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Women's Leadership and Economic Empowerment: A Solution for the Economies of the Middle East and North Africa

The Middle East and North Africa (MENA) are undergoing transformative changes As the region’s complex landscape of issues evolves, prioritizing women’s economic empowerment should be an essential part of addressing current challenges across MENA countries.

Report by Farhat Popal and Barbara Langley March 8, 2021

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INTRODUCTION

The Middle East and North Africa (MENA) are undergoing transformative changes as the region deals with the fallout from the Arab Spring uprisings, the civil wars in Syria, Yemen, and Libya, geopolitical shifts, and the COVID-19 pandemic. As the region’s complex landscape of issues evolves, prioritizing women’s economic empowerment should be an essential part of addressing current challenges across MENA countries.

Gender equality promotes economic growth, contributes to reducing income inequality, and boosts economic diversification. These are critical needs in the MENA region, which faces challenges including poverty, weak economic governance, the concentration of wealth, misalignment of education, and a struggling labor market with high unemployment rates.

At the same time, the rise of the largest, most well-educated and highly urbanized generation of young people in the region’s history imposes both challenges and opportunities that will impact the future of individual countries and MENA as a whole. The region’s ability to ensure its youth have access to robust education, adequate jobs, and the quality of life that they aspire to will determine the role that young people play in this changing landscape.

Progress has elevated people’s expectations, but as the 2016 Arab Human Development Report points out, advancing overall well-being is only meaningful if people have the opportunity to make choices and exercise those choices. The United Nations defines human development as “…expanding the richness of human life, rather than simply the richness of the economy in which human beings live. It is an approach that is focused on people and their opportunities and choices."

Advancing the MENA-region economies is an essential part of that effort. Moreover, while the Arab region as a whole saw an increase in human development levels between 1980 and 2010, mostly due to gains in education and health, inequality is rising.2

In this policy brief, we detail why private enterprise and women’s economic empowerment is important for the advancement of societies; describe the successes and challenges of the MENA region in ensuring women’s financial inclusion; and make recommendations for policymakers and other stakeholders in promoting prosperity in the region.

BACKGROUND

Women’s Economic Empowerment

Women’s economic empowerment comprises women’s ability to participate equally in existing markets; their access to and control over capital and productive resources; access to decent work; control over their own time, lives and bodies; and increased voice, agency and meaningful participation in economic decision-making at all levels, from the household to international institutions.3 Labor force participation is just one indicator of women’s economic empowerment, but it exemplifies this broader struggle: In the MENA region, female labor force participation stands at 21%, compared with the global average of 51%.4 According to a recent report by the Wilson Center, this is due to the absence of female friendly workplace policies, especially in the private sector; poor public transportation systems; and enduring social norms that dictate both a woman’s decision to take a job and what careers are deemed acceptable.5 For the 21% in the labor force, economic participation can vary based on a number of factors.

For example, in Jordan, the jobs in education, health services, and public administration that women traditionally take have not grown fast enough for the large numbers of women earning university degrees.6 In Iraq, war and conflict have resulted in vast numbers of internally displaced people, gender-based violence, and women serving as heads of households. In addition, 4 million Syrian refugees are trying to rebuild their lives in Iraq and facing similar constraints on their economic opportunity. Things are better for the close to 3.6 million Syrian refugees in Turkey, where the government has granted access to education, the health system, and social services, and, since 2016, refugees have had the right to obtain a work permit.7 Since COVID-19, however, increasing levels of unemployment have posed a challenge to job creation and boosted competition for available opportunities.8 Despite these troubling circumstances, 800,000 Syrian men and women are working informally, and there are examples of Syrian women entrepreneurs finding creative solutions to support themselves and their host communities.

Private Enterprise and Prosperity

Private enterprise and private-sector development help alleviate poverty and boost economic growth. Women in the MENA region exceed men in higher education enrollments and outcomes, but this does not lead to greater female labor-force participation, particularly in the private sector. Closing the gender gap in the workforce — with women employed at the same levels as men across sectors — could add $28 trillion to global GDP.10 This is a challenge that the region needs to address.

