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Speeches & Transcripts September 28, 2017

Remarks by Victoria Kwakwa, Vice President East Asia and Pacific Region, The World Bank at 2017 APEC Forum on Women and Economic Policies

Excellencies, Ladies and Gentlemen,   

I am honored to be speaking today about such an important subject, and to such an inspiring audience which has already accomplished so much to include women and girls in economic development.

Women’s economic empowerment is an ethical matter, but it is also a critical economic matter. No organization, or economy can reach its full potential and meet the challenges of the 21st century without the full and equal participation of both women and men.

At the World Bank, empowering women is central to our efforts to accelerate economic development. We see the advancement of women as critical to achieving our goals of ending extreme poverty and boosting shared prosperity. I believe we have the opportunity to unlock a new source of economic growth.

Every day, we work with governments and private sector partners to empower women, improve their access to jobs, and promote entrepreneurship. Today, I’d like to talk about some of the lessons we’ve learned, particularly in East Asia and the Pacific, but which apply to other parts of the world as well. Our experience has given us a good sense of what it takes for us – here at this Forum, and for leaders around the world – to close the gap between boys and girls, women and men. We know that this is possible, but it takes the right policies, the right investments, and the right incentives. 

An unprecedented number of women are entering the world of business and entrepreneurship. In APEC economies, the share of companies with female participation in ownership ranges from 22 and 25% in Indonesia and Mexico, to 51 and 46% in Vietnam and Papua New Guinea, and 64 and 69% in China and the Philippines. What this data tells us is that an income level does not correlate with the share of women running or owning enterprises.

So what prevents women from developing their businesses or achieving full economic inclusion? There are many reasons. Today, I will focus on today on lack of access to finance, restrictive policies and social norms across economies.

To be able to grow or even start a business, both men and women need access to financial resources. We estimate that female-owned companies represent just over 30% of formal, registered businesses worldwide. In developing economies, 70% of women-owned SMEs are either excluded from financial institutions or are unable to get financial services that suit their needs. In actual numbers this translates to female-owned enterprises being denied access to $300 billion each year. In East Asia alone the gap is estimated at $67 billion per year for women-owned SMEs.

The fact that many financial institutions in emerging markets have yet to develop sustainable strategies to address this significant financing gap is a missed opportunity that constrains private sector development.

With joint efforts by governments, the private sector, and institutions like the World Bank Group – we can close this gap. At the World Bank we have committed 1.4 billion dollars to women-owned small and medium enterprises in 25 countries in Africa, East Asia, Eastern Europe, and Latin America through a program called Banking on Women.

Female-owned enterprises have special challenges. We have found that programs trying to help women entrepreneurs best serve them when they are tailored to these specific needs. For example, our research has found that combining women’s access to capital with business training is more successful at increasing their profits in the long run.

Another example is regarding collateral. Formal financial institutions often use land and property as forms of collateral. This puts women at a disadvantage because they tend to own other types of assets which are not easily accepted as collateral. As an alternative, credit agencies in East Asia – from Malaysia to South Korea, China, the Philippines and Vietnam – collect loan repayment information from retail stores, utility companies or from microfinance institutions. This allows women to build credit and graduate to larger loans.

Let me give you an example from China where we are partnering with Ant Financial in support of an internet-based gender finance program. Many of Ant Credit’s clients are women who run businesses on Alibaba’s online marketplace. This program uses technology to evaluate potential borrowers’ creditworthiness. Instead of taking securities and assets – such as buildings or inventories – as guarantees for loans, Ant Credit looks at their transactional and behavioral data as they do business online.

We feel this new technology [based on social capital and commercial acumen] provides a great example for how to provide access to capital and markets for the poorest people in the poorest economies all over the world. Innovative approaches such as this one illustrate that we can help women access the resources they need to get a fair chance in life – to take charge of their own futures, and help others do the same. This is how we build more equitable societies and economies.

But female entrepreneurs are not a homogenous group, they face several and different constrains. In Ethiopia, we found that many women entrepreneurs were stuck in what we call the “missing middle.” The loans they need are too large for microfinance, but too small for traditional banks. Following, we helped microfinance lenders scale up, and commercial banks scale down. Today, this scaling up and scaling down, has led to the sustainable lending of 2 to 4 million dollars a month to women entrepreneurs in Ethiopia, who before this had no access to capital.

It has been such a success that we’re bringing those lessons learned in Ethiopia to Indonesia. Indonesia has a higher GDP per capita, but the innovation in Ethiopia can be applied in Indonesia, where we’re working with the government to help women entrepreneurs access capital to start or expand businesses. This work is just beginning, but we think it holds great promise.

