Keyword

In December 2017, the Buenos Aires Declaration on Trade and Women’s Economic Empowerment was adopted at the 11th WTO Ministerial Conference to increase women’s participation, and remove the barriers that they face, in international trade. This declaration recognized the importance of “incorporating a gender perspective into the promotion of inclusive economic growth…the key role that gender-responsive policies can play…that inclusive trade policies can contribute to advancing gender equality and women’s economic empowerment…that improving women’s access to opportunities and removing barriers to their participation in national and international economies contributes to sustainable economic development.”1 By September 2020, 127 WTO members and observers around the world had joined the declaration (International Trade Centre, 2020). In the past few years, various reports and initiatives (Korinek et al., 2021; World Bank & World Trade Organization, 2015, 2018) have recognized the important connections between trade, gender and women’s economic empowerment.

In 2020, Canada, Chile and New Zealand signed the Global Trade and Gender Arrangement to “promote mutually supportive trade and gender policies in order to improve women's participation in trade and investment and in the furtherance of women's economic empowerment and sustainable development”.2 Mexico (in 2021), Colombia and Peru (in 2022) have subsequently also joined the arrangement as participants. At this time, a draft WTO Ministerial Declaration on trade, gender equality and women’s economic empowerment, which was scheduled for adoption at the 12th WTO Ministerial Conference in June 2022 has been put on indefinite hold.3 However, the issue of ‘trade, gender equality and women’s economic empowerment’ will likely remain at the forefront of current and future public policy discussions.

This should not be surprising since the economic and societal benefits of increasing women’s participation in trade are well documented. We started this book by arguing that international trade has the potential to provide women with more and better employment opportunities, drive productivity and economic growth, and thus empower women and improve gender equality. And yet, despite the long-run increase in global trade flows, and much progress on women’s economic empowerment, gender equality remains a distant goal according to most progress reports around SDG 5 on gender equality. While the rise of GVCs provides more opportunities for firms around the world to participate in international trade, SMEs, including those that are women-owned and women-led, are underrepresented in international trade when compared to larger firms.

It is against this background that we wanted to examine the relationship between trade and job creation for women, and the extent to which these jobs contribute to women’s economic empowerment. Specifically, we focused on the following three questions: (1). Why—and under what circumstances – do some trade sectors create more jobs for women and others do not? (2). To what extent are the jobs created contributing to women’s economic empowerment? (3). What strategies and policies are needed to ensure these sectors work optimally? Our ultimate goal, as formulated in the third question, was to propose policies that should be put in place to ensure that women benefit from trade.

As discussed in previous chapters, this project focused on SMEs as the unit of analysis, given the significant contributions that they make to domestic output and employment. We made sure that there was enough representation across different sectors (agriculture, manufacturing and services) and that there were enough women-owned and women-led SMEs that could be examined for this research project. This allowed us to understand the challenges that women-owned and women-led SMEs face relative to those that are not. The research adopted a two-stage research design. First, original survey data for 610 SMEs across six countries—two (Cambodia and Vietnam) from Southeast Asia and four (Ghana, Madagascar, Nigeria and Senegal) from sub-Saharan Africa—was collected and analysed (Chapter 2). Second, the survey data was complemented by qualitative analysis in Chapters 3 and 4 to answer the three research questions mentioned above. The qualitative analysis consisted of focus group discussions, key informant interviews and in-depth interviews with different stakeholders that included workers (male and female), employers and managers, government officials, and trade support organisations. As this project happened during the Covid-19 pandemic, we wanted to know how it had impacted the operations of SMEs in our study areas.

5.1 Key Findings

While there is a lot of evidence that women entrepreneurs across the developing world face various barriers every day, we found that these barriers varied across the six countries that we examined. For example, the survey data that we collected revealed that the perceived favourability towards women-owned enterprises varies across countries, regions and sectors. This is important since women tend to often be concentrated in certain types of activities more than others, for instance textiles and apparel, and including in the informal sector. Context thus matters, and not all SMEs—across countries and sectors—face the same set of challenges. It is likely that such differences would be amplified if we extended our analysis to more countries and regions in the future. We also found that the distribution of employees by gender varied across countries; most respondents mentioned that women were hired because of their unique skills and rarely did we find evidence that there were deliberate policies in place to bridge gender gaps. This means that it is more difficult for women to aspire to certain occupations in the SMEs where they currently work, or employment in other sectors, that have been traditionally seen as more appropriate for men. The qualitative analysis that we conducted confirmed this finding in several cases.

