Gonzalez, A. 'SheTrades' and we all benefit. GREAT Insights Magazine, Volume 6, Issue 2. May/June 2017.
More than a billion people around the world still live in extreme poverty. Trade makes a critical contribution towards accelerating and sustaining economic growth. However, to generate the economic transformation required to lift these one billion people out of poverty and achieve the goal of eradicating extreme poverty by 2030, trade will have to be shaped to account for the needs of the poor, the majority of whom are women.
The evidence is clear. When women do well, everyone gains. Yet their economic activity remains untapped and worse still, the gender gap to economic parity is widening. Women lag behind on key indicators such as access to and use of technology, and the rate of their participation in trade, with only one in five exporting companies surveyed by the International Trade Centre (ITC) across 25 countries being women-owned. Women entrepreneurs reported facing higher procedural obstacles in their experiences of exporting, greater gender based discrimination and higher costs to trade.
The causes are interrelated. Constraints to women’s economic empowerment are rooted in unaddressed gender biases and legal obstacles. In every economy of the world, women spend more than twice as much time on unpaid care work than their male counterparts, implying less time to spend on economic activities. Whilst on the legal front, despite the near universal ratification of the Convention on the Elimination of all forms of Discrimination Against Women (CEDAW), also referred to as the international bill of women’s rights, 90% of economies have at least one law discriminating against women’s economic participation. These obstacles range from the types of jobs women can do, to their ability to register a business, own property or obtain a piece of personal identification. These root causes mean women-owned business are smaller in size and often remain confined to the informal sector. Size matters in that it makes women-owned businesses more sensitive to trade costs. Informality matters in that it severely limits the contribution of these businesses to national growth.
These inequalities impede development, hinder prosperity and undermine national competitiveness.
Trade opening has had a particularly striking effect on the number of women working in export-oriented manufacturing and production sectors, from employing a higher share of women than non-exporting firms, to providing greater returns for them. Some 70-90% of the workers employed in export processing zones (EPZs) are women. Women also produce more than half of the world’s household goods and their share of informal employment generally matches or exceeds men’s.
Trade appears to offer greater incentives to remove gender biases and discrimination at the economy level, with governments seeking to harness the full productivity of women; with the private sector, with the recognised benefits of gender diversity; and at the individual level with women working in export-oriented sectors reporting greater empowerment and agency in the household.
It is estimated that there are 8 to 10 million formal small and medium-sized enterprises (SMEs) in developing countries with at least one female owner. These businesses are contributing to economic growth and poverty reduction. The plots in the figures below show a clear positive impact. They highlight the relationship between the rate of female firm ownership and the level of economic development as measured by annual growth of GDP, annual growth of GDP per capita and trade toGDP ratio, for a cross-section of 80 countries.
Figure 1. Positive correlation between rate of female firm ownership and GDP per capita growth
Source: World Bank Data
Figure 2. Positive correlation between rate of female firm ownership and GDP growth
Source: World Bank Data
Figure 3. Positive correlation between rate of female firm ownership and trade to GDP ratio
Source: World Bank Data
Women’s economic empowerment through trade is a strategic priority of ITC. ITC was the first international organisation to deliver a programme of this scope, analysing and addressing obstacles to women entrepreneurs’ participation in trade and skilling and linking them to global markets. ITC’s SheTrades initiative, launched in 2015, seeks to scale up the organisation’s efforts, setting a goal of connecting one million women to market by 2020; and has already within its first 18 months of establishment secured commitments from partners to connect over 800,000 women to market.
The initiative provides a blueprint of seven actions to unlocking women’s economic empowerment through trade and modalities for partners to collaborate with ITC to implement programmes and actions along the seven areas of action: collection and analysis of sex-disaggregated data on women’s economic activity; developing gender sensitive trade policies; leveraging government procurement to support women’s economic participation; working with the private sector to create economic opportunities for women, particularly with respect to markets; facilitating access to financial services and providing women with equal rights to own assets. But over and above these, we must all – men and women together – work to change social norms and stereotypes.
The SheTrades initiative is supported by a mobile and web app at www.shetrades.com where women entrepreneurs from around the world can network, find new buyers and access a range of tools and resources to become more competitive.
We must support that SheTrades because in doing so we ensure that growth is more inclusive, national economies are more competitive and the route to end extreme poverty is faster. SheTrades because it is good for all.
About the author
Arancha Gonzalez is the Executive Director of the International Trade Centre (ITC).
Photo: Launch of SheTrades initiative in Rwanda. Kigali, 22 March 2017. Credits: OGS Rwanda/Faustin Nkurunziza.
This article was published in GREAT Insights Volume 6, Issue 2 (May/June 2017).