Full speed ahead: 5 ways to optimize women’s economic potential

Traders at Long Bien Market in Hanoi, Vietnam. How can development actors ensure women's economic potential is harnessed effectively? Photo by: UN Women Asia & the Pacific / CC BY-NC-ND

Given the lost economic potential of not sufficiently involving women in economies, “Why are our economies still running their engines at half speed?”

This was the challenge from Valeria Della Rosa, senior manager for business advisory services at the European Bank for Reconstruction and Development: how to involve women in economies and how global development actors can ensure women’s potential is harnessed effectively.

On the sidelines of the Union for the Mediterranean conference “Fostering Women’s Participation in Economic Life” in Barcelona, Spain last month, we heard a diverse range of views on how to best go about it.

1. Remove legal barriers for minimum input, maximum output.

Empowering women does not have to be costly — on the contrary, it should be seen as a high-return investment.

“Involving women in the economy is not only about rights … it is also about smartly investing in the social and economic development of our societies,” said Delphine Borione, deputy secretary general at UfM.

The idea was echoed by Augusto Lopez-Claros, director of the global indicators group at the World Bank: “We are looking at women’s empowerment because it makes economic sense … because we have to learn how to better use our resources.”

Lopez-Claros argued that one straightforward and low-cost method of fostering development in low-income countries was to simply remove the legal barriers hampering half of their societies from more fully contributing to economic growth.

What are these constraints? Women in developing countries are often not entitled to own, manage and inherit property; they are denied access to credit and to certain types of employment; favorable tax legislation related to paid child care is lacking; and public child care services are often nonexistent.

According to the joint World Bank-International Finance Corp. study on “Women, Business and the Law 2014,” economies that provide more incentives for women to work have greater income equality. According to Lopez-Claros, this finding, based on data gathered from 143 countries, underpins the idea that the mere removal of such barriers — which can arguably be undertaken by authorities themselves without any external funding — can contribute significantly to national prosperity.

2. Seek the right engineers.

If we have all the evidence, what keeps us from running the “engine” at full speed?

For UfM’s Borione, the answer was clear: We need the right mix of fuel — the right partners, with the right type of tools.

“Our main role at UfM is that of a convener or facilitator — we try to bring together a high diversity of players to promote innovative partnerships and encourage women to engage in yet underexplored areas, such as the green economy, the social and solidarity economy or ICT, for example,” she explained.

While UfM is not providing project funding as such, the organization offers a certification process — so-called labeling — that increases the marketability of these projects — and which was proving of great potential interest to civil society organizations in the Mediterranean region. There were several concrete examples for this type of support on display at the conference, with an entire session dedicated to the presentation of short pitches made by 10 civil society organizations, with a view to gaining new partners and possibly even funders.

And how can CSOs get on board with UfM labeling? Borione, who is also heads the body’s civil and social affairs division, expressed an open invitation to contact her and her division directly. Selection criteria are tough, Borione admitted, but even if a project was not selected for labeling, UfM could still support its managers through contact sharing and networking.

Any success stories? Devex interviewed Elarbi Imad, one of the civil society presenters and executive director of the Moroccan Center for Civic Education, who pitched his labeled project “Forming Responsible Citizens” during the conference. Implemented in conjunction with the Barcelona-based consultancy Ideaborn, as well as two other local partners in Egypt and Tunisia, this innovative partnership involving civil society, the private sector and the education ministries of the three countries aims to introduce citizenship education in the target country school curricula and thus at changing minds on women’s rights and roles in society.

According to Imad, it was thanks to UfM’s labeling that the project attracted its first funder, the government of Norway. Imad is confident that other donors will soon come on board with the initiative.

3. Foment high-value alliances for more traction.

In the area of gender equality, one of UfM’s key associates is U.N. Women’s regional office. Speaking to Devex, Mohammad Naciri, regional director of the agency’s Arab states regional office, highlighted that just nine months ago, a new memorandum of understanding had been signed to foster cooperation between the two institutions.

And what’s in it for U.N. Women?

“We do joint resources mobilization for women’s projects in the region and the role and political weight of UfM is very strong and important — even beyond the region,” Naciri explained. “It bridges northern and southern Mediterranean countries and we can leverage UfM’s members’ capacity to advocate for gender equality in the region.”

