Investing in women: economic imperative of gender equality

In the face of rising global commodity prices and tighter financing conditions, Pakistan finds itself at a critical economic juncture. These challenges disproportionately impact women, who constitute nearly half of the population and are significantly deprived of health services, education, financial access, economic empowerment, political participation, and decision-making power. The need for increased investments in gender equality has never been more pressing, and pivotal in enabling Pakistan to leverage its full human capital.

Pakistan’s Gender Gap: The World Economic Forum’s 2023 Gender Gap Report underscores Pakistan’s gender disparity, where the country ranked 142^nd among 146 countries. This gap is acutely felt in key sectors critical to economic and social development, including women’s leadership in government, the corporate sector, STEM fields, and entrepreneurship. With female workforce participation in Pakistan at 22 per cent — among the lowest in South Asia — and 8 per cent of micro, small and medium enterprises (MSMEs) led by women, Pakistan significantly underutilises the vast potential of its female demographic. In addition, the 2023 UNDP-National Commission on the Status of Women’s report on Gender and Digital reveals a pronounced digital divide, with a 67.5 per cent gender gap in internet access and a 44.7 per cent gap in mobile phone usage, further marginalising women from the digital economy and opportunities for innovation.

The Imperative for Gender Equality: The push for gender equality in Pakistan transcends moral obligations. It is the cornerstone for building equitable societies and dynamic economies as well as enhancing national resilience against climate change. This year’s International Women’s Day theme, ‘Invest in women: Accelerate progress’, is a clear call for socio-economic and financial investments in women. Recognised not only as a fundamental human right but also as a strategic economic opportunity, gender parity is projected to potentially boost Pakistan’s GDP by $251 billion by 2025.

UNDP is at the forefront of championing gender equality in Pakistan and globally, targeting gender parity stressors with strategic policy solutions and structural interventions. These efforts are multifaceted, aiming to transform women’s livelihoods through green initiatives and digitalisation, broaden their access to finance and capital, advocate for gender-responsive budgeting, and position women as agents of change. Furthermore, UNDP advocates for structuring innovative financing policies and mechanisms in closing the substantial gender equality funding gap worldwide, currently estimated at an overwhelming $360 billion annually.

Innovative Financing for Gender Equality: Innovative financial mechanisms, such as blended finance and sustainability-linked investments, have become indispensable in advancing gender equality, especially as traditional funding sources — public financing and international aid — have declined due to increasing financial constraints globally. These mechanisms are more than alternative financing routes; they offer an opportunity to push gender transformation projects towards achieving true equality and equity.

Blended finance harnesses a variety of financial instruments — including grants, direct investments, credit lines, bonds, and technical assistance — each playing a vital role in funding initiatives that aim to bridge the gender gap. Pakistan’s recent introduction of a private sector-led three-year Gender Bond aimed at financing women-led micro-businesses and micro-level infrastructure projects in the post-2022 floods context is a testament to the potential of such instruments. Adopting a gender lens in impact investments can mobilise international capital towards sustainable projects that benefit women-owned and gender-equal businesses, thereby fostering inclusive growth and societal well-being.

Moreover, the ‘Banking on Gender Equality’ policy launched by the State Bank of Pakistan, alongside the guidelines on green and gender bonds issued by the Securities and Exchange Commission of Pakistan mark significant strides towards weaving gender equality into the nation’s economic fabric. These initiatives not only champion inclusive growth but also spotlight Pakistan as an attractive market for gender-focused global financial investments.

The Road Ahead: As Pakistan transitions towards a newly elected government, embedding principles of gender equality and gender equity within its economic and financial blueprint becomes crucial for achieving sustainable development. Such integration promises substantial economic dividends and a more inclusive society. The time to act is now, to ensure a future where no one is left behind, leveraging the untapped potential of Pakistan’s women for national progress and prosperity.

Published in The Express Tribune, March 8^th, 2024.

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