Let her trade | Welcome to CUTS CITEE

Bangkok Post, February 22, 2021

Doing business beyond their borders can be empowering for women entrepreneurs, but they need much more access to knowledge and skills.

Everybody in the world has felt the effects of the pandemic in one way or another. In the world of business, Covid-19 has forced countless entrepreneurs to the sidelines, wreaking havoc on international trade and pushing millions into a sea of uncertainty.

When economic aspects are taken into account alongside cross-cutting issues such as gender, women entrepreneurs in particular have been disproportionately affected.

The pandemic and subsequent control measures such as lockdowns had a “strong” effect on 64% of businesses owned by women, compared with 52% of those owned by men, according to a survey by the International Trade Center.

A survey by UN Women showed similar results: 86% of female entrepreneurs, mostly from Asia, said they had been either negatively or very negatively affected by Covid. Seventy-seven percent said they were selling fewer products and services, and 34% said they might have to close entirely soon.

The reason female entrepreneurs are significantly more vulnerable than other groups is that women-led businesses tend to operate in highly affected industries such as wholesale and retail, accommodation and food services, as well as manufacturing.

Their plight is exacerbated by existing gender inequalities in terms of access to resources, finance, technology and business networks, as well as in broader aspects such as trade policies.

All of this has been magnified by the pandemic, making it harder for women entrepreneurs to thrive both at home and on the international stage.

As a tool for empowerment, international trade can have a positive impact on women’s businesses, says Anoush der Boghossian, head of trade and gender at the World Trade Organization (WTO).

Engaging in international trade can help women diversify their activities, markets, products, customers and opportunities. They will be less reliant on a single domestic market and eventually have a more sustainable business, she told an online panel held recently by CUTS International, a non-governmental organisation based in Jaipur, India.

However, Ms Boghossian believes women entrepreneurs are not only underrepresented but also not integrated into the world of international trade.

Based on data gathered by the WTO from 800 women entrepreneurs in three regions — East Africa, Latin America and South Asia — only 27% are exporting, and only 25% in South Asia.

Women also lack access to information and knowledge about trade rules. “When they answered the questions … some of them didn’t really realise that they were exporting,” she said.

Ms Boghossian said 45% of businesswomen received no clear information on customs requirements and reported difficulty accessing information on international import-export issues such as tariffs.

In the three regions combined, 19% of respondents said they did not trade because they had no idea how to export; the figure jumped to 60% in South Asia. About half reported receiving some training on general trade principles and 35% on trade regulations and customs procedures.

“Despite the current level of knowledge on trade rules which is not very high, 55% of women entrepreneurs intend to export in the future,” noted Ms Boghossian, adding that altogether, 90% expressed interest in taking trade-related training.

The eagerness to participate is there, she said, as well as the room for action.

KEY BARRIERS

Women entrepreneurs are often unable to reach their fullest potential because of limitations rooted in social norms and customary practices, says a report by the Asian Development Bank (ADB) and the Asia Foundation.

One is a lack of knowledge and skills to start, manage and grow a business. “If trade is used as economic empowerment, knowledge is fundamental,” said Ms Boghossian.

Critical skills related to negotiation and bargaining, marketing, management and production as well as an understanding of economies of scale, accounting and essential information on financial institutions are often poorly developed among women.

Also lacking in some cases are computer literacy, financial literacy, understanding of business models and trade rules. Financial literacy rates are lower among women than among men in all Southeast Asian countries, particularly in Laos, Myanmar and Vietnam, the report suggests.

When it comes to exporting, additional skills and understanding are needed given the complexities of border procedures, legal trade jargon and the “maze of various tariff and non-tariff barriers” applied by countries, said Ms Boghossian. That’s why training is important to help women entrepreneurs become more independent.

“Knowledge will also help women dispose of the middleman,” she said, adding pointedly: “I’m not talking about the middle person — I’m talking about middle-men mostly.”

For cross-border traders, she said, “knowledge is also power”, since some customs officials could take advantage of their lack of knowledge of trade rules, and maybe add extra fees to a transaction.

Businesswomen also have limited access to markets. The market a woman seeks to access will depend on her education, family situation and the state of the economy.

When they decide to export, “they have to construct an export plan. They have to choose their sales presence. They have to promote the products. They have to get paid on time. They have to choose the distribution methods, and so on,” said Ms Boghossian.

