Development Channel

This post is from Isobel Coleman, Council on Foreign Relations (CFR) senior fellow and director of the Civil Society, Markets, and Democracy initiative, and Dina Habib Powell, global head of corporate engagement at Goldman Sachs and president of the Goldman Sachs Foundation.  A staggering six hundred million new jobs are needed globally over the next fifteen years to keep employment rates at their current level. This is especially daunting given slowing global growth rates. One bright spot in this enormous challenge is a powerful, and often overlooked, source of job creation: women entrepreneurs. In the United States, women-owned businesses account for approximately 16 percent of all jobs in the economy, and with women graduating from university at higher rates than men, that percentage is expected to grow in coming years. Governments around the world are beginning to wake up to the economic benefits of women’s empowerment. Kathy Matsui of Goldman Sachs first wrote about "womenomics" in 1999 when she advocated that Japan could increase GDP by as much as 15 percent by tapping the potential of women. Fifteen years later, Prime Minister Shinzo Abe has made greater female workforce participation the cornerstone of his strategy to accelerate the Japanese economy and has proposed new policies that will address childcare, tax distortions, and female representation in government. In most economies, significant barriers inhibiting women from reaching their full potential remain. A recent International Monetary Fund paper shows a GDP per capita loss as high as 27 percent in some regions as a result of not fully engaging women in the labor force. In certain countries, the loss is even bigger. The IMF paper estimates that in Egypt, for example, raising women’s workforce participation rate to that of men would lift the country’s GDP by more than a third. Globally, gains in women’s participation in the labor force have stalled; women continue to work in lower paying and less productive sectors than men; and there are still laws in many countries that restrict women’s movements and choices. A World Bank study shows that almost 90 percent of the 143 economies researched still have at least one legal restriction on women’s economic opportunities, including seventy-nine economies that restrict the types of jobs women can perform. There is also a lack of role models to inspire more women to join the workforce and change societal attitudes.  In addition, women are less likely than men to know other entrepreneurs and more likely to have weaker professional networks. Finally, access to capital remains a significant constraint to engaging women productively in the world economy. The International Finance Corporation (IFC) estimates that 70 percent of women-owned SMEs in the formal sector in developing countries lack access to capital, resulting in a global financing gap of $285 billion. In 2008, Goldman Sachs launched the 10,000 Women initiative to address the constraints facing women entrepreneurs in emerging markets by providing them with business training, mentoring, and networking opportunities. A new evaluation of the program conducted by Babson College, and released at the Council on Foreign Relations today, demonstrates that targeted interventions can indeed help women grow their businesses and create jobs. The study found that nearly 60 percent of graduates created new jobs, on average more than doubling the size of their workforce. Eighteen months after graduation, nearly 70 percent of the women had increased revenues, and the average growth across all participants was 480 percent. The potential to replicate these results on a broader scale by providing more women with greater access to business training, mentoring, networking, and capital is enormous. Goldman Sachs 10,000 Women is expanding its efforts and has recently launched a new partnership with IFC, a member of the World Bank Group, to create the first ever global finance facility dedicated to women entrepreneurs. The facility will enable approximately one hundred thousand women entrepreneurs around the world to access capital and grow their businesses. With 126 million women starting or running businesses in sixty-seven economies around the world, improving their growth prospects will reverberate throughout the global economy and ultimately lead to healthier, safer, and more prosperous communities—for everyone.

