Voices from the Field features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is authored by Cherie Blair, wife of the former British Prime Minister Tony Blair, and founder of the Cherie Blair Foundation for Women.
Eleanor Roosevelt once wrote, “What you don’t do can be a destructive force.” In other words, apathy is deadly.
I was reminded of this sentiment last week, as I took part in a panel discussion at the Milken Institute’s Global Conference, on the issue of how to sustain growth in emerging markets. The question is timely: after enjoying years of success, emerging markets are entering a less sanguine era, with 2015 marking their fifth consecutive year of slowing growth. The International Monetary Fund (IMF) warns that emerging and developing economies will converge to advanced economy income levels at less than two-thirds the pace it had predicted a decade ago. In the words of Christine Lagarde, a “new economic reality” has emerged.
Clearly, change is needed. There is no better time for Eleanor Roosevelt’s rallying cry.
I believe that one solution lies with women. Specifically, we need to bring more women into the workforce in developing and emerging markets.
Over the last three decades, women’s participation in the global workforce has hovered at around 51 percent, dipping as low as 21 percent in the Middle East and North Africa. Where women are engaged in employment, they tend to be concentrated in lower productivity sectors, often working in precarious, under-paid, and unprotected conditions.
Swelling the ranks of women in the workforce allows an economy to make full use of its human capital. It will be crucial to sustaining growth in emerging markets in the long term. Research by the International Labour Organisation (ILO) shows that economies with high female labor force participation rates are more resilient to economic shocks and suffer from slowdowns in economic growth less often. Last year the McKinsey Global Institute put an astonishing monetary value on women’s work, claiming that achieving global gender parity in economic activity could add $28 trillion to annual global GDP in 2025—with almost $3 trillion added to India’s GDP alone.
Bringing more women into productive work is also a powerful anti-poverty device, since research shows that women plough the majority of their income back into the health and wellbeing of their families.
I also believe there is a special role to be played by women entrepreneurs, and particularly women owners of small and medium-sized enterprises. This is the focus of the work of my foundation. We empower women in developing and emerging markets to grow their enterprises beyond the micro level because we believe the SME sector has huge potential to drive job creation and fuel growth in local economies. Over the last year my foundation has supported the creation of 2,100 new women-owned businesses and 2,200 new jobs.
Women are a huge untapped source of economic growth. Unlocking their full potential will require concerted action by both public and private sectors.
Governments, for example, can implement policy changes which make childcare more affordable, and flexible working more accessible, allowing women to balance their family responsibilities with work. Tax incentives can also help boost women-owned businesses. In Turkey, women entrepreneurs have benefited from state provision of interest-free loans, with their first businesses being free from taxes for the first three years.
Banks also have a huge role to play in extending women’s access to the financial services they need to establish and grow businesses. They can do this by designing products specifically for women, providing flexible and longer repayment periods on loans, and easing collateral requirements in recognition of the fact that women often struggle to provide evidence of assets such as land and property ownership.
There is a huge range of actions that can catalyze the economic potential of women. But recognition must come first. Recognition that leaving the economic status quo unchallenged and unchanged is not an option.
All too often, efforts to realize gender equality are seen as an ‘add on,’ rather than integral to macroeconomic policy. If we are to sustain growth and drive down poverty across the world’s emerging markets, this mindset must change.
This article appeared originally on LinkedIn.