According to a report by the Wilson Center that looks at Jordan, Tunisia, and Oman as case studies for the region, education systems do not provide essential workforce skills in management, teamwork, leadership, communication, and oral and written presentation. While there has been a rapid increase in university enrollment, curricula have not been adapted and aligned with the needs of the private sector, and students are not choosing to study in fields that align with labor-market needs. In addition, the private sector consists of mainly low-productivity small- and medium-sized enterprises that face growth constraints. For women specifically, the private sector is seen as less “family friendly” – the public sector has shorter working hours, better maternity policies, and more stable and secure jobs. Women who do want to start or grow their own businesses may find legal and/or regulatory obstacles in their way, such as failing to secure loans because they lack necessary collateral. These economic barriers are immense: Just 20% of MENA women are self-employed, compared with 47.7% globally, according to the International Financial Corporation. Female entrepreneurs in the region are also frequently shut out of the credit markets; IFC estimates that there is a $16 billion gap between the amount of credit they need and that they actually receive.

The Role of Women’s Leadership

From the household to the highest level of corporate management, women’s leadership makes a difference. Women-led households tend to save more money than those led by men and use their savings in more productive and effective ways over the long term.11 In addition, women are more likely to reinvest high proportions of their income into health, nutrition, and the education of their children. This in turn creates a multiplier effect in which families and communities grow healthier, are better educated, and more economically stable over time.12 There is also a strong correlation between gender diversity on corporate boards and financial performance, with companies with women on their boards experiencing a 42% greater return on sales and a 66% higher return on invested capital than those with less gender diversity.13 Gender diversity on boards also contributes to greater philanthropy and reduces employee layoffs and unethical business practices.

Perhaps most importantly, women’s leadership contributions overall result in better societal outcomes. According to Women and Leadership: History, Theories, and Case Studies, women score higher than men on all four dimensions of transformational leadership — idealized leadership or charisma, inspirational motivation, intellectual stimulation, and individualized consideration. This difference is consistent with women being more communal, and more democratic and participative, and helps make them more effective. Women are also more likely to demonstrate cooperation and endorse social values that promote the welfare of others and are less likely to support unethical decisions. Women’s leadership and political empowerment is associated with more inclusive policymaking that represents the concerns of families, women, and ethnic and racial minorities. It also increases standards of living, societal gender equality, and national wealth.

CHALLENGES & SUCCESSES IN MENA

Challenges

Women in the MENA region face legal, structural, and sociocultural barriers that severely limit their economic opportunities and participation. This results in dire numbers: The rate of young women ages 15 to 24 that are not participating in education, employment, or training is 26 percentage points higher than for young men in the MENA region, ranging from 54.5% in Egypt to 22.8% in Lebanon.16 The World Bank examined 10 years of data to understand how women’s employment and entrepreneurship are affected by legal discrimination. The data show that while the typical global economy gives women only three quarters of the legal rights of men in the measured areas, women have less than half the legal rights of men in the typical MENA economy.17

Examples of such barriers include lack of access to financial institutions and discrimination in terms of asset ownership. Evidence suggests that individual savings accounts increase economic self-reliance, sales, profits, and economic empowerment.18 However, in many countries, women are unable to open a formal bank account without permission from a male relative.19

A woman’s income can more than quadruple when she has the right to own and inherit property. Yet this is one of the greatest legal barriers to women’s economic empowerment in the MENA region, where female landowners make up as little as 5% of property owners. When women do control land, it is often smaller in size and of lower quality than land held by men.20 Land ownership contributes to economic stability and can reduce vulnerability to domestic violence and poverty. It can also serve as collateral in establishing credit, which is often required to start a business.

Supporting entrepreneurial activity is a key component of promoting innovation and enhancing local and national economies. A 2016 report on the Middle East’s economic recovery and revitalization highlighted the impact of entrepreneurship’s “multiplier effect” on an economy. The report noted that for every 10 successful new enterprises, nearly $1.5 billion in new valuations and more than 2,500 jobs are directly created.21 Because women entrepreneurs face disproportionate obstacles, supporting their efforts can do even more to enhance local and national economies in the MENA region.  

