Empowering women, powering trade: The importance of women in the export value chain

It has become increasingly clear that in order to achieve quality growth from the potential that trade provides, policymakers and business must take an inclusive approach to realize the full potential of economic resources.

Encouraging and supporting women’s contributions to trade can further propel a country’s economic growth and transform local communities.

Strategic decisions taken by governments and corporations are critical to this process. By empowering women to advocate for themselves, with governments setting national strategies that take into account a gender dimension, and with the commitment of business, women can begin to achieve their potential in international trade.

Export development and human potential

To support this, international organizations are focusing more attention on the mainstreaming of gender in development projects.  For instance, the recent World Trade Organization (WTO) Third Global Review of Aid for Trade for the first time highlighted women’s contributions to trade.

The Government of Uganda has identified the coffee sector as one where women are active and one which has export potential. With the help of the International Trade Centre (ITC)  Uganda is working to move women up the coffee value chain and increase their economic potential.

In the coffee sector in Africa women do 70% of the fieldwork and harvesting, but are only engaged in 10% of the in-country and international trade of the product. ITC is partnering with the International Women’s Coffee Alliance (IWCA), to empower women to take more control of production and profits.

IWCA is a global network of women in the coffee industry that advocates for the reduction of barriers for women in coffee producing countries. As a global network they encourage knowledge- transfer from the countries in which women are more active.

To make the most of their contributions and benefits, the women coffee growers, like producers of any product, need to understand how markets affect the supply chain.  To meet international standards, quality control is a critical issue during the growing, harvesting, storing and processing of goods.

IWCA chapters help members across the coffee value chain understand how to access information on standards, market prices and to develop negotiation skills.

Overcoming gender-based constraints to trade

It is often more difficult for women to achieve the level of knowledge required to be successful in business because of social and regulatory limits to becoming business owners.  Women are often marginalized by discriminatory legal and cultural practices, and their contributions go unrecognized.

Increased participation in decision-making is critical to women’s empowerment. With access to opportunities and needed resources, they can live up to their potential as economic players able to respond to market signals.

Groups such as the IWCA are important in empowering women to become advocates, raising their profile as business owners, and making their voices heard.  Today women’s points of view are seldom heard or valued.

Women’s engagement with trade support institutions and Chambers of Commerce and in dialogue with government will ensure that the development of national policies is inclusive of issues that impact women.

Countries must incorporate a gender dimension into their national export policies in order for women and their families to reap the benefits of participating in the global economy and for the countries to achieve their full growth potential.

According to the Swedish International Development Cooperation Agency (Sida), in a background paper for the OECD, empirical evidence shows that gender-based inequalities limit both economic growth and poverty reduction.

The paper points out that countries, which improve the status of women, have lower levels of poverty and stronger economic growth.  It concludes that gender equality in control over resources contributes to more efficient markets, enhancing productivity and growth rates.

The United Nations Inter-Agency Network on Women and Gender Equality in its 2011 resource paper on Gender Equality and Trade Policy suggests a number of ways governments can mainstream gender issues in international trade.

They include trade liberalization agreements, unilateral liberalization such as unilateral reduction of tariffs on intermediate inputs in productive sectors with high female employment, and tax incentives to encourage exports from women-owned enterprises.

International organizations can help, as the resource paper points to the engagement of development assistance frameworks such as Aid for Trade and the Enhanced Integrated Framework (EIF), under which ITC works with countries in their development of project strategies that create new jobs and income opportunities in trade.

Good business sense

Women-owned businesses are a growing phenomenon.  The United Nations Development Fund for Women (UNIFEM, now part of UN Women) reported that in 2010, more than 38% of registered small and medium enterprises in Uganda, 60% in Rwanda, and 68% in Lao PDR are women-owned. According to the World Food Programme, 90% of women’s earnings go to their families, while for men this figure is only 30-40%.

Multi-national corporations are also discovering that integrating women into their value chains makes good business sense.  The diversification of the supply base brings new skills, innovation and increases competition.

Approximately 95% of Fortune 500 companies now have supplier diversity programmes under which they actively seek to source from women.  When sourcing becomes international, this presents an enormous opportunity for women entrepreneurs, including in developing countries, to sell into global supply chains.

To take advantage of this, the Global Platform for Action on Sourcing from Women was created by ITC. It is an initiative which aims to increase women vendors’ share of corporate, government and institutional procurement.

It is led by ITC with the support of WEConnect International and a global network of leading organizations and individuals committed to women’s economic empowerment.  More than 50 multinational corporations are part of the Global Platform, spending over USD700 billion annually on sourcing.

The share currently going to women business owners is estimated to be less than 1%.  The Platform aims to change that through matching buyers with women-owned businesses that until now have not had the opportunity to make contact with these corporations.

The multi-national corporations themselves also do better when they have more women at senior levels.  A March 2011 study by Catalyst, a United States-based NGO, found that companies with the highest percentages of female board directors outperformed their competition by at least 53% for return on equity, by 42% on average for return on sales, and by 66% for return on invested capital.  It is clear that women bring a different dimension to business operations.

Public and private sectors partnership necessary

Women are gaining ground, but the goal of realizing the full potential of all citizens of a country cannot be achieved by international and non-governmental organizations.

This can only be achieved through partnerships with businesses committed to taking action to empower women economically and through governments willing to shape policies, which give women equal access to the resources necessary to participate fully in international trade.

Public-private-partnerships are a critical mechanism to achieve these commitments as only with these commitments will we see women’s full contribution to exports, and to the benefits which will flow to their families, their communities and to the economic development of their countries.