from Women and Foreign Policy Program and Women Around the World

Discriminatory Laws Cost the Middle East Billions of Dollars Annually

Female driver Azza Al Shmasani steps from her car after driving in defiance of the ban in Riyadh June 22, 2011. REUTERS/Fahad Shadeed

November 27, 2017

Female driver Azza Al Shmasani steps from her car after driving in defiance of the ban in Riyadh June 22, 2011. REUTERS/Fahad Shadeed
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Women and Economic Growth

Saudi Arabia

Labor and Employment

Women and Women's Rights

Economics

As families work tirelessly to increase their income, and nations drive ever harder to spur economic growth, it can be easy to overlook the fact that the secret to growth may be hidden in plain sight. Saudi Arabia realized it when trying to end its “addiction to oil.”

It can’t transform its economy without a bigger labor force, and it can’t reach its workforce targets without including women. And so, amid broader political and economic upheaval — from multi-billion dollar mega projects to an anti-corruption purge that detained many of the country’s most prominent officials — Saudi Arabia’s bid to modernize its economy included the unexpected step of permitting women to drive. This is likely not the last groundbreaking announcement from the kingdom.

Because until Saudi women can work, travel, file legal claims, and otherwise engage in public life without permission from their male guardians — their father or husband, sometimes even their son —the country won’t realize the economic potential of half its population.

And this is just the tip of the iceberg for the region. Widespread legal and cultural barriers restrict how women participate in society, according to a new report by the Organization for Economic Co-operation and Development (OECD), costing the Middle East and North Africa billions of dollars a year in lost income.

With only 21 percent of women employed (compared to 75 percent of men), the region has the lowest rate of women’s participation in the labor force. While women are more educated and skilled than they have ever been, few work in the private sector, fewer hold senior positions in any institution, and women-owned businesses tend to be informal, home-based enterprises with little opportunity to grow.

Combined this means lower productivity: women generate only 18 percent of the region’s GDP, despite accounting for half the working-age population. The McKinsey Global Institute estimates that increasing women’s participation in the workforce to the same level as men could nearly double the region’s economic output, adding $2.7 trillion dollars to the Middle East and North Africa’s GDP by 2025.

Why the disparity? The OECD recently documented dozens of discriminatory provisions in family and labor laws in Algeria, Egypt, Jordan, Libya, Morocco, and Tunisia that prevent women from contributing to their countrie’s economies. In Egypt, Jordan, and Libya, for example, women need the permission of their husbands or fathers to work, and in Libya, it is considered justification for divorce if a wife travels without her husband’s permission.

Across the region, laws perpetuate unequal access to assets: Family property is usually in the husband’s name, and women cannot access it if they are widowed or divorced. In Tunisia, a female heir receives half as much inheritance as a male heir; in Jordan, a 2010 regulation tightened the procedures to transfer inheritance rights after countless women were pressured to waive rights to their full inheritance. And because they have fewer personal assets, female entrepreneurs have a harder time securing a loan through collateral.

Labor laws restrict women’s working hours and the sectors in which they can work, thereby limiting the employment available to women. Libyan women cannot undertake work that is not “familiar with woman’s nature”; in Jordan, the Ministry of Labor determines from which industries and jobs women are prohibited. And then there’s enforcement: Women face sexual harassment when they travel to or are in the workplace, but judges and police across the region rarely punish the perpetrators of sexual assault.

Research elsewhere has documented that legal reforms can directly lead to economic and social gains. Within five years of Ethiopia removing the stipulation that husbands could stop their wives from working, women’s labor force participation increased and women were more likely to work in higher-skilled jobs. When India provided women and men the same rights to inherit joint family property, families spent twice as much on their daughters’ education and women were more likely to have bank accounts.

The relationship between how much freedom women have in their homes and how easily they can contribute to society outside the domestic sphere is linear. Until women are able to freely work, travel, and own property, reforms to business regulations or other strictly economic solutions will not be enough to decrease the gender labor gap.

Countries with discriminatory laws will continue to lose out until they remove the barriers preventing half their population from contributing trillions of dollars to their economy.

This piece appeared originally in The Hill.

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