According to the World Bank’s 2019 Doing Business report, the MENA region ranks lowest on indicators pertaining to getting credit, starting a business, trading across borders, and resolving insolvency.22 For women, lack of access to capital, restrictive inheritance laws, likelihood of informal employment, the burden of unpaid care and domestic work, and other obstacles compound these factors. This is a global problem: In 40% of economies, women’s early-stage entrepreneurial activity is half or less than half of men’s activity.23 This is all the more important to address when considering the lack of equal opportunity employment for women. According to a 2018 World Bank report, in more than half of the countries in MENA, women were prohibited from working in specific industries.24

Structural barriers also impede women’s ability to contribute to their local and national economies. Lack of safe and reliable transportation inhibits women’s mobility; the undue burden on women in performing unpaid care work and their concentration in the informal economy; and inequitable access to education and training opportunities all further hinder women’s access to economic opportunity and empowerment. And mandatory retirement ages are typically around 50 or 55 in the MENA region and can be lower for women than for men. This can limit women’s career expectations and reduces the pensions they receive.25

Another significant barrier is discrimination in establishing legal identities and citizenship. Restrictions on mobility, the challenge of illiteracy, and legal hurdles can negatively impact women’s ability to obtain identification cards. These are often needed to access social services, financial services, and credit, as well as other citizenship benefits. Gender-based legal differences impede women’s ability to obtain national identification documentation in 48 countries, including in the MENA region. In some, married women are required to provide additional documentation, such as a birth certificate, to receive an ID card.26 For women who cannot provide this additional proof, access to education, health care, benefits for their children, and a myriad of other services are inhibited in fundamental ways.

Sociocultural norms also handicap women in the MENA region. In 65% of the countries in the region, working outside of the home was perceived to be inappropriate for women.27 Often, women are expected to bear a disproportionate burden of household work and childcare. According to a report by the McKinsey Global Institute, 75% of the world’s total unpaid care is undertaken by women.28 And COVID-19 will deepen these inequalities in the gender division of labor, according to UN Women.29 This can contribute to the lack of adequate parental leave policies and workplace discrimination, which in turn can result in women’s decisions to leave work once they have children.

Gender-based violence and sexual harassment—both pervasive problems in the MENA region—also play a destructive role: In addition to the inherent trauma, the impact of such experiences lowers earnings and decreases productivity.30 For example, the 2015 Egypt Economic Cost of Gender-Based Violence Survey estimated that 7.9 million Egyptian women experience violence yearly, perpetrated by spouses, close relatives, and/or strangers in public spaces, including on public transport. It estimated the economic cost of gender-based violence to Egypt at $2.17 billion a year.31 In areas of conflict, the impact can be exponential.

COVID-19 is likely to exacerbate the problems. Previous recessions and pandemics tell us that women’s economic security, employment, political representation, health outcomes, and educational achievement are negatively impacted by economic and health crises — more so than men’s. This has a long-term impact on women’s human capital formation and human security. Most importantly, these crises set back gender equality overall.32

Women and girls are disproportionately affected by the COVID-19 pandemic, including by economic disempowerment. Women make up 70% of the global health workforce, putting them at greater risk of contracting the virus.33 In Tunisia, for example, women doctors are leading the fight against COVID-19 because male doctors tend to serve in private healthcare or go abroad.34 Globally, nearly 40% of women in wage employment do not have access to social safety nets such as pensions, unemployment benefits, or maternity protection.35 The retail, hospitality, and textile manufacturing sectors — which tend to employ more women than men — are struggling with low consumer demand, which in turn affects women’s employment and hours of work and pay.36

The digital divide also imposes obstacles to women performing remote work where possible or adapting their livelihoods to the current situation. Most of the 3.9 billion people who are offline are in rural areas. They are poorer, less educated, and tend to be women and girls. Beyond COVID-19, ensuring access by rural women and girls to information and communications technology may help to deliver skills, information, and knowledge that they urgently need for their livelihoods, well-being, and resilience.37

And girls are at increased risk of dropping out of school altogether following school closures, potentially impacting their future economic prospects.38 From a leadership perspective, while women dominate the community social work and civil society sectors,39 they are underrepresented in decision-making positions worldwide.40 This means policies for women are not being decided by, or in direct consultation with, women. 