“It’s just the whole package that women entrepreneurs need to integrate if they want to have access to international trade and to the opportunities created by trade.”

ACCESS TO FINANCE

Another common limitation is access to finance. “Women are found lacking access to finance because they don’t have assets, they don’t have collateral,” said Mia Mikic, permanent adviser to the Asia-Pacific Research and Training Network on Trade.

Most financial institutions in the region require traditional forms of collateral such as land, houses or cash when assessing a client’s creditworthiness.

“More than 80% of the world’s surface is owned by men,” said Ms Mikic, citing data from the Gender and Land Rights Database of the Food and Agriculture Organization (FAO).

“Men own 80% of what can be used as collateral in traditional banking, and that’s why a woman cannot rely on traditional banking to get loans and financing.”

The report also mentioned that the availability of seed funding for startups is limited.

Discriminatory laws and regulations are another barrier. Globally, 2.7 billion women are legally restricted from having the same choice of jobs as men, according to research by the Women, Business and the Law project at the World Bank Group.

Equal rights may exist on paper, but social norms often perpetuate discrimination that prevents women from claiming their lawful rights. In China and Southeast Asian countries, women own little more than 10% of agricultural land, reflecting cultural norms that favour men.

Lacking access to business networks, women have fewer opportunities to learn from others, develop useful business contacts and gain market information.

Southeast Asian women entrepreneurs report around 7% less access than men to business-oriented networks. As well, many mixed-gender networks don’t offer services and programmes tailored to women’s needs.

Discrimination by male customers and potential business partners who prefer to engage more with men is also a factor. Sexual harassment can also curtail the ambitions of women, who fear for their physical safety.

The last barrier keeping women from fulfilling their entrepreneurial potential is unpaid non-market work.

“Women are still actually predominantly responsible for taking care of the household, education of children, and taking care of the elderly,” said Ms Mikic.

Globally, women account for 76.2% of all hours of unpaid care work, more than three times as much as men. The figure in Asia and the Pacific is 80%, data from the International Labour Organization (ILO) shows.

BREAKING DOWN BARRIERS

Despite the roadblocks impeding women, the opportunities have also increased.

“The changing global economy is now offering new opportunities for women through services, through global value chains and digital technology,” said Jahnabi Phookan, national president of FLO, the women’s wing of the Federation of Indian Chambers of Commerce and Industry (FICCI) and director of the Assam-based travel company JTI Group.

Global value chains and digital platforms in particular are having a positive impact on all aspects of women’s livelihood, she said. “They all create opportunities for women, bypassing traditional trade barriers, expanding entrepreneurial skills, and developing flexible careers that enable them to manage both work and household responsibilities.”

“The massive scale-up of access to digital areas, digital platforms for trade … for enterprise development, for skills training, for information, is exponential,” added panelist Nandita Baruah, country representative for India to the Asia Foundation.

E-customs procedures that smooth trade facilitation have been beneficial for women entrepreneurs because they save time.

Ms Phookan believes e-commerce will help bridge the entrepreneurial gap. “The opportunities are now lying in the online space,” she said.

If female and male entrepreneurs participated equally, global gross domestic product could rise by 3% to 6%, boosting the global economy by US$2.5 trillion to $5 trillion, according to data from the Boston Consulting Group (BCG).

Last year, FLO signed a memorandum of understanding with the National Skills Development Corporation (NSDC) to empower Indian women through training and to promote entrepreneurship.

Through eSkill India and other digital initiatives, women have access to free learning resources, including digital skills training and trade opportunity knowledge, along with the life skills to thrive in the digital economy.

E-commerce has been a boon for women, with millions of “home-preneurs” in urban and semi-urban India. Not only does it mitigate gender-based barriers, but it also enables women to have “flexi home time”. Being able to directly contact customers without relying on middlemen is a major benefit, said Ms Phookan.

Work is also under way to lift financial barriers, Ms Mikic said. The UN Economic and Social Commission for Asia and the Pacific (Escap) has been working on access to financing including digital payment with major players such as Visa and Mastercard. The goal is to help collect data on business transactions that women can use as a digital asset to prove their creditworthiness.

The WTO, meanwhile, plans to launch a capacity-building programme this year, said Ms Boghossian.

Tailored to women entrepreneurs’ needs and regionally anchored, the “train the trainer” programme will both support the dissemination of knowledge, create mentorship and build networking platforms.