5 ways the new U.S. Development Finance Corporation can embrace women’s economic empowerment

Development initiatives must cut across all groups of society for full impact. According to some estimates, women represent 70 percent of the world’s poor. What can a focus on women’s economic empowerment do for the world? Experts say the female economy represents an emerging market more than twice the size of India and China combined. With better participation, women could add trillions to global GDP. As Katheryn Kaufman of the Overseas Private Investment Corporation put it, “Gender equality is a multi-trillion dollar opportunity that the world can’t afford to miss.”

Yet, supporting women in accessing the formal economy requires removing non-financial barriers that impact them. These include unpaid labor at home, gender-based violence, lack of property rights, unsafe transportation systems, and low healthcare standards. Thankfully, the importance of addressing these obstacles is increasingly recognized by the U.S. Congress, the Trump administration, and the global community.

Congress: Congress has recently sought to address the enabling environment for women’s economic empowerment (WEE) through the passage two major pieces of legislation. The BUILD Act establishes the United States International Development Finance Corporation (DFC), and mandates the new agency guarantee a reduction in gender equality gaps as it invests in developing economies. The WEEE Act further details Congressional recognition that women’s economic empowerment programs must invest in access to credit, vocational training, and leveling the playing field for women.

The Global Community: The global community has identified three major themes dedicated to creating enabling environments for women’s economic participation: social protection systems, access to public services, and sustainable infrastructure for gender equality and the empowerment of women and girls. To tackle these barriers and others, the 63rd Commission on the Status of Women (CSW) recommends the following:

  • Provide benefits for childcare, paid parental leave, and other family benefits that assist women with their unpaid labor
  • Ensure work environments are free of violence, harassment and discrimination
  • Engage with women and girls when designing transportation systems to ensure personal security in public spaces

The Administration:  The Trump administration has shown a commitment to addressing the social and systemic barriers women face when participating in their economies through two specific programs:  the Overseas Private Investment Corporation’s (OPIC) 2X Women’s Initiative and the recently launched Women’s Global Development and Prosperity Initiative (W-GDP). The 2X Initiative has committed to invest $1 billion to enhance economic opportunity for women in the Global South. The W-GDP initiative compliments this investment by establishing a $50 million fund focused on eliminating non-financial barriers to economic engagement.

These actions demonstrate that there is now a powerful consensus to address non-financial barriers to WEE. Unfortunately, there is currently no leading model for the new Development Finance Corporation to follow. Even the World Bank’s International Finance Corporation’s (IFC) commitment to gender has fallen short in practice.

Therefore, the new DFC faces the opportunity and challenge to become a global leader in WEE investing that addresses the enabling environment. It may be difficult to know where to turn for a holistic gender equality model, but those assisting in the transition process can take some steps to ensure that the enabling environment is taken into consideration throughout the entire investment portfolio.

Recommendations for the new DFC

  1. Enable Women through Sector Investments: DFC strategies should address the enabling environment for women as cross-cutting across the portfolio. The enabling environment for women should be considered in investments in power, water, infrastructure, agriculture and health, as well as in programs that focus on financing for women. For example, investments in power and water should aim to reduce time women and girls spend in manual labor, while investments in infrastructure should aim to create safer transportation for women and girls so they can travel to and from work without facing gender-based violence.
  1. Learn from Past Investments: Conducting analyses of past projects that did not reach their desired impacts in terms of WEE would contribute to context-specific knowledge of the social and systemic barriers women face. The information from these analyses will allow the DFC to incorporate positive elements and lessons learned into all of their projects. There are already several projects in the portfolio focused specifically on women, so analyzing obstacles and what could have been improved can improve current projects and prepare for future ones.
  1. Partner with FinDev Canada: Canada’s newly formed development finance institution, FinDev, also has WEE as a strategic objective. The DFC should facilitate an exchange of ideas and information with the Canadians in order to ensure both institutions dedicate policies and procedures towards the creation of an enabling environment. 
  1. Incorporate Civil Society’s Expertise: Consultations with civil society, especially women-centered organizations in the Global South, can help bring expert gender knowledge to the women’s economic empowerment strategy. The Coalition for Women’s Economic Empowerment and Equality (CWEEE) recommends the inclusion gender expertise on the DFC’s “Development Advisory Council”. These consultations will provide valuable program-level knowledge on lowering the gender-based obstacles to WEE.
  1. Collaborate with MCC and USAID: Collaboration with USAID is a must (and is required by the BUILD Act). USAID and MCC already have robust commitments to gender within their own projects and experienced gender experts in the field and in Washington. USAID’s and MCC’s expertise in building the enabling environment will help leverage OPIC’s investments in WEE if the agencies actively co-locate their activities. Essentially, where OPIC’s mandate ends, USAID or MCC can pick up from there to address any outstanding issues.

Investing in women’s economic empowerment, including the enabling environment, benefits women, their families, communities, and the world economy. The list above provides just the first steps the DFC can take to become a global leader in WEE, and fulfilling the goals of Congress and the Administration.

 

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