Benefits of gender parity

May 19, 2016

Half of the world’s population is female but women contribute only 37% to Global Domestic Product.

PIC:  Melinda Gates (left) shakes hands with Vivian Hunt after she presented findings from the study on Delivering the power of parity at Women Deliver in Copenhagen. (Courtesy photo)

COPENHAGEN - What is at stake if business remains as usual in relation to addressing gender inequality in the world of work? What is lost when women are kept out of the world of high quality paid work?

A whopping $12 trillion in annual global GDP by 2025 -- it is the equivalent to the current GDP of Japan, Germany, and the United Kingdom combined. These are much needed resources if the world is to meet the Sustainable Development Goals (SDGs).

A new report by McKinsey Global Institute, a business and economics research organization, studied 95 countries, representing 93% of world's female population and found that 40 countries had high levels of inequality on an identified set of gender indicators.

McKinsey found inequality in four major categories in the world of work: essential services and economic opportunity, legal protection and political voice and physical security and autonomy.

However, if addressed by closing the gender gap, huge gains could be made.

Launching a discussion paper, "Delivering the power of parity: Toward a more gender equal society" at the Women Deliver conference in Copenhagen on Tuesday, Vivian Hunt, the managing partner of McKinsey and Company, UK said that investing 1.2 to 1.3% of global GDP, that is an estimated 1.5 to 2 trillion more dollars in incremental public, private and or individual spending to address gender inequality, would get a 6-8 times return on investment in millions of lives transformed.

"It would require collaboration between governments, businesses and NGOs to prioritise areas that will close the gender inequality gap," she said.

Half of the world's population is female but women contribute only 37% to Global Domestic Product.

World over, women do not enjoy equal rights with men to opportunities, representation, contribution on the economy. There are many barriers to women's full economic participation.

McKinsey stated that globally 723 million women are victims of intimate partner violence.  On education, according to UNICEF statistics, 59 per cent of the total illiterate youth population are young women.

Women are often unbanked. The report states that 190 million fewer women have a bank account while despite the global technology explosion and digital connectivity, still 105 million fewer women connect.

McKinsey's report asserts that fixing these issues will reduce gender inequality and add 12 trillion dollars to the global economy in a decade.

Hunt listed six major areas - education, family planning, maternal and child health, financial and digital inclusion, assistance for unpaid care and domestic work - for prioritisation.

In addition, legal protection, reduction of violence against women which she said all go hand in hand in addressing gender inequality.

In a report she described as "the most comprehensive attempt todate at estimating the size of this economic potential,"  two scenarios were used to estimate the costs.

In the first, where women fully participated in the labour market identically with men, with the gender gap between men and women fully closed, working same hours, having the same proportions of skills sets, it was estimated that annual global GDP would go up by 26% raising about $28 trillion dollars.

"But this is not realistic, it would require very fast change in a short time," Hunt said.

The realistic scenario, of each country matching the fastest growing country in their region in terms of gender participation would, however, add $12 trillion.

"The correlation between gender equality at work and gender equality in society is very strong. The two go hand in hand," Hunt said.

She pointed out that unpaid domestic work was a major lever for closing the gap.

"Each region needs to develop an eco-system for child care services whether it is government subsidised, employer-assisted or self-funded. All can help close the gap and free up women, girls and families to choose how to spend their time," Hunt said.

Other interventions include building secondary schools for girls, meeting unmet need for family planning, maternal health services, increasing simple supplies, digital access for young people, contraception, sexuality education for girls and boys, financial inclusion, access to savings, credit accounts platforms, digital literacy, having a mobile phone knowing how to use it and connecting to innovators.

The next time a girl or woman is told to stay at home, the next time the budget for that workplace daycare is questioned, or the scholarship for girls' high education, it is not one or a few women left behind, it is the whole world's progress at stake.

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