-blind approaches will only deepen the trap of fragility. Conversely, reorienting taxation, spending, and budgeting through a gender lens can empower women, strengthen resilience, and gradually expand the very fiscal space that governments lack. The researchers from the IMF, ADB, and Pacific Islands Forum Secretariat emphasize that gender equality is not a soft issue but a hard economic necessity. It is a pathway to building stronger, more resilient states that can withstand shocks and assert greater fiscal sovereignty. By placing women at the center of fiscal policy, Pacific nations are not merely addressing social justice but securing a future in which fiscal policy is a tool for opportunity rather than austerity.