Statement at the European Parliament Committee on Women's Rights and Gender Equality

Speech by Ms. Arancha González, Executive Director, International Trade Centre

Delivered on 20 March 2014 at the European Parliament Committee on Women's Rights and Gender Equality in Brussels, Belgium

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It is a pleasure as executive Director of the International Trade Centre (ITC) to be at the FEMM Committee of the European Parliament to discuss the role of women’s economic empowerment in development. The ITC is a UN-WTO development organisation focused on helping developing country SMEs internationalise. A big part of our focus is on women-owned SMEs.

This Committee is seriously engaged in advancing women’s rights and gender equality. The ITC is seriously engaged in women economic empowerment through skills building, entrepreneurship, job creation and business contacts. I see us as natural allies in promoting policies and actions providing women with economic opportunities.

Our investment in women-owned businesses is not ideological. It simply makes economic sense. In developing countries women-owned companies represent 40% of all SMEs and we know that women re-invest close to 90% of their earnings in their families and societies compared to 40% by men. When you also see that SMEs are providing two-thirds of all formal jobs in developing countries in Africa, Asia and Latin America, and 80 per cent in low income countries, mainly in Sub-Saharan Africa, you can begin to see just how valuable women-led economic endeavour really is.

More and more global economic and development players are being drawn in by the business case of working with women-owned businesses. Today, nearly 700 CEOs from around the world have signed up in support of gender equality and the guidance provided by the UN Women Empowerment Principles.

Today, I would like to look more closely at a principle which speaks to the heart of ITC’s development and growth agenda – women’s economic empowerment. UN Women Empowerment Principle number seven calls for partnerships that “implement enterprise development, supply chain and marketing practices that empower women”.

To make this and similar types of principles have the intended impact on business and development, global players - including parliamentarians like yourself - would be well placed to support operational practices and policies which invest in and empower women.

To ensure women economic empowerment is a reality on the ground we, at the ITC, have built a “Women and Trade” Programme.

Let me tell you a story which illustrates what this programme is about. The story provides valuable lessons for what we can do together to improve women entrepreneurship. The story is about women in coffee.

In many coffee-growing countries women as coffee producers are atomised growers: typically in remote rural areas, poorly serviced, if at all, by agricultural extension workers, with little or no connection to sectoral and other networks providing access to knowledge of good agricultural practices, pricing or savings and loans facilities.

Our interventions started by identifying the constraints to devise specific interventions to address the barriers facing these women. But we knew that any solution would not be durable unless we sought partners with whom we could work to offer sustainable solutions, even after our projects concluded.

We chose to work with the International Women’s Coffee Alliance, whose mission is to ‘Empower women in the international coffee community to achieve meaningful and sustainable lives’. This resonates with the aim of ITC’s Women and Trade Programme, which is to ensure ‘women entrepreneurs and women in export-oriented value chains, derive greater economic benefit from their participation in trade.’ So in 2010 we embarked on a project to form associations of women in coffee, in Uganda, Burundi, Kenya, Rwanda and Tanzania, recognising the similarity of issues faced by women in coffee throughout East Africa.

Three years later, and these women have been successful not only in sharing information with members on good agricultural practices, pricing and so forth, but, through the ITC-lead “Global Platform for Action on Sourcing from Women Vendors”, a business-to-business matching mechanism, women from these chapters have met with buyers and reached global markets. On example of this is the recent case of a number of women from Burundi securing a contract for USD1million for their coffee products.

Let me now share with you some of the lessons which we have learnt from this and many other experiences:

Lesson one is that efforts must be made to systematically include women in consultations that aim to increase economic and human development; that women must be part of crafting and implementing the solutions to problems identified. In many countries where ITC is active, this is not always the case. The risk is that national development plans and sector strategies can be designed that perpetuate the status quo.

One example of a tool ITC offers to governments to identify and unlock women’s export potential, is the gender-sensitive national export strategy methodology. It starts with the identification of sectors in which women are economically active. Shortlists top sectors with export potential and then drills down to examine sectorial and cross-sectorial constraints to women’s export success.

Lesson two is that women-owned SMEs suffer greater difficulties in access to finance and savings facilities than men. Access to finance is an area that still requires work in terms of addressing meso-level financing – greater than micro finance, yet perhaps not as large as the minimum some commercial banks are seeking to lend (governed, usually, by the need to cover administrative costs). Whilst solutions need to be found to assist women access commercial lines of credit, at the same time, women’s access to savings facilities is increasingly important, as this is successful in putting money in the hands of women. The degree to which women can spend money on their families and communities depends on the control they have over financial resources. If the money is taken by men, as is common in many regions where we work, the social dividends of women economic activities are largely curtailed.

Here we see clearly the need not only to ensure women’s economic success, but we need to better think through and find solutions that help women retain control over financial resources – especially those that they themselves work so hard to secure.

Lesson number three we must help build the productive capacities of women entrepreneurs and take it one step further to actively increase sourcing from women vendors, including through government procurement.

In 2010, sourcing of goods and services by governments reached $11Trillion but women entrepreneurs access only an estimated 1% of these contracts. We can and in my view surely must do better. Why not think of setting aside a part of government procurement for women-owned SMEs? This is certainly an area where you Parliamentarians can make a real difference.

Lesson number four, it is crucial that we track spending on women’s economic empowerment – as they say: “what gets measured, gets done”. We need robust accountability systems in place to track support to women’s economic empowerment.

Through tracking we know that gender-equality focused aid is concentrated in the social sectors of education and health, with alarmingly low levels of aid targeted towards economic sectors. Only 2% of aid to the economic and productive sectors target gender equality as its principle objective. The FEMM Committee at the European Parliament, working with the trade and development commissions can ensure that Europe does better in directing a greater part of its Aid for Trade is devoted to women economic empowerment.

In the post 2015 development agenda we have a golden opportunity to put our money where our mouth is; to give a prominent place to the “women double e” - economic empowerment – and through that to contribute to eliminating poverty.

I count on the European Parliament – men and women - to help us advance these issues.

Thank you.