While access to finance is key to female entrepreneurs, laws and social norms also play important roles in determining women’s ability to be successful in business or gain access to paid jobs.

Over the past 30 years, East Asia Pacific has experienced outstanding economic growth. Female entrepreneurs have both contributed to and benefitted from this development. However, we have found that output per worker could be 7 to 18% higher across a range of countries if female entrepreneurs and workers were in the same sectors, types of jobs, and activities as men and had the same access to productive resources. This could be an economic game-changer.

The more access and resources we give women, the more they help other women economically as well. In Indonesia, female entrepreneurs tend to employ female workers and therefore play a significant role in increasing the level of female participation in the labor force.

Of the 173 economies measured by the World Bank Group’s Women, Business and the Law project, 90% have at least one law impeding women’s entrepreneurship and employment. That’s nearly all economies in the world. Differences in how the law treats women and men can also affect women’s incentives and ability to get the job of their choice. Globally, 56% of countries restrict women from pursuing the same economic activities as men; some directly prohibit women from holding particular jobs, for example operating a train or a crane or working at night.

Laws restrict women in terms of their access to property and building wealth, the types of jobs they can have, and the benefits they are entitled to upon retirement.

And, as women end their professional careers, we see a significant gender gap. Women tend to work over shorter periods owing mainly to family responsibilities. Policies to compensate these breaks in formal employment are absent in many pension schemes. In some economies where the retirement age for women is lower than for men, we also see a gender gap in the replacement rate, the value of a person’s pension compared to the previous salary. The lower retirement age for women is also potentially negatively influencing their opportunities for taking on leadership positions in public and private sectors. 

This is why we are working with governments to assess new laws and policies through a gender lens. A good example of that is our partnership with the Government of Vietnam, which is reviewing its Jobs Strategy in response to changes caused by automation, globalization, and an aging labor force. We are heartened to see this kind of commitment, and are proud to have been asked to support Vietnam as it monitors the gender implications of its labor code.

Women in East Asia and the Pacific have the highest labor force participation in the world, and while the wage gap is closing for most economies in the region, women continue to earn less on average because they tend to cluster in low-wage industries and occupations.  

Looking at how women choose their career paths in Vietnam, our research, done in collaboration with the Australian Government, found that women take non-monetary incentives such as flexible hours and paid leave far more into account when accepting a job so they may forego higher pay for greater job security and flexibility.

In our publication “Voices of Vietnamese Women Entrepreneurs” a woman says "I want to grow my business, but only to the extent that I can manage it. [..] As a woman, I have a lot of other responsibilities to both my family and society." This is an admirable, but also restraining.


Fostering an environment where women can more easily balance domestic and professional roles is likely to enhance women’s economic empowerment and increase family earnings. We know that women are more likely to spend time in non-job related activities than men, doing household chores, caring for children and the elderly.

By providing childcare services, we can increase female participation in the labor force. Programs with free or subsidized childcare in Mexico have been successful, and in Indonesia, women with access to informal childcare arrangements returned to the labor market two years earlier on average. Around the world, the percentage of women who reported receiving wages was two times higher in economies that provide free childcare than in those that do not.

To eliminate both financial barriers and non-financial barriers for women, we are very excited about one of our new initiatives: the Women’s Entrepreneurship Finance Initiative – or We-Fi.

Championed by the United States and Germany, this is the first major global initiative to provide complementary public and private solutions to women entrepreneurs. We-Fi will work with governments to improve laws and regulations that repress women. It will also support a range of financial institutions particularly in developing countries.

The World Bank is We-FI’s trustee and with funding at over US$325 million, we are well on our way toward unlocking more than $1 billion to support women entrepreneurs.

I’d like to highlight the fact that nearly half of the current We-Fi donor countries are in APEC, including Australia, Canada, China, Japan, South Korea and the United States.

These are just a few of our recent results in working with governments and the private sector to identify what works to promote women’s entrepreneurship and economic inclusion. We understand what’s holding women back; and we know what needs to be done for them to move forward. That’s what makes this such an exciting time for women’s inclusion. We can achieve that if we work together. 

In a recent interview series in Huffington Post on trailblazing women role models, Ms. Thuy Truong, a Vietnamese serial entrepreneur and one of Forbes selected most influential women in 2017 in Vietnam, said “I always think: What can I do to move my company forward every day”. This way of thinking can serve also as inspiration for us here at this Forum, what can we do to move women owned companies forward?

It’s been proven that changes in public policy and partnerships between public and private sectors can improve opportunities for female entrepreneurs and workers. By pooling our efforts, we can build smart societies that do not ignore the ability, energy, and intelligence of half its people. I have every confidence that the people in this room will help us reach that goal.

Thank you, and I look forward to hearing the great ideas and discussions this Forum will bring.