International Women's Day - March 8th, 2009
The Economic Crisis: The Impact on Women
Women play a critical role in driving economic development throughout the world. According to The Economist, the increase in female employment has been the main driving force of economic growth in the last few decades.
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1. “The Importance of Sex: The Economic Power of Women,” Economist: April 12, 2006.
Empowering women economically can lift entire families and communities out of poverty. Women in poor countries are more likely to spend their income on food, education and healthcare for their children -- creating powerful, positive and measurable benefits to society.
Despite the important role women play in driving development, women living in poor countries are likely to bear a disproportionate burden in an economic crisis. According to the UN Development Program, women make up a majority of the world’s poor. 2
2. Human Development Report, UNDP: 2006.
Since women will likely suffer the most during the ongoing economic crisis, there is a great need for USAID and other donors to expand economic opportunities for women. Furthermore, women can play a major role in rebuilding the world economy. World Bank Group Managing Director Ngozi N. Okonjo-Iweala says that it is not just about fairness, it is “smart economics." 3
3. “World Bank Calls for Expanding Economic Opportunities,” World Bank Press Release: January 29, 2009.
Impact on Women
- Higher unemployment rates for women in export oriented countries. The reduction in manufacturing jobs means higher unemployment rates for women since they make up 60 to 80 percent of export manufacturing workers in developing countries. 4
4. “The Economic Crisis and How It is Affecting Women Worldwide,” Women Thrive.
- Increased exploitation in both the legal and illicit economy. The reduction in jobs for women may mean higher levels of exploitation as women are forced to work in increasingly poor conditions, or worse, the illicit economy.
- Migration patterns may change as parents and/or children leave or return home in search of work, making them increasingly vulnerable to trafficking. Changing migration patterns may increase exploitation and trafficking of women and children for labor and commercial sex.
- Women are disproportionately impacted. Although the social impact of an economic crisis is pervasive among all social classes, it hits women and children the hardest since they make up a majority of the world’s poor and are increasingly vulnerable to exploitation.
- School drop out rates may increase among girls. Parents may be forced to take their children, especially girls, out of school and into the workforce to supplement scarce household incomes.
- Jobs created during an economic crisis target men. During an economic crisis, governments and donors tend to emphasize large infrastructure projects dominated by men to create jobs. Industries that include women are generally neglected, further contributing to the high unemployment rates of women.
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5. Elson, Diane. “Economic Empowerment and the Current Economic Crisis,” The Ottawa Citizen: November 28, 2008.
- Accessing credit may be even more difficult for women. In general, women in developing countries have a hard time accessing credit. The economic crisis may make it even harder due to credit tightening by banks.
- Remittances will fall, further exacerbating poverty. Remittances have already fallen in some regions, making it harder for women to provide for their families. 6
5. Lazo, Alejandro. “Remittances to Latin America Declines,” Washington Post: October 1, 2008.
Examples of USAID’s Work
Economic programs targeting women will be even more critical in the current global financial crisis. The following are examples of the work that USAID is supporting. In May 2008, USAID and the Department of State launched The One Woman Initiative: The International Women's Empowerment Fund for Justice, Opportunity, and Leadership. The Fund was established in recognition of the fact that when one woman is empowered, the world benefits. The Fund is a public-private partnership that will mobilize $100 million in its first five years to empower women in countries with significant Muslim populations.
In Ethiopia, USAID is working with the Bank of Abyssinia to provide a $4.28 million loan portfolio guarantee for women-owned and managed small and medium-sized enterprises. The percentage of women-owned enterprises decreases as enterprises grow in size. Women entrepreneurs highlight the lack of access to finance as the main barrier to growth. In order to address this impediment and enable women entrepreneurs to grow their business beyond the bounds of microfinance, USAID is working with the Bank of Abyssinia to give women access to finance.
USAID is working to increase the economic security and empowerment of women through the Greater Access to Trade Expansion (GATE) Project. The goal was to enhance the capacity of USAID Missions to ensure that their trade-related efforts gave the poor, especially women, a chance to take advantage of opportunities in the global economy. This project emphasized identifying gender-based constraints to participation in trade-related activities.
In Guinea, USAID linked good governance with increasing women's access to resources. The USAID-sponsored Intermediary Credit Service connected democratically-run rural economic women's cooperatives with formal banking institutions. The program stressed good governance and transparency. Selection criteria required democratic practices in the management of rural cooperatives as well as strong business plans.
USAID supported Jordan’s two leading businesswomen’s associations. The program emphasized strengthening their capacity to establish women-friendly work environments, and establishing a network of women power-brokers to support rising women leaders. USAID is expanding employment and entrepreneurial opportunities for women in the tourism and hospitality sector.
In Lebanon, U.S. government assistance promoted employment and increased the income of rural women through skills, resources, equipment and information, and integration into economic activities in agri-business and rural tourism. More than 300 women were assisted in the agribusiness sector, and more than 347 women have been economically integrated into the rural hospitality sector.
In Tanzania, USAID is helping to establish a secured lending system based on movable and intangible property. Women often do not have legal title to land or building for use as collateral, but can use movable, income generating property to obtain loans. The new system will provide greater credit access to women.
With USAID assistance, more than 2,600 women in El Salvador received agricultural training to raise efficiency and ensure occupational safety; 850 women received trade/investment support to take advantage of Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) opportunities; and 2,155 women were trained in natural resources management and biodiversity conservation.
In Northern Mali, 2,700 new women micro-entrepreneurs received conditional seed capital, business training, and help in forming saving groups while 1,097 already established women micro-entrepreneurs received additional training and networking assistance. Efforts to promote women’s leadership, women’s empowerment, and participation in joint decision-making were supported and incorporated in all components of the micro-enterprise development program. Participation in the annual regional meetings promoted women’s leadership and provided a forum for women to express themselves.
Through the Empowering Women Leaders in Business project, USAID will address the legal and institutional constraints for women entrepreneurs in Rwanda and Vietnam while providing technical assistance to overcome gender-related barriers in business. These and many other examples illustrate USAID's commitment to and leadership in empowering women.
Recommendations for Action
Women can be a driving force for economic recovery, but they must be meaningfully included in economic and workforce development strategies. The following are some recommendations that will help increase women’s economic security during the ongoing crisis:
- Strengthening and expanding safety net programs for women and families;
- Creating a workforce development strategy that targets women while meeting market demands;
- Enhancing women’s ability to succeed in business through general and industry-specific business training programs and networking opportunities;
- Establishing or expanding business development services to help start and scale-up women-owned enterprises (e.g. women’s business resource center, women’s chamber of commerce, or a one-stop-shop for local entrepreneurs);
- Expanding access to credit;
- Creating a leadership and mentoring program that links successful women entrepreneurs with up-and-coming business women;
- Establishing and protecting housing, property and inheritance rights of women;
- Reforming discriminatory policies, legal systems and customary practices;
- Reinforcing legal services that can support women in defending their property rights;
- Expanding public education to support women’s property and economic rights;
- Creating opportunities for women’s leadership in economic recovery;
- Creating opportunities for women to be policy makers in the financial sector;
- Supporting legal services for women.
Additional Information
USAID Celebrates International Women’s Day
USAID Mission and U.S. Embassy Events for International Women's Day 2009
USAID Supports Gender Equality and Women's Empowerment
USAID Global Health Bureau Recognizes International Women’s Day 2009
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