Speech

Threads of Success – Empowering Women in Latin America and Around the World

March 5, 2020

Introduction

Buenos días! Thank you very much, Mr. President and Madame Vice President.

I wish I could be there with you in person. But please be sure I will come to Colombia soon.

I think at the outset of this conference you have asked a very important question. And it is the right question leading up to International Women’s Day: Why is women’s economic empowerment crucial to achieve the Sustainable Development Goals (SDGs) ?

And I will give you my answer: Because women are the pillar — las mujeres son la base — of economic growth, both in Latin America, and around the world.

From the factory floor to the classroom to the boardroom it is the empowerment of women that can make all the difference in whether a country’s future is bright or dimmed.

This will not be news to many of you. Colombia has been a leader in gender equality in the region. This country has a rich tradition of trailblazing women. Perhaps the most famous is Policarpa Salavarrieta, “La Pola”, as she was known.

La Pola was only 14 when she helped lead your independence movement in the early 19^th century. A seamstress by day and a freedom fighter by night she embodied the spirit of this nation. And, of course, she was the first woman to appear on your currency. So I thought it would be fitting to borrow from La Pola this morning and use the idea of weaving to explore how we can strengthen opportunity for women both around the world, and here in Latin America.

1. Gender Empowerment Globally

First, the global backdrop. The unfortunate reality is that too many women and girls all over the world face daily discrimination, injustice, and lack of opportunity. Think about what this means in terms of jobs and prosperity.

Nearly 90 countries have some legal restriction on women’s participation in the economy. [1] In parts of Latin America, and many countries all over the world, a woman’s right to own property, get divorced, or own a bank account, can be limited in a variety of ways.

Even when legal barriers are removed, we know the unseen barriers women face: Unpaid work, poor family leave policies for new parents, gender pay discrimination, inadequate child care options. These are the hidden shackles that limit women.

All of this hinders a country’s economic potential. Our staff research shows that in low-income countries, lowering gender inequality by 10 percentage points could boost growth by 2 percentage points over five years. [2]

And despite what you might think, none of this comes at the expense of men.

We know that men and women bring different skills and ideas to workplace. IMF staff research has shown that in inefficient labor markets, raising female labor force participation can boost overall productivity and in turn lifts the real wages of both men and women. [3]

Think of weaving a fabric. Each strand by itself could be cut easily, but when crisscrossed together it becomes much tougher and resilient. That’s what empowering women can do.

So this is why I like to say that empowering women is an economic “no-brainer”. Colombia and Latin America prove the point.

2. Colombia and Latin America

This country has been a leader in the region.

Look at education. More women than men are now enrolled in primary, secondary, and tertiary schools in Colombia.

In the labor market, women have increased their participation in the economy from 45 percent in 2000 to 59 percent in 2019. [4] And while gaps still exist, they are below both the OECD and regional average.

This is good, but clearly there is more work to do on a range of fronts — from expanding women’s access to health care to improving the inclusion of women in rural areas.

What people see matters. In Colombia, they see over half the cabinet, the mayor of this city, and the Vice President are all women. A historic first for this country.

And what have these female leaders done with their power? They’ve used it to help more women.

Just last week your Vice President sent a letter to 3,000 companies asking them to include more women on their boards. What a smart decision.

Perhaps she read our staff research showing that more women in the financial is associated with greater financial stability . Is anyone shocked by this?

In another study we looked at 2 million firms in Europe and demonstrated that gender diversity on corporate boards leads to more profitability. And yet, just 18 percent firm of firms around the world are run by women.

So the threads of our economic success are laid out in front of us. We just have to pick them up and use them .

Colombia has shown us how. Consider the peace agreement. Women were key to the negotiations. The final agreement contained nearly 130 measures designed to promote gender parity and guarantee women’s participation in the economy.

And as we speak, Colombian society is helping thousands of migrants, both men and women, who face substantial risk as they flee Venezuela.

Other countries in the region have stepped up as well when it comes to female economic empowerment.

In Chile, childcare programs lifted female labor force participation and helped the economy. Proving, by the way, that empowering women is an economic-gamechanger.

In Peru, changed laws over the past two decades have increased female labor force participation by nearly 15 percent. [5]

So how do we make more progress globally? Let me highlight two areas where we can learn from Latin America —Fiscal Policy and Financial Technology (FinTech).

3. Two Threads of Success – Fiscal & Fintech

The first step is investing more in health, education, and infrastructure. I know we will discuss this more in our conversation. Fiscal policy is a key tool to empower women and meet the SDG. These goals can and should build off each other and generate a virtuous cycle.

In fact, new IMF staff research highlights the role of fiscal policies in bringing women in the labor force. [6]

It shows how in countries like Colombia reducing education gaps between men and women and creating better access to schools and hospitals disproportionately benefits women.

There is a saying when it comes to fiscal policy. “ Show me your budget and I’ll show you what you value.” When countries prioritize female empowerment in their budgets, they show their values clearly. That is why I was so pleased to see that for the first time the national development plan for Colombia included a chapter on women’s empowerment.

But governments can’t do this alone. It takes the private sector as well. This brings me to the second thread — fintech.

Women around the world face a series of obstacles when it comes to financial inclusion —from lower literacy rates to lack of proper paperwork to social norms surrounding bank accounts.

Fintech can help slice through some of these knots . New staff research from the IMF coming this spring will focus specifically on this issue and look at the precise ways how fintech can bridge our financial divides. Why are we concentrating in this area?

Because our own analysis shows a strong association between increasing access to bank accounts and reducing income inequality. The data also shows that while both men and women gain from inclusion, the largest reduction in income inequality comes when women are given increased access to finance. [7]

The financial gender gap for women in developing countries is about 9 percent and has remained largely unchanged since 2011.

Here again, we see the connection between SDGs and gender empowerment.

There is no silver bullet, but we know that fintech can play a catalyzing role.

In Cambodia, for example, strong public-private partnerships in supporting mobile finance has led to a tripling in the number of micro-financial institutions since 2011. These institutions have now provided loans to over 2 million new borrowers, representing nearly 20 percent of the adult population. Many of these citizens had never had a bank account. Now they can save for the future and perhaps even start a business of their own.

Colombia understands this well. According to the IDB, Colombia leads the region when it comes to creating the right environment for financial inclusion. You are reforming a system to reward creativity and, as you have said many times Mr. President, unleash entrepreneurship — emprendimiento. In turn, many of the gains will go directly to women.

Your urgency should inspire others to follow suit. And the example of your policies show the way forward for both the region and the world.

Conclusion

As I have said today, there is not one answer, but many. Not a single thread, but a multitude. It will take the weaving together of different strands to create a stronger societal fabric. From parental leave to child care to eliminating legal barriers to tax policies.

We must do all of it, and for the sake of meeting the SDGs, and building a better future for our daughters and sons, we must do it now.

Let me close with the words of the Colombian writer Ángela Becerra.

She once wrote, “To fight for something you first have to believe in it in with great force.”

“Para luchar por algo, primero tienes que creer en ese algo con much fuerza.” [8]

We believe in this effort with great force, because we know that empowering women can truly change the world.

The IMF looks forward to being your partner in this important work throughout the days ahead.

Gracias.