Keynote address at Second Annual Hansa Mehta Memorial Dialogue: Inclusive and gender sensitive recovery from the pandemic: the role of trade

Excellencies, ladies and gentlemen,

It is an immense honour for me to be part of this second edition of the Dr Hansa Mehta Memorial Dialogue. My thanks go to Ambassador TS Tirumurti and his team at India's Permanent Mission to the United Nations in New York.

Women everywhere owe a debt to Dr Mehta. The Universal Declaration of Human Rights is the global community's most foundational expression of our basic rights and fundamental freedoms. And yet - – perhaps reflecting the male UN officials who had been providing drafting support - an earlier version of the text opened "All men are created equal."

Fortunately for the half of humanity that would have been excluded by this phrasing, Dr Mehta was on India's delegation to the UN body where the declaration was being drafted in 1947-48. And she successfully secured the change that gave us Article 1's iconic opening: "All human beings are born free and equal in dignity and rights." These words resound in the context of the tragedy unfolding before us today in Ukraine with women and children being so profoundly adversely impacted. May peace prevail, is our prayer.

Dr Mehta was a freedom fighter, an educationist, an author and translator, an elected public official, and, above all, a staunch advocate for women's rights and equality in India and abroad. She was one of 15 women in the assembly that drafted independent India's constitution, which enshrines gender equality and directs the state to take specific action in favour of women. She later served as vice chair of the UN Human Rights Commission, as a member of UNESCO's executive board, and as Vice-Chancellor of Baroda University.

For all the progress made in the 74 years since the Universal Declaration of Human Rights was adopted, however, women still face considerable obstacles to equality, in India and around the world. Only 57 out of 193 nations that are members of the UN have ever had a woman hold the highest political office with executive power (be it president or prime minister). In business the situation is the same, in December 2021, women CEOs made up only 8.1% of Fortune 500 companies (41 out of 500). In big data and artificial intelligence, women are an estimated 26% of the workforce, in engineering just 15% and in cloud computing a mere 12%.

According to the International Labour Organization, only 43% of the world’s working-age women were employed in 2021, compared to 69% of working-age men. After looking at laws in 190 economies, the World Bank concluded that on average, women have just three-quarters of the legal rights afforded to men. In 86 countries, women face some form of restriction on the kinds of jobs they can do; 95 countries do not guarantee equal pay for equal work. And the pay gap is visible in all sectors. Even in sports, in 2020 there was only 1 woman on the list of the one hundred highest paid athletes in the world, that was Serena Williams and even she came in at number 63.

The COVID-19 pandemic has exacerbated many of these inequalities, at work and in the home. The ILO estimates that between 2019 and 2020, women’s employment declined by 4.2%, while men’s employment declined by 3%. A new article in Lancet, based on data from around the world, found that as of September 2021, women or girls were 2.4 times likelier than men or boys to have foregone paid work to care for others, 21% likelier to have dropped out of school, and 23% likelier to have reported an increase in gender-based violence.

It also appears that the pandemic has dealt women significant setbacks in global trade – though the data here is full of gaps, a point I will come back to.

In my remarks today, I will focus on the economic dimensions of gender equality. I will make the case that international trade is already an instrument for narrowing gender gaps, but that we can do much more to use it to expand opportunities for women and give them more control over their own destinies. In doing so, we can bolster recovery from the pandemic while making growth more inclusive.

The mechanism is straightforward: when women engage in paid work, it can be transformative for families and entire societies. And trade is a vehicle for creating more – and better - jobs for women. Women account for 80% of workers in the textile industry, and over half in tourism, to look at two heavily traded sectors. Research by the WTO and the World Bank shows that women working in export sectors earn more than in non-export sectors, and are more likely to have formal jobs and the protections that come with that.

In addition to being morally wrong, gender discrimination is also an important economic issue, because of the damage it causes to individual and family aspirations as well as to national economic prospects.

Both within families and in the wider society, participating in paid work enhances respect for women and their well-being – a point Nobel economics laureate Amartya Sen has emphasised for decades. Women's hard work within the home often goes ignored, he notes, but when they work outside the home, "it tends to have a powerful impact on enhancing women's standing and voice in decision-making within the household and more broadly in society." Contributions to family prosperity become more tangible, and their social status improves.

In overall terms, the macroeconomic cost of gender inequality is staggering. According to the IMF, closing the gender gap could raise GDP by as much as 35% in many developing countries, with higher labour force participation driving four-fifths of the increase, and the remainder coming from productivity gains spurred by greater gender diversity. At the global level, McKinsey estimated in 2015 that if women played a fully equal role to men in the labour market, world economic output could increase by as much as $28 trillion per year by the mid-2020s. A more modest scenario, in which countries would match the rate of progress towards equality of the fastest-improving country in their region, would expand global output by $12 trillion.

Back then, I had trouble getting to grips with figures that big. But the economic cost of the COVID-19 pandemic has made such numbers more familiar to all of us. In October 2020, the IMF's then-chief economist and now First Deputy Managing Director Gita Gopinath, who delivered this lecture last year, estimated that the cumulative loss imposed by COVID-19 on global economic output would reach $28 trillion by 2025, relative to the pre-pandemic trend. One estimate puts the cost of the fiscal and monetary policy response necessitated by the pandemic at roughly $26 trillion, as of last autumn. These are figures similar to the one quote above and put such large numbers in context.

The post-COVID economic rebound is still uneven and fragile. Output and trade performance have been significantly weaker in the many emerging markets and developing economies with limited fiscal capacity and vaccine access. And the recovery remains vulnerable to new viral variants as well as food and energy price shocks emanating from the war in Ukraine.

