Saturday, June 13, 2020

Promoting Gender Equality and Economic Empowerment

The financial reforms of the 1980s and 1990s which took place on the most economy around the globe is supposed to increase the financial depth and usage of formal financial services such as saving, credit, payment, insurance and other financial related services. Decades after those reforms, the results are still not satisfactory, the access and use of financial services of the deprived sector is significantly low. So, the great challenge in front of the government and other concerned regulatory authorities is to address those constraints that exclude people from full participation in the financial services. Furthermore, as evidence from G20 Pittsburgh summit in 2009 and Alliance for Financial Inclusion’s Maya declaration in 2011, lack of access to formal financial services to a larger percentage of the working-age adult is a global concern. First, let’s try to understand financial inclusion in a generous way.

The World Bank broadly defines financial inclusion as means that individuals and business have access to useful and affordable financial products and services that meet their needs, transaction, payment, savings, credit and insurance delivered in a responsible and sustainable way. In the words of Centre for Financial Inclusion; all people who can use them have access to the full suite of quality financial services, provided at an affordable price, in a convenient manner and with dignity for the client as a state of full financial inclusion. In a different context, the definition made by the Reserve Bank of India, the central bank of India states Financial inclusion is the process of ensuring access to appropriate financial products and service needed by vulnerable groups such as weaker sections and low-income groups at an affordable cost in a fair and transparent manner by mainstream institutional players. The definition tries to address the real situation of developing countries. Furthermore, the national financial inclusion strategy (NFIS) 2017-2022 of Uganda states that financial inclusion as access to and usage of quality, affordable and adequate financial service that helps to ensure financial security. It involves the delivery of financial services at an affordable cost to all segments of society. These definitions from various institutions, agencies, and regulatory body show that the necessity of connecting the various deprived sectors of society with financial services to enhance financial inclusion. It is a key to improve the livelihood of the poor and disadvantaged people of society. Increasing access to financial services, such as payment, saving, insurance, and credit help them to manage their financial obligations and built a better future for their families while also supporting broad economic growth, development and poverty reduction.

The gender gap between male and female is significantly high in most of the sector, whether it is in law-making or only in the context of general employment. The data speaks a lot regarding this. On one of the world’s largest democratic country, India, there is only 14.6 percent female representation in the parliament, elected from the recent general election of 2019. Such number was only about 8 percent 25 years back. Female MP in Japan and the US is only 10.2 percent and 23.5 percent respectively. According to data published by the World Economic Forum, only three countries, namely; Rwanda, Cuba, and Bolivia have more than fifty percent female MP in parliament. The figure indicates the rulemaking process is heavily dominated by the male. Another fact shows that in Australia men spend less than three hours in unpaid work whereas females spend more than five hours in unpaid work daily. In US, females spend almost one and a half-hour more in unpaid job daily. The fact indicates females spend more time on such a job which doesn’t pay anything.

In Nepal, among the total dematerialised beneficiary account, which is an essential element for investment in securities is, only 38.7 percent is owned by the female. Only 24 percent such account is owned by the female in India. The dematerialised beneficiary account is an essential component in stock investment, the figure indicates fewer females are participating in investment through the stock exchange. In UK only one percent female of the total population owns a business with employees whereas four percent of male own such business. Similarly, in Australia, three percent female and seven percent male own such a business. The situation indicates that more male own business with employees than female. According to World Bank Global Findex, 2017 only 65 percent women have formal bank account globally, whereas 72 percent of men have such account. Also, women receive approximately only 40 percent of outstanding loan from the financial institution.

According to UN Women in the majority of countries, women’s wages represent between 70 to 90 percent of men’s wages, which is even lower in Asian and Latin American countries, even though one among four ILO conventions of gender equality is about equal remuneration convention. In another data published by UN Women, it says that the global unemployment rate for the female is 6.2 compared to 5.5 of the male, which is projected to remain relatively constant until 2021. Furthermore, almost one-third of women’s employment globally is in agriculture, including forestry and fishing. Despite these gender inequalities and gender wage gap globally, the women migrant are responsible to send half of the remittance, which was about 300 billion US dollar in 2016, indicating that women gives higher input to generate higher value of cash.

The above mentioned fact and figure illustrate the gender inequality in developed and emerging countries around the globe. The inequality in terms of economic decision making may actually be insane. It is because of the actual participation in financial decision making or decision ownership by a female maybe even lower than the fact. So the relevancy of gender inequality in terms of financial opportunity/decision-making is increasing globally. Economic empowerment comes with this decision-making ability. Furthermore, decision-making ability is strengthened with proper knowledge in the relevant field. Regarding financial decision-making, a person should be financially literate or educated to understand the financial/economic problem, analyse the situations, compare the available alternatives, properly evaluate the alternatives and rank them with priority, select the appropriate alternative, and implement the decision. Furthermore, they should also be able to review their decision.

