To Strengthen Economies, Let Women Work- by Megan McArdle
“People at first thought we were trying to go to the moon with a glider,” said Muhtar Kent, the Chairman and CEO of the Coca-Cola Company.
Kent was describing the company’s extraordinarily ambitious “5by20” program, which aims to create five million new female entrepreneurs by 2020. They may be shooting the moon, but the company says it has already helped 350,000 women to start their own businesses.
Most development experts agree that empowering women is not only a key to greater female equality, but also promotes economic growth. Güler Sabanci, Chairman and Managing Director of Turkey’s Sabanci Holding, pointed out that “only 50 percent of Turkey’s population is in the workforce: 70 percent of men, and 30 percent of women. Male labor force participation can’t go much above 75 percent, so we need the women to move into the workforce to keep growing.”
Getting women into the workforce especially promotes the growth of what economists call “human capital”: the improvements in health and education that make for more productive and prosperous lives. Helping a female entrepreneur to get a foothold in the developing world can mean changing an entire family tree. Money that goes into a woman’s pockets is more likely to be spent on the family, especially on daughters.
“If investing in women is smart economics, moving upstream, investing in girls must be even smarter economics,” said Dr. Ngozi Okonjo-Iweala, the Nigerian Minister of Finance.
“If investing in women is smart economics, moving upstream, investing in girls must be even smarter economics.”
But those investments can be hard to come by. The Women, Money and Power panel, which was sponsored by Coca-Cola, spent a lot of time talking about the difficulty that female entrepreneurs in the developing world can have in accessing credit. Microcredit has made great strides in helping women access small sums, but that money quite often gets used as an expensive form of savings, tapped to provide basic necessities for the family. There’s a great “missing middle” between tiny microcredit loans and the bank credit which still disproportionately gets used by men.
“After access to electricity, access to finance was next on the list” of problems facing entrepreneurs in developing countries, Dr. Okonjo-Iweala told the audience. “And for women it is even more difficult.”
Muhtar Kent stressed that encouraging female economic empowerment isn’t just a question of social justice, but also good business. “It can’t just be charity,” he said. “It has to offer a benefit. These are woman retailers, woman distributors of our products.”
“Each time you create a woman entrepreneur,” he said, “a community gets stronger.”
It pays, said US Ambassador Melanne Verveer, “a triple dividend.”