The waste and underutilization of female human capital and capacity is a major drag on the performance and growth prospects of Arab economies.
Women make up more than half of the world’s population but own only one per cent of the world’s wealth, earn only a 10 per cent share of global income, and occupy just 14 per cent of leadership positions in the private and public sector.
Closer to home, women in the Arab world have the lowest rates of female labor force participation globally: 26 per cent compared to a global average of 52 per cent. They face insuperable barriers, discrimination, legal and regulatory hurdles, lack of economic opportunities, poor working conditions, and the absence of the institutional, societal support needed to leverage them into economic and public life. The real ‘Arab Spring’ is about the necessary paradigm shift, the transformation of women’s role in economic development and their empowerment.
WOMEN AND ECONOMIC DEVELOPMENT
What is the rationale behind the empowerment of women? There is a two-way relationship between economic development and women’s empowerment, i.e. enabling women to access the constituents of development: health, education, earning opportunities, rights, and political participation. While economic development helps bring about women’s empowerment, empowering women brings about changes in choices and decision-making, which have a direct, positive impact on development.
Poverty and lack of opportunity breed inequality between men and women, so when economic development reduces poverty, the condition of everyone, including women, improves. Gender inequality declines as poverty declines, so the relative condition of women (and children) improves compared to men with development. But economic development alone does not bring about parity between men and women. Policy action is necessary to achieve equality between genders. Such policy action is unambiguously justified because empowerment of women also stimulates further development, starting a virtuous cycle. In the other direction, continuing marginalisation and discrimination against women hinders development. The bottom line is that empowerment can accelerate development.
WOMEN ARE BETTER EDUCATED AND HEALTHIER
Arab countries have made rapid progress in reducing gender gaps in education and longevity, and in lowering fertility levels. Among the developing regions of the world, MENA achieved the largest decline (59 per cent) in the maternal mortality ratio between 1990 and 2008. Over the past decade, female school enrolments in the MENA have grown faster than male enrolments, with the female-to-male ratios currently in the high nineties and women are now more likely than men to attend university. They perform better at all levels of education.
With a significant investment in women’s education, Arab countries increased women’s productive potential and capacity to earn. But the low levels of female participation in economic activity means that the region is not realising the return on its investment. The human capital of women is being wasted.
Why the poor performance? Barriers to entry are numerous. Purportedly ‘protective’ labour laws make it costly for the private sector to actively hire women. Employment in the public sector is not a good incubation environment for skills generation for transition to the competitive private sector. The lack of access to finance is another barrier.
Globally, 47 per cent of women and 55 per cent of men have an account at a formal financial institution. The gap is wider in the MENA region: only 13 per cent of women as opposed to 23 per cent of men have an account. Absent a bank account, it is difficult to enter the formal economy and grow an SME.
To add to the disincentives, working women face the highest unemployment rates. The factor that spikes the total unemployment rate in the Arab region is the high female unemployment rate of 17.4 per cent (ILO, 2012). Arab women are on average twice as likely as men to be unemployed. Also, ironically, the younger and the more highly educated, the higher the unemployment rate amongst women.
INCREASING WOMEN’S PARTICIPATION CAN CHANGE ARAB ECONOMIES
A rough calculation indicates that if female labour force participation rates were at the same level as in the OECD (60 per cent), the MENA region could drastically increase GDP by 20-25 per cent. We could achieve a near doubling in growth rates if women participated at similar rates as men. The fastest growth rates would be achieved by those countries with the lowest female participation rates.
Iraq and Saudi Arabia could grow at eight to nine per cent per annum by 2030 and Jordan by seven to eight per cent. The economic performance and landscape of the Arab world would be transformed through the contribution of the skills, talent, labour and entrepreneurship of women.
However, this will not happen through the wave of a magic wand. We need to invest and do things differently. We have to change laws, institutions and regulations that marginalise and discriminate against women and youth.
CHANGE LAWS AND REGULATIONS
In national vision documents and national development policy documents, Arab governments usually make reference to the importance of women’s empowerment and their increased role in the economy as necessary for equitable local and regional development. However, gender discrimination in MENA is typically codified in law, frequently in discriminatory family laws or civil codes, restrictions on resources and entitlements, son biases and restricted civil liberties. In many countries, women must obtain permission from a male relative, usually a husband, father or brother, before seeking employment, requesting a loan, starting a business, or even travelling. Social institutions in the Arab countries embody some of the highest levels of discrimination in the world. As is clear from the map and the examples of Turkey, Malaysia and Indonesia, this is not a matter of Islam, but a matter of culture. It will take time and effort to change mind sets.
Similarly, the World Bank’s important survey on ‘Women, Business & the Law’ highlights that MENA is the region where women face the highest number of restrictions in their capacity to act. It also found that the greater the lack of legal parity is associated with lower labour force participation by women and lower levels of women entrepreneurship.
WHAT NEXT?
The waste and underutilisation of female human capital and capacity is a major drag on the performance and growth prospects of Arab economies. Post-Arab firestorm, empowerment of women should be a major priority on the region’s transformational and reform agenda. Making greater use of women workers increases growth and productivity, not only because women jobseekers typically have higher than average education, but also because this can increase mobility across sectors and jobs. The priority should be for an affirmative action programme that actively promotes women and reverses marginalisation and discrimination. We need corrective policies, laws and quotas. Reforms are necessary in the legal framework to support women’s rights, including property, access to finance and mobility. Removing the barriers to women’s economic participation can be a game changer for the region.
This period of transformation requires the contribution of women towards nation building: their increased participation in politics, parliament, and cabinets and even simply as voters can bring about a dramatic change in the way our civil societies are structured.
By: Dr. Nasser Saidi