As countries around the world seek to strengthen and accelerate the recovery, while repairing fiscal balance sheets and managing inflationary pressures, doing more to empower women in the economy, and in global trade, is a no-brainer. It would help boost growth, purchasing power, and supply capacity.

We have considerable room to improve.

Women own and manage about a third of established businesses worldwide, according to the Global Entrepreneurship Monitor, a regular report produced by a global consortium of university researchers.

The businesses women run tend to be much smaller than those run by men. Women entrepreneurs are one-and-a-half times likelier than men to be sole operators, without any employees. Women are two-thirds less likely to own or manage companies with 20 or more employees.

Smaller size means that the fixed costs associated with trade – understanding market dynamics, finding potential partners, navigating customs procedures, and so on – weigh disproportionately on women-owned businesses.

Women entrepreneurs are likelier than their male counterparts to focus on local markets, rather than national sales, let alone international ones. There are some interesting exceptions here: in India, women entrepreneurs are 3.3 times more likely to report an international market focus compared to male entrepreneurs.

Nevertheless, in 2020, the global rate of internationalization was almost twice as high for men entrepreneurs, at 9%, compared to women entrepreneurs, at 5%.

Between 2019 and 2020, the pandemic expanded the internationalization gender gap by 30%. This was in part due to women's overrepresentation in face-to-face services sectors such as food, tourism and retail, among the most heavily affected by the pandemic. On the positive side of things, surveys suggest that many women entrepreneurs saw new business opportunities arising from the pandemic, notably by moving online. Many of us have seen women-owned textile businesses pivot to making masks and protective gear. That said, World Bank Reports that women were more likely than men to report business closures in the sectors most impacted by shutdowns. And, as we have seen, more women than men dropped out of the labour force altogether.

To make the post-COVID economic recovery more inclusive, we need to end the ongoing marginalisation in the global economy for women-owned businesses, particularly small and medium-sized ones.

The disruptions to global supply chains resulting from the pandemic offer an opportunity here. With more companies seeking to diversify their supply chains to reduce risks and enhance resilience, there is an opportunity for poor countries to follow in the footsteps of places like Vietnam, Bangladesh, and Ethiopia and attract investment in labour-intensive manufacturing, services, and agriculture value chains. Empowering women and women-owned businesses to tap into this process, which I like to call 're-globalization', would foster inclusion along two axes: by bringing marginalized countries as well as marginalized communities into the economic mainstream.

So what can we do in practice? I would divide the actions we can take into two related buckets: The first deals with reducing trade costs for businesses of all sizes, which would yield proportionately larger benefits for the smaller companies women tend to run. And the second deals with targeted policies to benefit women and the businesses they own.

I am proud to say the WTO is acting on both fronts.

On the first, one of the WTO's core functions is to make trade costs low and predictable. The Secretariat is supporting members to implement the trade facilitation agreement, which should further lower border-related delays and expenses for businesses.

In December, 67 WTO members struck an agreement setting out shared parameters for domestic regulation in the services sector. By simplifying requirements and making them more predictable, it will save cross-border services providers around the world an estimated $150 billion annually, according to WTO and OECD research. The services domestic regulation agreement includes a gender equality provision prohibiting discrimination in authorization procedures for service suppliers. India is not part of the agreement, but Indian service providers – including female ones – will be able to share in its benefits, since parties will apply the rules on an MFN basis.

While the pandemic has pushed all of us to do more online, the absence of global rules for digital trade entails unpredictability that is easier for big companies to navigate. 86 members are negotiating basic rules on e-commerce, which should help create a more predictable playing field for the digital economy. Here, too, members are considering gender-specific provisions.

This brings me to the second set of issues, namely targeted efforts to support women in global trade.

On the supply side, the WTO supports organizations like the International Trade Centre, the Enhanced Integrated Framework, and the Standards and Trade Development Facility, which work with directly with women-owned businesses in developing countries to help them overcome barriers keeping them out of international markets. Targeted interventions, like helping mango growers in Mali or shea butter producers in Nigeria meet international quality standards, can catalyse virtuous circles of international sales, higher earnings, more investment, increased scale, and greater value addition. We hope to scale such efforts up in the future.

On the policy side, over the past five years, a group of about three-quarters of WTO members have been working to make the multilateral trading system more gender-sensitive. In a ground-breaking declaration in Buenos Aires in 2017, they pledged to shine a spotlight on barriers facing women, from unequal access to trade financing to sub-optimal participation in public procurement markets. This led to the creation, in 2020, of an Informal Working Group on Trade and Gender, in which members have been looking at experiences that could inform future policies and rule-making aimed at increasing women's participation in global trade.

The Working Group has developed a Joint Ministerial Declaration on Trade and Gender Equality, slated to be adopted at the 12th WTO Ministerial Conference in June, under which they would pledge to pursue gender equality in trade policy and aid for trade. It would also commit them to collect more gender-disaggregated data, the lack of which currently makes it hard to identify where trade-related problems lie. Without the right data, policies can miss key targets, as we saw with pandemic-related support packages that inadvertently excluded a large share of women entrepreneurs by focusing on formally banked businesses.

While the road ahead is long, governments have been moving forward, increasingly integrating gender considerations into trade policies and trade agreements. They have enhanced women's access to finance, public procurement markets, and training, while working to improve working conditions in export sectors.

I often say that the future of trade is digital, services, and green. But to contribute fully to building more equitable and prosperous societies, women must be front and centre in all these areas.

In closing, let me speculate that Dr Mehta might have been surprised by my focus today on trade. After all, in line with the tactics of India's freedom struggle, she had courted arrest while picketing shops that sold imported clothing. But while she might have had doubts about the means, I am absolutely convinced she would have been in agreement about the ends – namely, women's empowerment and equality.

Thank you.