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Empowering Women, Boosting Economies

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October 4, 2006—In 1999, 35 women on the isolated island of Char Montaz in Bangladesh discovered they could make a huge difference in their community by going into business.

Ignoring criticism they were breaking society's rules by working outside the home, they started the Women's DC Lamp Enterprise with funding from the World Bank and the United Nations Development Program, and assistance from a local non-governmental organization Prokaushali Sangsad Limited (PSL).

The women built battery-powered direct current lamps to replace kerosene lanterns widely used in local homes—a known source of indoor air pollution.

And as they mastered lamp construction, they also learned about quality control, business development and marketing.

Soon, their critics were their customers. Within two years, they were bringing low-cost light and clean power to over 1,200 households, shops, and boats, and 300 businesses. Shops stayed open longer, children spent more time on school work at home, and incomes increased by 30 percent.

Today, the Opportunity for Women in Renewable Energy Technology Utilization in Bangladesh project and others like it are seen as proof that development and economic opportunity for women can and should mix, and empowering women can have a powerful effect on a country's economy.

Norway Increases Support for Gender Action Plan

The World Bank's Gender Action Plan won praise-and increased financial support-in Norway during President Paul Wolfowitz's visit to the country October 15.

Norwegian International Development Minister Erik Solheim told Wolfowitz Norway would increase its support for the plan from 5 million Kroner (US$740,000) to 20 million Kroner (US$3 million).

"We believe, as you believe, that this is not just a moral or a human rights or a political issue-it's deep down also an economic issue," Solheim said.

"Our government has put gender as one of the four main issues in our development policies and it makes gender a natural area of cooperation between the World Bank and Norway."

The Bank's US$24.5 million Gender Action Plan, "Gender Equality as Smart Economics," was launched September 16 during the IMF-World Bank Annual Meetings to spur greater economic potential for women in infrastructure, agriculture, and finance in developing countries.

"I'm really delighted that you are helping lead the way on this issue now," Wolfowitz said. "And I think that what we are hoping to do with the Gender Action Plan is to develop more concrete ways in which this basic idea that the whole society benefits when everybody has equal access can be incorporated in more and more of the programs that we actually do."

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That's the rationale behind a new four-year, US$24.5 million Gender Action Plan to help women play a bigger role in the economies of developing and middle-income nations.

The plan, Gender Equality as Smart Economics, was announced last month by World Bank President Paul Wolfowitz at the IMF-World Bank Annual Meetings in Singapore.

It argues that gender equality in the workforce makes economic sense and details ways the Bank can help empower women in the developing world.

The plan has won strong support from donors. The German Minister for Economic Cooperation and International Development, Heidemarie Wieczorek-Zeul, joined Wolfowitz in announcing the plan in Singapore and will host a follow up conference on women's economic empowerment and the Gender Action Plan in early 2007. Norway has been an important partner in the plan's development and has expressed interest in supporting its implementation once activities are launched.

The plan increases resources devoted to gender issues in Bank operations and technical assistance, and ramps up research and statistics-gathering on how gender-based economic barriers affect a country's economy.

Specifically, the plan aims to increase women's participation in infrastructure, finance, private sector development and agriculture—areas directly related to economic growth, says Mayra Buvinic, sector director of gender and development at the Bank.

The plan also finances new research on how countries are affected by women's participation—and lack of it—in the workforce. Such research will also recommend ways to remove barriers to women's economic empowerment.

"We want to look at conditions in particular markets (labor, credit, land and women's entrepreneurship and business ownership)—conditions for the participation of women—that impede growth," says Andrew Morrison, lead economist for Gender and Development.

Morrison says Bank researchers want to find out, for example, how the inability of women to access credit, hold title to land, or access technology impinges on growth.

"We want to document these, because by documenting and carefully analyzing the barriers to women's participation in these key markets, we can identify policy levers to increase that access."

'Not an Economically Smart Situation'

While a lot of progress has been made in the last 30 years improving women's health and education, women in many parts of the world are still at the periphery of the economy, marginalized in segregated low-paying jobs, or effectively barred from the workforce altogether, Buvinic says.

"Women have much more education today than they had a decade ago, and they're much healthier. But they're not able to fully utilize the education that they have in the labor market, since they still face restricted opportunities in the world of work," says Buvinic.

"This is not an economically smart situation," she adds.

The barriers women encounter vary from country to country and may be cultural, legal, or the result of ingrained business practices or customs. Young women have a much more difficult time moving from school to work than young men, and generally are paid significantly less, Buvinic says.

"The gap in earnings between women and men continues, despite the fact some countries have made quite a bit of progress," she says. "The gap is often explained partly by differences in experience and/or education, but there's always this residual gap that's likely due to discrimination."

Evidence shows that women's lack of economic opportunity perpetuates poverty, says Buvinic. But evidence also shows that greater opportunity for women translates into greater opportunity for their children, and benefits society as a whole.

"And there is growing evidence that shows that there is a relationship between better economic conditions for women and increased growth of countries," Buvinic says.

That evidence echoes the major findings of the Bank's 2006 World Development Report , released a year ago, which noted that "making markets work in more gender-equitable ways can significantly raise women's productivity and incomes and contribute to economic growth."

"The pursuit of gender equality makes business sense for a development institution," Buvinic says. "And this is what the plan really stresses-that gender equality is good in itself, but also that it is instrumental to the achievement of other goals and key to reduce poverty and attain shared growth."

She predicts the Gender Action Plan will be strongly supported in "a wide range of developing countries, because this plan tackles issues regarding women that cut across a wide variety of countries and different economic circumstances. The issues that the plan addresses are equally relevant in fragile states, in low income countries, and in middle income countries."

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