Despite the absence of specific policies across the study areas to close the gender divide, we also found that women-owned exporting SMEs tended to hire more women than men. While we cannot completely ignore that this may be tied to the nature of work, it is nonetheless an encouraging observation since our analysis also showed that output per worker and salaries (for both men and women) are higher in exporting SMEs than in non-exporting SMEs. This means that trade creates opportunities for women to be hired in well-paid occupations. Beyond salaries, we wanted to know if employees were rewarded with other benefits. Our survey results showed that there are differences in salaries by gender on a country-by-country basis but no difference in other benefits. An overwhelming number of SMEs that provide benefits (pensions, health insurance, paid sick leaves maternity leaves etc.) to their employees provide the same level of benefits to both men and women.

One in five SMEs surveyed for this project mentioned that women-led SMEs encounter more difficulties in trade, but the number varied significantly across countries. On a regional basis, women-led SMEs across the four African countries encounter more difficulties in trade than the two Asian countries. When respondents mentioned that women-led SMEs might encounter more difficulties to trade, they cited cultural and social (often family-related) perceptions of women, the challenge of reconciling work and family obligations, difficulties to obtain finance and collateral, the relative strength and competitiveness of male-owned SMEs, technological challenges, and difficulties in finding trade-related information. Interestingly, even if gender-related constraints such as lack of access to finance for women entrepreneurs was deemed important, it was generally not seen as more important than other constraints such as government regulations and infrastructure. This was somewhat surprising since the various challenges that women entrepreneurs face across the developing world, including their ability to engage in international trade, has been well documented in the existing literature.

The survey data that we collected showed that at least initially most SMEs operate domestically, and while some end up exporting their products, others do not. The decision to export is based on several factors including the nature of the business (such as the cost of inputs, the volume of production and price obtained for goods/services), the size of the local market, access to finance, knowledge of external markets and level of support from government. We also obtained overwhelming evidence that the Covid-19 pandemic had significantly affected SMEs, whether they were women-owned/led, or not. In hindsight, we could, and should, have asked whether the latter made the impact of the pandemic more difficult to manage for women. It was clear from our survey that this exceptional event had been felt by everyone and almost 65% of respondents mentioned that the effects of the pandemic had persisted over time. And since both the survey results and qualitative analysis revealed that women-owned or women-led SMEs tend to be concentrated in some sectors (such as retail) which would have been much more affected by lockdowns, and the fact that women have to manage both work and family obligations, it would not be surprising that the pandemic affected them more. This has been confirmed in other studies. For example, a study by the International Finance Corporation (2021) of 13 African countries, which included the 4 African countries considered in the current study, found that women-owned/led MSMEs were more affected by the pandemic because of their size and concentration in specific sectors.

Our qualitative analysis of the four African country cases showed that job creation in SMEs was driven by the nature of work, the fact that these SMEs were engaged in exporting, and the working conditions or work environments that were offered to employees. This resulted in some sectors such as textiles and food processing being dominated by women, while others are not because the requirements (such as the need to work overtime) are more difficult to reconcile with other family obligations. Almost all the participants acknowledged the important role of exports in creating jobs, but they also pointed out that the work environment is more important, regardless of whether an SME is engaged in exports or not. They also indicated that too many jobs created in the export sectors for women are low-skilled and do not contribute significantly to reducing inequality in women’s access to skills and education.

