How can women’s participation in international trade best be supported
Swedish International Development Agency
20 November 2014 - Stockholm, Sweden
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Ladies and gentleman,
I would like to thank the Swedish International Development Agency for the opportunity to contribute to this discussion on inclusive development for women through international trade.
Over the past fifty years – which is how long the ITC has been in operation – trade has evolved considerably. Where the typical exchange once featured a good manufactured from start to finish within a single country, we now see complex, multi-country production chains in which a product crosses several borders before it is ready for final sale.
Trade and investment are closely intertwined across these chains, and the value of goods leans heavily on the services required to make them. The information technology revolution has made new classes of services tradable: a design firm here in Stockholm can have its product renderings done in an office park in Kigali, and use alibaba.com to find a manufacturer in a third country.
Since international trade is evolving, so too must the support we provide to women and men business owners trying to access international markets, or already operating in them. Our work therefore includes a strong focus on SME competitiveness and the competitiveness of women-owned businesses in particular. Why? The first reason is that SMEs provide over two-thirds of all formal jobs in many developing countries.
The second reason is that the economic success of women-owned businesses yields higher social dividends: research shows that women reinvest up to 90% of their earnings in their family, mainly in health and children’s education, compared to 40% by men. Investing in women-owned SMEs yields high returns in terms of new jobs and sustainable development.
This issue of SME competitiveness has many angles, from optimizing internal business processes, to access to finance and technology, to macro business regulatory issues – all of them important in their own right.
At ITC we have started to group those angles within three categories: efficiency, connectivity and capacity to change. SMEs need to be efficient, connected and able to change in order to survive participation in international markets. Governments have an important role to play in creating an environment that is supportive for efficiency, connectivity and change.
In response to these competitiveness issues, from day one, ITC has been making cutting-edge market intelligence available free of cost in developing countries. Today, we help sellers connect to buyers, both online and in person. Governments seek our assistance for their efforts to strengthen trade support institutions like export promotion agencies.
We work with policymakers to help craft reform agendas for improving the business environment, and develop national strategies for export-led growth. All of this is directly relevant to traders in any of the developing countries that we serve – including, of course, women exporters, and would-be exporters.
Today, however, we are not here to talk about traders as such. We are here to debate what kinds of support are particularly relevant to exporting women business owners in Africa, the Middle East, the Pacific, and elsewhere. Since women typically experience differential access to the resources and opportunities necessary to trade – meetings like ours today can lead to game-changing ideas, decisions and results to improve the experience of women in international trade.
There is no quick or easy fix for supporting women’s participation in international trade. There is a role for everyone and much to do. Needs and situation analyses are important for mapping baselines and scoping the challenges and opportunities. They are also necessary if we want to measure progress. Gaining access to critical assets including to land and to capital are also critical. In the next few minutes, I will elaborate on additional areas of support and also what the ITC is doing with respect to each.
To succeed, women in international trade need to be equipped, tooled and empowered.
Buyers’ demands should drive this. At ITC, we start by understanding the market opportunity and identifying the buyers. Many of the elements that need to be included in a programme of technical assistance vary from market to market and buyer to buyer.
We work across the selected value chains, with public and private sector support institutions, providing technical assistance to improve the managerial, trade and product skills that matter so much to a firm’s competitiveness, and then link businesswomen to identified markets.
One of our newer initiatives, for example, seeks to bolster the competitiveness and trade success of women-owned SMEs in the State of Palestine. Building on the proven track record of our Ethical Fashion Initiative, which connects artisans from poor communities to the top-end of the international fashion industry, we are working with Palestinian women skilled in traditional handicrafts such as embroidery (cross-stitch, couching-stitch, etc.), patchwork, weaving, and carving.
In order to do better, more sustainable international business, women need supplier development training and mentoring.
It is also important to ensure that women are well- prepared through education and training to respond to the rapidly changing landscape, because industrialization and the reorientation of export industries towards higher value-added activities, which require higher-skilled and mobile labour, could result in women being left behind in low-skilled and low-paid jobs. That would be a moral, social, and economic tragedy.
Women vendors need to gain more long-term access to buyers from both the private and the public sector.
We need to embed women traders into markets.
The ITC Global Platform for Action on Sourcing from Women Vendors is a global network of companies, governments, institutions and individuals with the shared objective of precisely doing this.