A new concept note for a partnership initiative between UfM, U.N. Women and the Organization for Economic Cooperation and Development on women and ICTs is already under discussion and, according to Naciri, new expertise in this area will definitely be in demand in future.

To increase UfM’s knowledge base and provide implementers with the right contacts and expertise, UfM also collaborates with consultancies. According to Borione, on-trend areas such as crowdfunding, energy and climate change, in particular, are becoming key sectors for UfM — with a number of potential upcoming needs for increased expertise.

4. Ensure private sector buy-in.

Leveraging private sector funding for development is one of the new buzz phrases of the post-2015 and financing for development arenas.

But can donors and organizations convince the private sector about the added value of investing in women and gender equality?

GIZ’s Nele Wasmuth hinted at some good news: Many major international players and corporations have already introduced gender-related policies and codes within their companies “because the evidence about its benefits is there.” Wasmuth highlighted a number of recent international studies that showed, for example, that Egypt’s gross domestic product could increase 35 percent if women were more integrated into the economy.

“The big economic players know that, but they are lacking the tools to do it,” she said.

Wasmuth told Devex that GIZ had recently developed an innovative tool to address gender diversity management in private sector companies. The tool offers companies a full gender audit, implemented and funded by GIZ, in return for a commitment on the side of the companies to elaborate and implement public-private partnership projects on the basis of the results of the audit. Companies also need to commit to funding at least 60 percent of the resulting project costs.

After an initial EU sponsored phase with European companies, the project was launched by GIZ in four partner countries in the MENA region: Egypt, Jordan, Morocco and Tunisia. Through a competitive call, eight companies were selected in sectors as diverse as IT, textiles, banking, pharmaceutical and telecoms. Interest from the private sector and business associations was so high, said Wasmuth, that a new financial commitment to increase the number of participating companies to 20 has recently been under consideration by Germany.

The project has already been a success story: Vodafone Egypt, for example, which employs over 8,000 employees, asked GIZ to help them comply with the board’s obligation to bring in gender policies across their annual objectives.

“The audit phase is a very long and detailed process. It is important to have the commitment of the company, as Vodafone has shown, to be able to complete the process successfully. And it was worth it. Once the company saw the hard numbers, they were very happy with the findings, which they said could be used for many other projects,” Wasmuth said. Vodafone has already selected and agreed to fully fund one resulting project.

5. Fuel women’s business instinct.

Women can also be the motor of development, by becoming entrepreneurs. To that end, they need to get the same starting conditions as their male counterparts. According to EBRD, tackling the issue of access to finance is a key starting point: Misconceptions need to eliminated, with women often seen by banks as higher risk than men — despite all evidence showing the contrary.

To incentivize banks, EBRD works on both the supply and the demand side, by, for example, providing 40 partner banks in UfM’s target region with first loss risk cover, in exchange for agreeing to provide long-term loans to women entrepreneurs. It also provides women with tailored business advice to ensure their initiatives thrive, helping them comply with loan conditions.

All this is done through innovative, catalytic financing: by blending 60 million euros ($68.2 million) of donor grant funding, 400 million euros worth of EBRD loans as well as the bank’s own capital — bringing the total available funding for the region to 600 million euros. As a result of this program, more than 10,000 women are expected to access loans and mentoring opportunities.

So let’s assume all constraints for women’s participation in the economy are removed, access to finance and business advice has been provided and gender-sensitized and powerful public and private partners and allies are secured — what is it that still hinders woman from being the motors of our societies?

The answer may lie with women themselves. Nadia Ben Bahtane, director of marketing and communication at the Intelcia Group and the first Moroccan woman to swim across the Strait of Gibraltar addressed her audience: “Do not choose between your family, your work and your passion — just do it all!”

Join Devex to network with peers, discover talent and forge new partnerships in international development — it’s free. Then sign up for the Devex Impact newsletter to receive cutting-edge news and analysis at the intersection of business and development.

About the author

  • Sibylle Koenig

    Sibylle Koenig is a development consultant and policy adviser with 10 years of experience in managing, monitoring and evaluating international aid programs and grant schemes, as well as advocacy. She has worked for a variety of organizations, including the European Commission, U.N. and bilateral aid agencies and NGOs in Latin America (4 years) and Europe, with extensive work travel to Africa (Tanzania, Uganda, Mozambique, Kenya, Botswana) and Asia (Cambodia, Vietnam, Thailand, India, South Korea).