Successes

While these barriers, often deeply rooted in tradition, may seem too numerous and complex to overcome, women across the MENA region are harnessing the power of collective action to influence policymakers and bring positive change to their communities. Since 1983, The Center for International Private Enterprise (CIPE) has been working at the intersection of economic and democratic development to offer technical expertise to business support organizations implementing grassroots, business-led solutions to local development issues.

For example, the Palestinian Businesswomen’s Association, Asala, carried out a large-scale advocacy and multimedia campaign advocating for women’s inheritance rights in the Jenin and Hebron districts (northern West Bank) and the Gaza Strip. In this campaign, Asala built a strong coalition among government institutions, legislative bodies, and civil society organizations aiming to end discriminatory inheritance practices and unequal access to the land market. One of the major outcomes of this campaign was a policy reform in the “al-takharuj” law, an Arabic term for relinquishment of inheritance shares.1 Asala succeeded in preventing al-takharuj within four months of the passing of the deceased, which is an achievement for women and a protection of their rights from manipulation and mishandling of inherited property. The campaign has helped more than 4,000 women beneficiaries (direct and indirect), including women who have successfully obtained their inheritance shares. CIPE has worked with Asala for many years, bringing best practice examples in policy advocacy from around the world. As a result, Asala has distilled its priorities into a policy agenda that includes proposed solutions on issues such as increasing the formality of women-owned micro-, small- and medium-sized enterprises; improving access to vocational education and training; enhancing women’s representation on boards of directors and in leadership positions at the Chambers of Commerce, Industry, and Agriculture; empowering women to claim their inheritance rights; and unleashing economic opportunities and access to capital.

Similarly, Jordan’s Young Entrepreneurs Association catalyzed the country’s first grassroots, civil society-led entrepreneur and small- and medium-sized enterprise advocacy effort. This resulted in lowering the capital threshold requirement for the registration of limited liability companies and in the licensing of small homebased businesses in Amman, thereby expanding opportunities for women to join the formal economy. A subsequent overarching small and medium business agenda advanced reforms across several key pillars of the entrepreneurship ecosystem and informed the development of the government of Jordan’s “Vision 2025” and the National Entrepreneurship and SME Growth Strategy.

Building from this experience and with CIPE’s technical expertise, three national businesswomen’s associations in Jordan are now engaged in collective action, ensuring that their voices are represented when Jordan considers legislation governing nongovernmental organizations. The three women’s organizations are the Jordan Forum for Business and Professional Women, Business and Professional Women-Amman, and the Women’s Access to Entrepreneurship and Development and Training Society. These groups are also working to address barriers to women’s full participation in the economy and pandemic-related challenges. And by researching and drafting policy solutions related to these barriers and conducting related advocacy, they are influencing decision makers to promote women’s economic empowerment.

Conflict-affected settings present additional challenges. While conflict imposes suffering on everyone, women and girls are particularly affected in both the short- and long-term. Sexual assault and exploitation, victimization, isolation, prolonged emotional trauma, and unwanted pregnancies are common in war zones. Often, in such circumstances, women struggle to support their families and keep their households together while their husbands and sons — the traditional breadwinners — are caught up in the war and its aftermath. This new role as primary provider, coupled with the vulnerability of integrating into a new neighborhood or culture, often exposes many women to further abuse. However, stories of resilience and perseverance abound.

Initiatives like the George W. Bush Institute’s WE Lead program are also a vital part of advancing women’s leadership and role in the economy.41 WE Lead targets midcareer women leaders from across the Middle East, North Africa, and Afghanistan who enhance economic opportunity for all. It provides them with concrete leadership development skills and economic training, exposes them to innovative organizations with likeminded goals, creates opportunities to hear from and meet inspiring trailblazers, and ensures the space and knowledge resources to implement their learning through a personal leadership project. Opportunities like WE Lead can offer the skills, resources, and network for individuals to multiply their impact across communities and countries.

