Harnessing inclusive investments in local economies ...

Gender equality is acknowledged in the 2030 Agenda as a fundamental human right, and as a driver of progress across all development goals. However, this will not be fulfilled and would remain as an ineffective driver unless we take concrete steps to significantly increase investment to close resource gaps, including through the mobilization of financial resources from all sources, including public, private, domestic and international resource mobilization and allocation. The 61st session of the Commission on the Status of Women (CSW)’s agreed conclusion also reinforced this last month (March 2017).

     This diversification entails that we adopt an inclusive approach. In fact, financial inclusion has been broadly recognized as critical in reducing poverty and achieving inclusive economic growth. It is not an end in itself, but a means to an end—there is growing evidence that it has substantial benefits for individuals. Access to accounts and to savings and payment mechanisms increases savings, empowers women and men, and boosts productive investment and consumption. Access to credit also has positive effects on consumption. But the benefits go beyond individuals. Greater access to financial services for both individuals and firms may help reduce income inequality and accelerate economic growth

    The current global workforce ratio can be a useful reference point here. Women make up at least 40% of the workforce in more than 80 countries, according to a Pew Research Center analysis of labor force statistics from 114 nations with data from 2010 to 2016.  Many of the sectors that are critical for economic growth in some of the developing countries rely heavily on women. Only one-third of the small and medium-sized enterprises (SMEs) in the world are run by women, and women own only a fraction of the world’s biggest companies. These businesses have unmet financial needs of at least US$ 320 billion a year, which constitutes their largest barrier to growth and development.

  Addressing this financing gap and investing in women-owned enterprises is therefore, one of the highest-return opportunities available for women’s economic empowerment in the 2030 Agenda. This will not happen without harnessing the full potentials of the local and rural economies across the globe. It is also critical to ensure the implementation of ‘leaving no one behind principle’ as we pursue private-public synergy in harnessing investments in local economies in ways that directly benefit women.

  At the local level, women’s employment potentials are often limited by lower education and social norms.  Too often, some of the existing jobs are not decent enough, and women are tapped into a cycle of unsustainable and low income cycle. Expanding public and private sector investment in local economy has the potential to contribute to care economy which can make a significant contribution to gender equality and women’s economic empowerment

  The informal economy, and small business enterprises specifically, provide a mechanism for women’s economic empowerment. They also create opportunities for women’s economic empowerment to address the intersectionality of gender, inequality and poverty, while also creating locally peaceful and just communities.  Although a sizable amount of the unmet demand for credit lies in the informal sector, many firms remain informal as they lack the incentives or capacity to formalize. Creating the appropriate environment for firms to formalize may take a long time, as it not only requires building an enabling environment—with solid institutions, laws and regulations, infrastructure, and inclusive education [including financial education for women]—but there is also a need to identify business-oriented incentives for firms, such as access to new market opportunities and access to financial and non-financial services, making it a profitable and realistic decision for firms to register their business.

  We need to strive to make informal employment in paid domestic work, home-based work and micro, small and medium-sized enterprises, as well as work in the agricultural sector and own-account and part-time work more economically viable for women by extending social protection and minimum living wages, and promoting the transition to formal employment. A tall order, something we cannot avoid.

  The High-Level Commission on Women’s Economic Empowerment reaffirms the importance of significantly increased investment to close resource gaps for achieving gender equality and the empowerment of all women and girls, including through the mobilization of financial resources from all sources, including domestic and international resource mobilization and allocation, the full implementation of official development assistance (ODA).

  While it is important focus on investments at local level, we need to make sure that existing ODA are better utilized to create enabling environment to accelerate the achievement of women’s economic empowerment in the changing world of work.