How can we support women’s economic empowerment through trade?

For years, Krishna Kumari Rai from the Kulung Rai community in Nepal, had to leave her home to secure her family’s livelihood. Forced to travel to Bhutan to work as a laborer in orange orchards and in Nepal’s carpet factories, making a living meant facing undue hardship as well as risks to her safety and well-being without economic security. Yet when she returned home and discovered the commercial viability of a forest product ‘allo’, which her family, had used for food and clothing for generations, an entrepreneur was born. She learned how to weave, began organizing the women in her community into groups and ultimately initiated a Common Facilitation Center. The now-1200+ member strong Center was set up as part of an NGO, SABAH Nepal where Ms. Kumari is a Director, and focuses on increasing trade opportunities for home-based workers. Products made from allo fibers are distinctive due to their indigenous heritage and hold enormous potential for large profit margins (64-106% measured between 2014-2018) in a global natural fibers market otherwise saturated by hemp and jute.

Her story of hardship, however, is not an exception. Poor labour force participation rates for women have been the dominant trend across South Asia. Where women do work, they have been constrained to low-skilled or unskilled labor within the informal sector. A recent World Bank Paper insists that a targeted inclusion of women in the workforce would advance economic growth and trade outcomes by 26 percent of the global GDP by 2025 and holds potential for the region as well. The COVID-19 pandemic has impacted economic growth across South Asia, highlighting the urgent need to foster growth, especially when the indicators for women’s employment, income and wealth which have suffered. However, governmental, local and international initiatives targeting economic empowerment for women have historically failed to leverage international trade and development opportunities as a potential area for expansion.

The South Asia Regional Trade Facilitation Program (SARTFP) is a pioneering trust fund under the World Bank’s Regional Integration, Cooperation and Engagement (RICE) framework that supports economic growth and women’s economic empowerment through trade and connectivity primarily in Bangladesh, Bhutan, Nepal and India. Supported by Department of Foreign Affairs and Trade (DFAT) by the Government of Australia, SARTFP is a unique regional program that brings a strong gender focus to traditionally gender-blind infrastructure sectors such as transport connectivity, trade, employment and entrepreneurship. SARTFP’s support to the World Bank study is significant as it sheds light on the challenges facing women in the production of Allo and Cardamom – two crops with tremendous export potential - and makes recommendations on strengthening value chains. Many, like Ms. Kumari, are benefiting from improved regional trade and connectivity and enabling policies and infrastructure.

The lack of access to formal financing institutions, coupled with lack of collateral for loans, often keep women from entrepreneurship opportunities. Through SARTFP’s financing of micro, small and medium enterprises (MSMEs) that support women, co-operatives like the Kanchenjunga Himalica Agricultural Udyog (KHAU) in Nepal, owned and supported by a majority of women, have expanded trade meaningfully. Unlike allo which was an untapped market, Nepal is the largest exporter of large cardamom in the world, with its trade valued at 37.5 million USD. The cooperative, through a collective initial investment by members, source cardamom from local farmers to produce spice and cardamom-based fibers. Transforming a process wherein women were traditionally limited to physical labor in harvesting cardamom, these higher value-added products of spice and fiber have allowed women to move up the chain and be involved in production and marketing and earn more than a daily-wage.

Recognizing the role of infrastructure in increasing mobility for women in trade chains, the SARTFP has been instrumental in supporting the development of regional transport highways and inland waterways that are accessible for women. This combined with a push to close gender gaps and to develop women-dominated sectors as led by the WePower forum has made significant waves. Bangladesh’s largest power sector player- the Bangladesh Power Development Board has diversified recruitment to raise the number of women employed in the power sector, and has committed to training at least 80 women in STEM fields, mentorship of 20 women professionals in 2020.

In the coming decades, the role played by the digital landscape of markets will be crucial. Digital economies such as e-commerce provide unparalleled opportunities to women entrepreneurs to grow their businesses and enter previously male dominated sectors. This not only helps to eliminate the gender gap in market participation, it can boost also market performance by up to 300 billion dollars by 2030. Data from emerging economies such as Guatemala, Philippines and Indonesia show that women are embracing digital platforms as entrepreneurs to reach audiences far beyond their geographical locations. However to tap into the potential, they need access to business support functions and financial literacy trainings.

Programs that open up opportunities for women, like SARTFP, show what it takes to effectively advance women’s empowerment. Making gender a focus of operations and planning is just the start. Providing information on where enterprises are located along economic corridors, and the policies and investments that can help women benefit from economic opportunities are also critical.