POLICY RECOMMENDATIONS

MENA economies need to remove barriers to participation and provide an enabling environment for women in the workforce

The international community must treat local organizations as partners and not beneficiaries. Women business owners must lead diverse coalitions with civil society and business support organizations and hold government positions to initiate reforms from the local perspective. International organizations can support these efforts with technical expertise, best practice models, and seed funding streams.

Public and private sector institutions should prioritize and expand programming focused on women’s leadership and economic empowerment

Public and private sector organizations — in MENA and via the international community — can play an important role in furthering the economies of the region. One example is through training and mentorship that ensures qualified women rise to positions of leadership and decision-making. Others include advancing human-resource policies to better support women’s participation and leadership in the workforce and enabling women at the grassroots level to access instruments of financial inclusion and control their income. The Women’s Global Development and Prosperity Initiative (W-GDP),42 focused on a whole-of-government approach to women’s economic empowerment that includes the private sector, is an important step in this direction. However, it will require sufficient and consistent funding as well as robust measurement to ensure desired outcomes are achieved and sustainable in the MENA region.

The international community needs to ensure foreign assistance and other support are reflective of local needs and priorities

For effective and sustainable change in women’s economic empowerment and leadership, local needs and priorities must take center stage. The international community can help by supporting women-focused groups and their agendas as well as women leaders seeking to have greater influence in key decision-making forums. In addition, access to new technologies, including the internet and social media, is important for engaging in collective action, and the international community can help bridge the access gap.43

Invest in youth-based programs that promote innovation and interest/expertise in diverse fields

Today, more than 15% of the global population is between the ages of 15 and 24;44 about 20% of the population falls in this category in a number of countries in the MENA region.45 This means that youth-based programs that promote innovation, entrepreneurship, and expertise in diverse fields are essential to ensuring MENA’s young people have the opportunity and access to aspire to their dreams and meet the needs of their economies. Moreover, MENA economies and the international community need to meaningfully elevate and amplify youth voices and experiences in decision-making to guarantee that their unique needs and perspectives are taken into account in policies that affect their futures.

Ensure women, girls, and other marginalized populations are meaningfully involved in decision-making processes related to COVID-19 response and implementation

In addition to inclusion on leadership bodies, women and girls should be consulted on and engaged in developing community and context-specific responses to the COVID-19 pandemic, including program design, implementation, and evaluation.46 Local  women’s rights  organizations and groups  directly  support women and girls in the response to crisis, and the international community can and should talk with these groups when collecting data, conducting needs assessments, and identifying and implementing appropriate responses.47 The international community can also increase funding for women’s rights and women-led organizations that are responding to COVID-19.48 At a more basic level, 51 countries do not report any data by sex. The international community can urge these countries to collect disaggregated data to gain essential insights that will empower them to design more effective and sustainable approaches to treating and preventing COVID-19.

Fund and implement programming to address specific economic impacts of COVID-19 on women globally

This could include supporting women entrepreneurs to pivot to e-commerce, promote remote working, expand into high-demand markets due to COVID-19, and invest in training and job placement programs to access jobs in needed industries.50 It could also entail a focus on extending income support to the vulnerable, preserving employment linkages, providing incentives to balance work and family care responsibilities, improving access to health care and family planning, and expanding support for small businesses and the self-employed. Elimination of legal barriers to women’s economic empowerment should also be a priority.51 In addition, it is estimated that 20 million secondary school-aged girls will not return to school after the crisis has passed.52 It is essential that special measures be devised and implemented to ensure their future economic opportunities are not diminished.

CONCLUSION

Women’s economic empowerment seeks to ensure women have equal access to opportunities in life. It is ultimately good for societies overall because empowering women reduces income inequality and boosts economic growth and resilience. In the MENA region, legal, structural, and sociocultural factors combine to contribute to low female labor-force participation, limiting the region’s economic potential and growth. The public, private, and nonprofit sectors, as well as the international community, can and should support policy changes that allow the region’s women – and therefore its economies and countries – to thrive.