By YDC's Delegation to the 2017 World Bank / International Monetary Fund Annual Meetings
If we are going to achieve the World Bank’s Sustainable Development Goals, we need to put women at the forefront. Here are five reasons why:
Hundreds of government officials met with civil society organizations in Washington, DC in October 2017, to discuss issues of global concern, including the UN’s Sustainable Development Goals (SDGs). Five young Canadians attended the event as part of Young Diplomats of Canada’s delegation to the World Bank and International Monetary Fund 2017 Annual Meetings. Among the issues of global concern discussed was gender equality and investments in women.
The empowerment of women and girls is a foundational element of the SDGs. The agenda will not be achieved with the status quo, and the goals certainly will not be achieved unless we invest in women. Here are five reasons why:
1. Thought Diversity
Thought diversity boosts innovation and problem-solving, and contributes to increased economic growth and quality-of-life. Gender diversity is one such differentiator, and according to the McKinsey Global Institute’s recent study, if women were to play an identical role in labour markets to that of men, as much as $28 trillion, or 26 percent, could be added to global annual GDP by 2025. McKinsey also mapped 15 gender-equality indicators for 95 countries and found that 40 of them have high or extremely high levels of gender inequality on at least half of the indicators. Global organizations, both public and private, need to lead the charge on increasing thought diversity whether it is to increase our global GDP, increase quality-of-life, find new innovations and discoveries, or simply because it is the right thing to do.
2. Girls’ Education Leads to Economic Growth
Global institutions and charitable organizations like the World Bank Group, the Bill and Melinda Gates Foundation, and others have been talking about girls education for years, but why haven’t these conversations penetrated broader financial and governmental circles? After all, it is a proven fact that gender gaps in education harm economic growth and result in a lower GDP (ranging from 0.4-0.9% when compared to countries with greater gender parity in education). Both the public and private sector need to understand that not investing in girls results in a huge opportunity cost. Word Bank Group officials estimate that the total missed GDP growth is between 1.2% and 1.5%.
Those who are aware of the macroeconomic argument for investing in girls education often cite that gender gaps have been closing. But 131 million girls are still being left behind. For those interested in tackling global poverty and poor health and economic outcomes around the world - sending girls to school is without question one of the most cost-effective strategies governments, private sector actors, and NGOs can pursue.
3. Investing in Women Means Investing in Communities
While the moral argument for investing in women is clear, evidence shows it is also the responsible economic choice. Women invest an estimated 90 percent of their income back into the household, compared to the 30-40 percent reinvested by men. When women invest in their households they are investing in good health, reducing hunger, quality education and ending poverty. In other words, they are investing in the Sustainable Development Goals. In fact, a study in Brazil showed that the likelihood of a child’s survival increased by 20% when the mother controlled household income. There is plenty of evidence to suggest that when you invest in women there’s a multiplied effect on the return, but women still have less access to finance and less control over household incomes. To promote investment in women we need more gender budgeting and fiscal policies that support gender equity goals.
4. Changing the Entrepreneur’s Profile
Female entrepreneurs currently run 30% of all small businesses and collectively yield $1.4 trillion in sales (2015). And although predictions have been in favour of women leading the charge in entrepreneurship, there still remains the issue of funding. Currently, women receive 7% of venture capital funding, a number both insufficient and unreasonable in meeting the current financial needs of growing a small business.
To move forward with the recently launched Women Entrepreneur Finance Initiative (We-Fi), aimed at increasing the amount of funding for women led-startups in developing countries, or other similar initiatives we need to re-assess what the current profile of an entrepreneur is, angel investors and venture capitalists need to be engaged in many ways: investing in women led start-ups, showcasing the data that supports the increased investment and most importantly increase/create mentorship programs aimed at assisting new female founders into the space.
5. Full Participation in the Labour Force
Simple economics tell us that economies grow when more people are working. In a world where men represent a disproportionately high part of the labour force, it is clear why increasing the number of women can result in faster economic growth. But there are deeply ingrained societal factors, and institutionalized gender biases preventing female participation. Over 143 countries still have a legal differences that restrict economic opportunities for women, with 79 going even further to restrict the types of jobs that women can do.
How can an economy advance when structural impediments are in place? One could argue that women still contribute equally through informal work, given that women invest a considerable amount of time into activities that are not measured, and therefore fill the productivity gap, but this doesn’t account for value that paid work brings to an economy through spending. ActionAid, a UK-based NGO, projects that women could increase their global collective income by up to 76 per cent if the participation gap in formal employment was closed.
Only in the last century have gender roles in the labour force been challenged, and only in the last few decades has the participation gap closed. Societies have increasingly been exposed to alternative norms and activism demanding women’s rights, gender parity, and equal income distribution - a corresponding increase in labour force participation illustrates the results of this. We have seen global growth in recent years magnified by more equal participation and greater labour force inclusion; an indicator that is both attractive and promising should it continue.