January 11, 2018

Poverty is Sexist.

By Sean Hansen

In El Salvador, Lula Mena’s hand-made jewelry business is thriving. Thanks to critical business training and export assistance from the U.S. Agency for International Development (USAID), Lula now exports her goods to eight countries. But the impact of Lula’s success extends far beyond her own family. By training and employing local women, Lula has created 120 new jobs –simultaneously empowering women and driving economic development in a country where one-third of the population lives in poverty.

Prioritizing Empowerment

Lula’s story was one of many highlighted during the Global Entrepreneurship Summit hosted by the U.S. State Department in India last November. Recognizing that women are key drivers of economic growth in developing countries, the United States has prioritized programs in recent years that support female entrepreneurs like Lula. Speaking at the summit, USAID Administrator Mark Green made the case for targeted investments that help empower women around the world, explaining that “Gender should never be a barrier to success, and I think we recognize that all too often, it remains so.” A vocal supporter of entrepreneurs like Lula, Ivanka Trump echoed the Administrator’s comments in her own remarks at the Summit, stating that “Only when women are empowered to thrive, will our families, our economies, and our societies reach their fullest potential.”

The Case for Investing in Women and Girls

These remarks are spot on – investments in women and girls have been shown to unleash growth, advance development, and promote gender equality. The statistics speak for themselves:

  • Economic Impact: Eliminating the gender pay gap around the world could grow the global economy by as much as $28 trillion—or 26%—by 2025. And if developing countries close the financing gap for female entrepreneurs (estimated to be $285 billion), their national per capita income would increase 12% by 2030.
  • Investing in Education. For every dollar invested in an additional year of schooling for girls, it’s been demonstrated that low-income countries get a tenfold return on investment over long-term earnings and health benefits. Although women make up half of the global population, they make up more than two-thirds of the world’s 800 million illiterate people. With 130 million girls between the ages of 6 and 17 out of school today – educating girls at the same level as boys could boost GDP in developing nations by as much as $152 billion per year.
  • Reducing Infant Mortality. Educating women can even improve the health of their children. For every additional year of education for women of child-bearing age, child mortality declines by 9.5%.
  • Peace and Security. Including women in conflict resolution and peace processes has also been shown to reduce the likelihood of a return to violence. A study by the International Peace Institute, which reviewed peace deals from 1989 to 2011, found that when women were included in the process there was a 35% greater chance that the agreement would endure more than 15 years.

Poverty Affects Women Disproportionately

Despite the transformational effect that women can have on their families and communities, closing the global gender gap and empowering women remains a steep challenge. On average, women spend twice as much time as men performing essential daily tasks like cooking, cleaning, and nurturing children – which all too often denies them the opportunity to pursue an education, start a business, or learn new skills that can catalyze economic growth. It’s an unfortunate reality that has led philanthropists from Bill and Melinda Gates to Bono to remark that ‘poverty is sexist.’ As Bill Gates pointed out, “The poorer the society, the less power women have…the male dominance in the poorest societies is mind-blowing.” The good news is that USAID and the State Department are working to tackle each of these challenges.

Results: A Return on Investment

Around the world, the United States is helping to boost female entrepreneurship. Between 2014 and 2016, women-owned firms increased by 10%. With the support and financial commitment of the U.S. government, the World Bank recently founded the Women Entrepreneurs Finance Initiative to provide aspiring businesswomen in developing countries the capital, mentorship, and assistance they need to compete in today’s global marketplace. This new initiative builds off of the State Department’s Women’s Entrepreneurship Fund, which has already helped over 1.5 million female entrepreneurs start their own companies and create jobs in their communities. As Ivanka Trump pointed out, this is good news not only for women around the world but also here at home: “Fueling the growth of women-led businesses isn’t simply good for our society – it’s good for our economy.” 

How Congress Can Close the Gender Gap

America’s investments in development and diplomacy programs have helped provide women like Lula with the tools, skills, and resources they need to reach their full potential. But despite the progress that’s been made, there remains much to do if we are to close the gender gap and foster inclusive economic growth and development. As Congress looks to finalize its spending bills for 2018, it should continue to prioritize investments in women’s empowerment, as the White House’s National Security Strategy laid out when it specifically mentioned a commitment “to advance women’s equality, protect the rights of women and girls, and promote women and youth empowerment programs.” Now is the time to double down and invest in the next generation of women and girls – to close the gender gap and build a safer, more prosperous world for all.

Lula’s story originally appeared here.
image photo credit: Dave Cooper for USAID