Once the director-general of the United Nations Industrial Development Organisation (UNIDO) Li Yong said in his speech that there exists a multiplier effect on productivity while educating and investing in women and girls education. The women in the society are believed to be the key agent of the changes; this change helps to grow economies faster, reduces poverty and facilitates sustainable growth. Increased educational attainment accounts for about 50 percent of the economic growth in OECD countries over the past 50 years. However, the significant gain in education has not been able to transform into a better labour market for the majority of women. Nobel laureate Amartya Sen in his book ‘The country of first boys’ argues that there is extensive evidence that schooling of young women can substantially enhance the voice and power of women in the family decision. In the developing countries and sometimes also in developed countries, it can be observed that if the women have better education, they will have fewer, healthier and better-educated children, which reduces the financial dependency and increases saving. This kind of financial gender inequality can be addressed by the effective financial inclusion program, specially targeted to the women, by the government and concerned financial regulators.

The OECD-DAC Network on Gender Equality defined women’s economic empowerment as women’s ability to take part in, contribute to, and equal advantages from the process of inclusive growth through which their dignity, respect and equal opportunities are protected. To empower women economically the financial inclusion can be enhanced in various ways. Initially, through incorporated into formal budgetary framework women will have extra resources for them which will increase bartering intensity of them inside their family units and furthermore will have greater capacity to deal with their every day money-related issues. Besides, outside of the family unit, when women are incorporated into money related consideration programs, they will turn out to be increasingly ready to control their benefits. Thirdly, financial inclusion could, by means of insurance, assist them to diversify risk and thus reduce women’s defenselessness. These are on the whole key elements for financial strengthening and they can likewise engage women all the more extensively. The specific interventions identified below reflect the cross-cutting nature and impact of enabling women’s economic empowerment:

       The first one is Financial literacy, which remains the key to beneficial and continuous linkage with the formal financial system. It must be promoted for financial inclusion of the women to be sustainable, with saving, credit, investing and insuring themselves and their families against financial shocks.

       Second, increase women’s ownership on the formal bank account and dematerialized account (an account which is essential for the transaction of securities in countries like Nepal, India, Bangladesh, Sri Lanka etc.). Focus on increasing usage of such account, after opening them.

       Third, promote digital financial service and increase women’s ownership of mobile phones with mobile-banking services that can especially enhance payment through mobile-phone. The deeper concentration of mobile technology, mobile-banking has great prospects of increasing accessibility of financial services to women, particularly in remote areas.

       Fourth, Formulation and implementation of national financial inclusion strategy (NFIS). An NFIS could be an effective means to prioritize goals, balance the development of different financial services required to attain financial inclusion and way forward for enhancing the economic empowerment of women.

       Fifth, Promote the specific role of the micro-finance institution. The micro-finance institution can play a paramount role in the economic empowerment of women since these institutions are specifically designed and work generally in the limited geographical area, they can have a higher understanding of the need of women residing in those areas.

       Sixth, Facilitate the policy that supports investment in SMEs which promote women empowerment.

       Seventh, Specifically design the insurance products, that can address the generous need of women so that they can be protected against the potential risk.

       Eighth, Cultivate women leadership in the market participant, such as ensuring female representation on the Board member of the listed company.

       Ninth, Promote women’s control over assets, resources, income and decision making to mitigate the adverse norms and practices.

 The economic empowerment of women is viewed as one of the important contributing factors in economics which focuses on reducing gender inequalities. Economic empowerment of women embellishes to increase women’s ownership through control of land and assets, and creating good quality and empowering job. It also stimulates to minimise the gender pay gap by making the workplace safe and free from any kind of violence including sexual harassment. Reducing the time spent on a non-paying job to allow more time for education and employment; hence, promoting women entrepreneurship, recognising their economic contribution are other challenges. According to the IMF Blog, the shreds of evidence suggests that increasing women’s access to and use of financial services can have both economic and societal benefit. One among various example is Nepal, where female-headed household spends more on education after opening a saving account.

Finally, like to add the words of Purna Sen, Policy director of UN Women, who once said that ‘the word empowerment, it’s sometimes used as if it’s something we do to help somebody else, but that’s not what it means. It means the opposite.’ In a concluding note, the women’s empowerment is not only about the achievement of sustainable development goal and Millenium development goal but is mostly for the construction of the equitable society. It is also for the respect of women’s dignity, recognise the value of their contribution, make possible to negotiate a fairer distribution of the benefit of the growth and to contribute to the development process. 

Ajaya Dhungana

Published in Sebon 28th Anniversary Publication (Page 261-264)

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