In an April op-ed with the President of the World Bank Group, Jim Yong Kim, Special Advisor to the President Ivanka Trump stated that, “The evidence is overwhelming that supporting women’s economic participation has enormous dividends for families, communities, and whole economies.”
Ms. Trump’s interest in women’s economic empowerment and entrepreneurship has spurred the creation of the Women Entrepreneurs Finance Initiative, or WeFi, a fund housed at the World Bank. WeFi has already secured $325 million, but ultimately hopes to give female entrepreneurs access to more than $1 billion in funding to improve access to capital for women, as well as technical assistance and support for women-led small and medium sized enterprises (SMEs). The initiative includes a $50 million dollar pledge from President Trump at a time when proposals to slash much of the U.S. foreign assistance budget leave many foreign policy professionals uncertain about the future of U.S. leadership in development and humanitarian aid.
Against that background, the House Foreign Affairs Committee (HFAC) held a hearing on July 12 titled, “Beyond Microfinance: Empowering Women in the Developing World.” Although no government witnesses were called to shed light on Administration plans in this area, three expert witnesses testified: president and CEO of Women’s World Banking, Dr. Mary Ellen Iskenderian; Associate Professor Dr. Tanveet Suri of MIT and Ambassador Melanne Verveer of the Georgetown Institute for Women, Peace and Security. The hearing focused mainly on the obstacles that keep women from participating fully in their economies, and the policy and programmatic solutions to mitigate or eliminate those barriers.
Leading the hearing Chairman Royce noted that women’s exclusion from the global economy “harms entire communities, economies, and U.S. interests.” ICRW’s own research shows that economically empowered women advance not only their own financial futures, but those of their communities and nations.
But the question of how to ensure women’s economic empowerment is a complex one, requiring nuanced and multifaceted approaches. During her testimony, Ambassador Verveer asked: “If we invest in women’s entrepreneurship in isolation but cut everything else, what can it achieve?” We couldn’t agree more. ICRW’s seminal paper, Understanding and Measuring Women’s Economic Empowerment: Definition, Framework and Indicators, defines women’s economic empowerment as when a woman “has both the ability to succeed and advance economically and the power to make and act on economic decisions.” It is critical, ICRW found, that women not only have access to economic resources like financing, land and property rights, as well as other critical hard and soft skills needed to compete and succeed, but also the power and agency to act on and fully exploit those assets.
When women are economically secure, they tend to invest in their families and their communities in ways that men do not. Girls who stay in school are more likely to grow into empowered women, better able to attain the necessary skills to enter the workforce. They are also less likely to marry early. Ambassador Verveer noted that the challenge of women’s economic empowerment was not one of rich versus poor countries, but rather of all countries working to close the gaps.
President Trump stated at a recent G20 event on financing women’s entrepreneurship that women in developing country contexts show “tremendous promise for economic growth and prosperity.” Indeed, the United States has existing policies in the forms of the State Department Strategy for Women’s Economic Empowerment, the U.S. Global Strategy to Empower Adolescent Girls and a forthcoming U.S. Agency for International Development strategy on women’s economic empowerment and equality, which, once released, has the potential to do a tremendous amount of good. The strategy, which was due to be released in January, is eagerly anticipated, although a new release date has not yet been announced.
What is needed now is to put our money where our mouths are, so to speak. The real litmus test of the importance the U.S. government places on women’s economic empowerment will, ultimately, come down to how strategic our investments are. Just as business leaders must use the right investment strategies to garner the best return on their investments, the U.S. must leverage our foreign investments to have the greatest impact. A great starting point would be to have a solid and holistic strategy which guides U.S. investments and addresses not only economic empowerment in and of itself, but the social, educational, and physical aspects of empowerment so critical to achieving results. Hopefully USAID’s eagerly awaited strategy, which was due to be released in January and for which a new release date has not yet been announced, can solve this gap in U.S. foreign policy.
For policy frameworks to be meaningful we must not only finance women’s entrepreneurship, but should also fund our own multifaceted policies and interventions in order to dismantle the barriers women face and open markets to their potential. On July 19, the House Appropriations Committee released their FY18 State-Foreign Operations (SFOPS) bill, known as the 302(b) allocation, which reflects a 14 percent cut to foreign assistance broadly, and 50 percent cut to the World Bank specifically.
Other accounts that are critical to the success of women, including global health and humanitarian affairs were cut as well. Were this budget to be enacted as the House passed it, the disproportionately negative impacts on women and girls would be further compounded by the complete lack of funding for UNFPA and the deadly and expanded the Global Gag Rule, or Mexico City Policy. The Global Gag Rule will inhibit women’s agency and control over if, and when, they start a family—and will have deadly consequences for women as it impacts critical health services, such as the ones that help mothers deliver their babies safely, even in times of insecurity.
As we head into the Senate’s own markup session, we can only hope that budget planners will make savvy investments to empower women economically, including and beyond access to finance for entrepreneurs. We-Fi is one important piece of the economic empowerment puzzle but not all women can, or want to, be entrepreneurs. While $50 million committed towards We-fi is a promising first step, it pales in comparison to the proposed cuts to foreign assistance that support the systems that could economically empower women.
We need to develop and implement strategies and programs that address women’s labor force participation in safe and decent work, that allow women to take control over their own health and make decisions regarding their futures and which otherwise provide women with multiple pathways to advance economically—supported by savvy U.S. investments and strategies.