Early this summer, a group of congresswomen returned from a visit to Afghanistan. Their takeaway: “Women are now participants—and in many cases, leaders—in a society that once systematically subjugated them.” Indeed, women in Afghanistan have made great strides in recent years, but many challenges remain—especially in the face of imminent U.S. withdrawal from the country. A recent World Bank report, titled “Women’s Role in Afghanistan’s Future: Taking Stock of Achievements and Continued Challenges,” explores the advancement of women’s rights in Afghanistan following the fall of the Taliban in 2001. A follow-up to this 2005 World Bank Report, the publication evaluates women’s development and participation across four sectors of society—health, education, work and employment, and legal rights and voice. It also provides recommendations for the country to continue its focus on gender as part of a national development strategy. The report highlights key advancements for women across all four sectors, particularly applauding the progress that has been made in the realms of health and education. Since 2005, Afghanistan has seen a boost in both maternal health and infant survival ratios. My colleague Isobel Coleman and I detailed some of these advancements in our 2011 working paper. The maternal death rate is now 327 per 100,000 live births, down from an estimated 1,600 per 100,000 live births. Similarly, the infant death rate decreased from 115 fatalities per 1,000 live births to 74 per 1,000 live births. In addition, the percentage of women aged fourteen to forty-nine who use contraception has increased since 2005, rising from only 5 percent to 21.2 percent. Afghanistan has nearly doubled the number of health facilities capable of providing adequate reproductive care from 1,214 to 2,047 and has vastly expanded its network of qualified female health professionals. With regard to education, the report cautiously lauds the increase in the number of girls attending all levels of school as well as the expansion of the government’s network of schools. The proportion of female primary school students is now at 40 percent, up from 34 percent in 2005, and women now account for 35 percent of secondary school students. The proportion of female university students has remained static since 2005 at 19 percent. However, the actual number of both male and female university students in Afghanistan has been increasing annually. Alongside the progress, however, there is significant room for further gains: all of these figures remain low by international standards. Malnutrition, domestic violence, forced marriage, child marriage, illegal abortion, and mental health issues remain widespread. In addition, the Afghan educational system continues to suffer from a lack of female teachers, inadequate sanitation facilities, and critical security threats, including poisoning incidents and other attacks on girls’ schools. To further advance the health and education of women in Afghanistan, the report recommends increasing investment in human resources, including mental health professionals. Women’s employment status and legal rights have seen much more limited advancement since 2005. As noted in the report, women continue to be primarily employed in informal, home-based work and are significantly under-represented in the private workforce. When women do work outside the home, it is mainly in low-income jobs such as tailoring, cooking, and domestic services. Only 3.5 percent of urban women—and even fewer in rural areas—are employed by the government, and just 21 percent of the entire female urban workforce is employed. Women also remain under-represented as professionals in the legal system, comprising less than 10 percent of judges, attorneys, and prosecutors. This serves as a barrier to women’s access to justice and decreases the number of women who report gender-based violence. While women have significantly increased their numbers in the political process, with greater female voter turn-out and more female candidates running in elections, female candidates continue to experience harassment, intimidation, and security threats. They also have fewer resources to spend on polling observers, making them disproportionately affected by voter fraud. The report suggests that legal reform continue in Afghanistan in order to expand the rights of women and that greater investment be put towards female professionals in all fields, especially in the private and legal sectors. To protect and advance women’s rights, development, and participation in society post-2014, the World Bank recommends that Afghanistan focus on: A political settlement that includes women to achieve stability Security developments to advance women’s safety in public places, including schools and the workplace Increasing the number of female workers across all sectors and geographies, including the most under-served areas Engaging religious leaders on key issues pertaining to women’s participation in society These recommendations have the potential to work in tandem with the policy suggestions laid out by CFR Fellow Catherine Powell in her most recent working paper. While the World Bank’s recommendations are addressed to the Afghan government, Powell directs her recommendations to the U.S. government, particularly following the withdrawal of U.S. troops in 2016. The structures Powell recommends creating within the U.S. government, such as a National Security Council–led interagency working group, would support the economic, development, and political stability goals outlined by the World Bank. Afghan women are contributors to their societies.  And with further investment and support from their own government and the international community, they will continue to play a role in building a more stable, secure future for their country. It is in the international community’s best interests that their efforts succeed. For more information on women in Afghanistan, please see CFR Fellow Catherine Powell’s recent working paper, “Women and Girls in the Afghanistan Transition.”