Women can add $12 trillion to global GDP – IMF says

In its new paper released on Friday the International Monetary Fund (IMF) said global GDP could increase by US$12 trillion by 2025 through reducing gender gaps and promoting women’s economic empowerment, such as participation in the workforce or presence in leadership positions.

“Similarly, implementing policy reforms to increase women’s participation in the labor force would increase growth in the US by 5 percent, in Japan by 9 percent, in the UAE by 12 percent, and in Egypt by 34 percent,” stated the working paper entitles, ‘Tackling Legal Impediments to Women’s Economic Empowerment’.

The paper explains the different types of legal barriers to women’s economic empowerment, their origins, and how they have inhibited women’s economic participation. It also discusses how legal reforms can effectively promote gender equality and incentivize women to increase their participation in the economy.

The IMF paper provides specific country examples through a selection of cross-regional case studies, focusing on how countries in various regions and cultural contexts (Iceland, Peru, Rwanda, the Philippines, Tunisia and the United States) have removed such legal barriers, incentivized women’s economic empowerment, and how such measures have impacted economic growth.

The paper indicated that the overarching legal framework is the 2003 Rwandan Constitution which enshrined the principle of equality between men and women and implemented a requirement that women should occupy at least 30 percent of positions in Parliament.

“Today, over fifty percent of parliamentarians and ministers are women.94 Female parliamentarians have, in turn, been able to successfully push for key legal reforms aimed at strengthening gender equality in Rwanda. For example, with respect to property law, Rwanda has passed legislation to provide for equal inheritance, succession and land rights for women, including prohibiting discrimination based on sex in matters relating to ownership and possession of property,” it said.

The paper stated that discrimination against women in the workforce globally has led to more restricted options for paid work, fewer opportunities in management, and the prevalence of a gender wage gap. The gender wage gap causes an average national income loss of 15 percent in OECD countries.

“Addressing the gender inequality in the workforce has the potential to unlock needed resources (especially for developing countries) and support economic development. It would also help reduce global poverty, since women are more likely to be illiterate and poor. Furthermore, reducing gender inequality could help mitigate the negative effects of a shrinking workforce in developed countries,” the paper stated.

It further stressed that eliminating gender bias and discrimination in the law is only the first step, but this alone is not enough. “In addition, legal reform should also incentivize women to participate in the economy and encourage employers to hire women in traditionally male dominated roles. This includes implementing laws which protect women from discrimination in the workplace due to pregnancy and childbirth, and which promote higher presence of women in leadership roles.”

“In addition, resources should be allocated via policy reforms that make it easier for women to enter and stay in the workforce, such as parental leave, lactation facilities, etc. Ultimately, gender mainstreaming and gender budgeting on all levels would transform gender relations and reform existing structures that cause discrimination,” the IMF paper stated.