With the backing of a group of donors, including Sweden, the ITC Global Platform for Action on Sourcing from Women Vendors has yielded over USD25m in contracts and letters of intent to transact business. We bring together over 800 buyers and over 50,000 women entrepreneurs through our partnerships plus 100 national trade support institutions.
ITC also works with partners such as the United Nations Global Compact whose network of over 800 company signatories to the Women’s Empowerment Principles have committed to “Implement enterprise development, supply chain and marketing practices that empower women” including increasing the participation of women in their value chains.
We assist these companies to operationalise their commitments by facilitating linkages to business women in developing countries and providing capacity building to help these business women understand and meet buyer requirements.
Now for public sector procurement.
The government is the largest spender in a given economy, government holds the immense power to stimulate entrepreneurial activity. In 2010, total global GDP was US$63Trillion, of which US$11Trillion was spent by governments on sourcing goods and services.
This represents huge untapped potential as women entrepreneurs access only an estimated 1% of these contracts. This is why in September we launched the “empowering women through public procurement” initiative to encourage governments to actively channel procurement spending to women entrepreneurs.
Targeting assistance to women cross-border traders, both formal and informal, is also very important.
It has been suggested that the informal economy is Africa’s “real” economy, through which real economic integration occurs. 70% of informal cross border traders in intra-SADC trade are women, while in 2009 for example, Uganda’s informal exports amounted to approximately US $1.6 billion, representing about half of the country’s export earnings.
Research shows that informal cross-border trading activities have helped cushion the effects of the financial crisis and high food prices on African countries.
Recognising the importance of informal cross-border trade, we are working in East Africa to ensure that over 700 women informal cross-border traders, who in a real sense are micro-SME operators, receive the help they need to comply with trade facilitation formalities. ITC provides capacity building and tools for women to participate in export trade; and facilitates the development of strategic alliances – by encouraging the formation of women’s networks, associations of informal traders at border areas, and establishing alliances with chambers of commerce and industry, as well as regional economic communities like EAC and COMESA.
ITC also supports the simplification of border procedures and processes to quicken the clearance of goods, and welcomes signs that the implementation of the WTO Trade Facilitation Agreement will go forward as planned.
Despite limited resources, we have worked with over 30 countries to train government officials and the private sector on understanding the agreement, with a particular focus on helping policymakers understand what SMEs, including women-owned SMEs, need to facilitate trade.
We should also support women traders’ efforts at organizing themselves into productive groups.
Organised women in associations provide an avenue through which trade related assistance can be channelled, provide an interface for dialogue and contractual arrangements with buyers and provide a platform to advocate with policy makers for the needs of members.
In the coffee sector, ITC is working with the International Women’s Coffee Alliance to establish associations of women in coffee in Burundi, DRC, Ethiopia, Rwanda, Tanzania and Uganda. Across chapters, members include exporters, technical specialists and farmers.
Once organized, ITC links chapters to practical training on how to increase quality and productivity, for farmers this means improving not only coffee but also other sources of income on the farm. Training may come from ITC or through programmes already on the ground-for instance government extension – which often fails to include women. As leaders emerge in these groups, we work with IWCA to provide leadership training and trainer of trainers opportunities.
The progress of these women from our original work with IWCA chapters in Africa in 2009 to today is remarkable. These women are confident, persuasive and they know how to exchange with buyers as evidenced by their successful conclusion of sales at meetings such as the Specialty Coffees Association of America annual meeting in Seattle earlier this year.
Finally, continue to advocate for enhancing women’s participation in international trade and invest in learning about how to support it.
Targeted, systematic staff training effort across development organisations is required to ensure women as well men benefit from growth and development strategies. At ITC, we have trained more than 60% of our staff on gender mainstreaming – training is critical to enhance understanding of why and how to improve – and as a result we have almost doubled our delivery to women.
Once the understanding is there, advocacy has an important role to play. This is particularly relevant at the national level when national export policies and strategies are being prepared. And also at global level, as the world is moving towards a new international development framework for the next 15 years.
Ladies and gentlemen, in a nutshell, the best way for us to support women’s participation in international trade is to invest in doing just that. We need to invest in understanding the stakes, and we need to invest in tooling and equipping the women entrepreneurs as well as the policymakers and institutions that support them. Moreover, we need to keep track of it all to see where we are on target and where we need to boost our investment.