The cases of Cambodia and Vietnam also showed that a large proportion of women were employed in certain sectors such as textiles and apparel, and in specific tasks along the value chain. This outcome is heavily influenced by gender bias and preferences of employers, as well as the fact that women have less access to education and skills training. For various reasons related to physical safety, security concerns and lack of market information, women are often faced with limited job options and thus do not have a lot of bargaining power vis a vis their employers. So while trade has no doubt contributed to women’s labor force participation in both Southeast Asian countries, important gaps exist when it comes to diversifying jobs, skills, businesses and markets for women employees and employers. Female workers are concentrated in low-paying (even if higher than in the non-tradeable sector), low-skilled jobs, and stuck in low value-added manufacturing sectors. Women entrepreneurs are overrepresented in micro and small enterprises, and in a few specific industries where market saturation limits their ability for growing their businesses and competing in international markets.

In all the six countries examined in the current project, women became empowered through different channels such as access and control over resources, decent work, control over their own time and income, as well as having a voice and being able to meaningfully participate in decision-making. But this does not happen at the same pace/level in different contexts.

5.2 Policy Recommendations

In terms of future research, there is a need to collect gender-disaggregated data systematically for more countries/regions and sectors, and for both exporting and non-exporting firms to see what impact they have on women’s economic empowerment and gender equality. The survey that was conducted for the current project is the beginning of what we consider as an important step to collect data for more countries and thus allow for more cross-country and regional comparisons. The kind of gender-related data and indicators that are currently available from existing surveys such as the World Bank Enterprise Surveys are too crude to examine women’s economic empowerment and could be enriched by more specific questions related to the latter.

Given what we found from the survey and qualitative analysis, there are several recommendations that could be implemented to assist women entrepreneurs and workers so that they can take advantage of the opportunities that are made possible by international trade. An important lesson that we learnt from conducting the survey is that trade-related constraints are context-specific and thus require tailor-made solutions. We also did not find enough evidence of deliberate policies to address gender gaps. Opportunities that became available to women happened naturally more than anything else. For example, more women are hired as a result of job requirements, or through SMEs that decided to export their products, as opposed to targeted policies that focused on women employment. This explains why some sectors remain largely inaccessible to women in the countries that we studied.

The six case studies also revealed that broader intentional policies from both governments and TSOs are needed. Governments should provide the enabling environment for women entrepreneurs and workers to benefit from trade, and this includes access to information, access to finance and financial products specifically aimed at women, the depoliticizing of intervention programs, and less complicated exporting requirements. In the case of TSOs, more capacity building for women entrepreneurs, more advocacy and support packages for women-owned/led SMEs, and a better association with women businesses, especially in rural areas, would go a long way towards empowering women further.

For example, the Cambodian and Vietnamese cases clearly showed that TSOs should provide tailor-made business services that are designed explicitly for women exporters such as a digital market intelligence portal, one-stop shops for government services and the creation and nurturing of female exporter networks. TSOs and relevant ministries should be encouraged, through policy research and advocacy forums, to integrate gender components into trade-related policies and strategies. The African cases also showed a need for stronger public–private partnerships between government agencies, women-owned/led SMEs and trade facilitation bodies. They could also benefit from targeted solutions such as the enforcement of existing laws and rights for women to the creation of an enabling business environment and the easing of export requirements, to the inclusion of women in the trade facilitation policymaking process, and deliberate policies that incentivize exporting SMEs to employ more women. Finally, it should also be noted that the needs of female businesses and employees are not always taken into account when negotiating and implementing trade agreements.

Policy recommendations need to be backed by sufficient resources that are not always available locally, and the contributions of bilateral, multilateral and regional donors through aid for trade could play an important role in that regard. Since the launch of the Aid for Trade initiative in 2005, gender perspectives have been increasingly included in aid for trade as recommended by the 2006 WTO Aid for Trade Task Force. However, there is significant room to grow the share of aid for trade towards gender equality and invest in projects whose primary objective is to promote gender equality (OECD/WTO, 2022).

Notes

  1. 1.

    https://www.wto.org/english/thewto_e/minist_e/mc11_e/genderdeclarationmc11_e.pdf.

  2. 2.

    https://www.international.gc.ca/trade-commerce/inclusive_trade-commerce_inclusif/itag-gaci/arrangement.aspx?lang=eng (Accessed on May 9, 2023).

  3. 3.

    https://sdg.iisd.org/commentary/policy-briefs/wto-ministerial-declaration-on-trade-and-gender-on-indefinite-hold/ (Accessed on May 18, 2023).