Closing the Global Gender Gap

03.29.2018
Caroline Hubbard, Manizha Wafeq, Eli Webb, and moderator Jennifer Anderson participate in a CIPE panel discussion on March 22, 2018. The discussion centered on creating change in some of the most challenging environments around the world, including Afghanistan and Papua New Guinea.

Women entrepreneurs offer a myriad of benefits for their economies and societies over all. Yet, around the world, there are still many barriers to women starting businesses. This year’s International Women’s Day campaign—Press for Progress—focused on addressing an alarming projection: at the current rate, it will take two centuries to close the economic gender gap, many decades more than other widely measured gender gaps, such as health and education. The reasons range from a lack of information to find jobs and start businesses to expectations around gender roles. However, legal and regulatory barriers are the very core of these obstacles and limit women’s full economic participation.

In the past two years, 64 countries have passed reforms to increase economic opportunities for women. Still, 155 of 173 countries—90 percent—have at least one law that encumbers women’s entrepreneurship. These laws range from bans on women working in certain jobs or at night, to limits on a woman’s right to own or inherit property, a source of start-up capital. A lack of property and inheritance rights, or control over other types of assets, is particularly prohibitive in countries or circumstances where access to other forms of finance is limited.

There are also those regulations that are not overtly gendered but disproportionately impact women, particularly rules around credit. In countries where credit depends on a record of engagement with financial institutions or having an asset to post as collateral, women are disadvantaged for a range of reasons. Women may have less access to financial institutions or opt to pursue alternative forms of financing, like microfinance. Having less ownership over assets means that women often face barriers to accessing traditional loans. When financial regulations inadvertently disadvantage women, it can multiply the effect of gender-based prohibitions, increasing their impact.

For example, despite increases in women’s political representation in Pakistan, a web of laws and regulations affect women who want to work and start businesses, including restrictions around property, inheritance, and access to credit. However, the environment for businesswomen has seen some improvement. Just over a decade ago, as a result of CIPE’s advocacy with the Ministry of Commerce, women won the right to form chambers and business associations. Today, there are eight women’s chambers, which are playing an increasing role in advocating for reform. In 2014, for example, the Women Chamber of Commerce and Industry Peshawar Division (WCCIPD) and the  Women Chamber of Commerce and Industry Multan Division (WCCIMD) successfully petitioned the government to reduce the terms of loans to artisans; predominately women operating small-scale enterprises, for whom short-term, high-interest loans are often too costly.

The Pakistani Women Chamber of Commerce and Industry is not alone in its success. Around the world, chambers, associations, and projects focused on empowering entrepreneurs have been platforms for positive change. In Nicaragua, CIPE partner Red de Empresarias (REN), a network of 450 women-owned businesses, advocated for reforms to expand the types of assets that can be used as collateral for loans, making credit more accessible to micro, small, and medium enterprises (MSMEs), particularly those owned by women who typically have more limited access to traditional forms of collateral. In Nigeria, through advocacy training and consultation with CIPE, the Association of Nigerian Women in Business Network (ANWBN) has become a point of contact for the Nigerian Senate on policies relating to women’s economic inclusion.

Where barriers to economic inclusion are high, women often operate in the informal sector. Not only does informality diminish their financial security and expose them to preventable risk, but it also reduces their ability to petition the government for change and take part in collective action. Empowering women to formalize their businesses, with the information, skills, and capital needed to take that step, positions them for further economic and political empowerment.

In Papua New Guinea, against the backdrop of one of the highest rates of domestic violence in the world, the Women’s Business Resource Center, a partnership between CIPE, the U.S. Department of State, and Australian Department of Foreign Affairs and Trade, is doing just that. The Center provides training and business support services, and it has become a convening point for women entrepreneurs, a major step toward creating an environment where women can organize for change. In Turkey, the U.S. Department of State-funded Livelihoods Innovation through Food Entrepreneurship (LIFE) project offers food business incubation for entrepreneurs in Istanbul and Gaziantep. The LIFE project aims to provide business support to Turks, Syrians, and other refugees with an eye toward the unique challenges that women entrepreneurs face, while also promoting economic integration across identities. These projects, while not focused around women’s associations, play an important role in promoting a more accessible ecosystem.

Eliminating barriers faced by women entrepreneurs empowers them to start businesses and advocate for policies that promote inclusive ecosystems and labor markets.

Since its launch in 1983, CIPE has prioritized women’s economic empowerment in its programming strategy and is taking steps to catalogue its expertise and develop a resource bank for robust programming that promotes women in economies. On March 22, CIPE highlighted its experience in Afghanistan and Papua New Guinea in a discussion connecting women’s economic and political empowerment with Manizha Wafeq, the Founder of the Afghanistan Women Chamber of Commerce and Industry; Caroline Hubbard, Senior Gender Advisor at the National Democratic Institute; and Eli Webb, CIPE’s Country Director in Papua New Guinea. Panelists agreed that efforts to empower women economically have not only enabled women to start businesses and create jobs that uplift their communities, but also have translated into women civic and political empowerment at the household, community, and national levels. Still, there remains much work that must be done to sustain and expand current efforts by chambers and associations working to break down the barriers that women face. Making entrepreneurship more accessible to women by striking laws and regulations that stifle their participation is a transformative and necessary step toward economic inclusivity and integration—and the manifold benefits that come with it.

Mounting evidence points to the benefits of women’s economic inclusion. If women played an equal role in labor markets as men, it would add $2.8 trillion, a 26 percent increase, to the global annual GDP by 2025. Research suggests that low- and middle-income countries in particular would reap the benefits of women’s equal participation in the workforce. Increased women’s economic participation reduces poverty and income inequality, increases economic diversity, and makes economies more resilient.

Women’s economic inclusion not only diversifies and strengthens economies but also has broader implications for society. Economic inclusion increases women’s decision-making power at the household, local, and national levels, which boosts spending on social services that directly support women and children. What’s more, bringing down the barriers faced by women entrepreneurs not only empowers them to start businesses but also to become advocates for policies that promote inclusive ecosystems and labor markets. Membership in chambers and business associations can offer a platform for women to advocate for reforms that reduce barriers and promote an entrepreneurship ecosystem that encourages women’s participation.

Emma Myers is a Program Assistant for the Middle East and North Africa programs at CIPE.