LAC Women Covid 19 | Alliance for eTrade

High time to close the gender gap: A call to action for Latin American and Caribbean policymakers

Kati Suominen, Founder and CEO, Nextrade Group and Technical Director of the Alliance for eTrade Development, Barbara Kotschwar, Executive Director of Visa’s Economic Empowerment Institute, Erica Libertelli, Executive Director of the eCommerce Institute, Maria Luisa Boyce, Vice President, UPS Global Public Affairs, and Erica Vambell, Senior Associate, Nextrade Group

The COVID-19 pandemic has hit women particularly hard, deepening gender disparities worldwide. The purpose of this paper is to explore the effects of the pandemic on women in the Latin American and Caribbean region specifically (LAC), where women have experienced a dramatic reversal in the past decade’s growth in female labor participation. Women’s unemployment rate is now at 22% in the region.

There are several reasons for the pandemic's heavy toll on women, including:

New household responsibilities for women such as taking care of children and the elderly, have deviated their focus from their careers and businesses. Even before the crisis, women in LAC did more than three-quarters of societies’ unpaid care work.

Women are disproportionately represented in sectors that were hardest hit by the pandemic:

Around the world, women make up majorities of services workers and retail workers, sectors undermined by the crisis. In the LAC region, almost 40% of working women are employed in sectors most affected by the crisis.

In LAC, about 11% of working women are employed as domestic workers. In the second quarter of 2020, employment levels in paid domestic work fell by significant double digits across the region.

Women workers and business owners in sectors impacted by the demand and supply shocks resulting from Covid, such as electronics and automotive sectors, experienced churn and cash flow challenges.

In sectors that boomed in the crisis, such as healthcare, women are underpaid compared to their male peers.

Women represent 54% of workers in the informal sector in LAC, where they lack protection from labor laws and receive no social benefits.

Women-owned businesses are already more vulnerable, and in LAC, women-led SMEs were 11% more likely to close in the face of the crisis than firms led by men.

Disparities in access to finance may make it harder for women and women-led firms to get back on their feet. The vast majority of venture capital is still invested in men-run businesses.

Closing these disparities requires urgent attention from governments. Particularly needed are policies and programs to empower women to gain equal opportunities to employment and career advancement, and enable women to start their own businesses, thrive in the digitizing regional economy, engage in trade, and build and manage wealth.

This paper proposes five strategies that governments can adopt to address the severe gender gaps and support women’s economic empowerment in LAC:

Accelerate labor market reforms that target gender disparities and promote women’s participation in the labor market and in full-time employment, for example through flexible remote work and childcare for women to better manage their time, and through actively promoting gender parity in businesses’ leadership positions and boards.

Invest in women’s and women-led firms’ digital skills and ecommerce-readiness, for women to thrive in the increasingly digitized regional and global economies, by promoting women’s access to the Internet and devices; training programs and mentorship for running a digital business; use of digital payments and cross-border logistics; and funding for digital transformation of their firms.

Promote women-led firms’ access to markets and an open international digital trading system by keeping domestic and foreign markets open for the free cross-border flow of goods, services, content, and data as an essential pillar in LAC governments' pro-women and pro-small business economic agenda.

Provide financing to women-led businesses to quickly get off the ground and get back on their feet, such as via low-cost loans loan guarantees, tax breaks, and innovative Fintech-enabled lending and crowdfunding, involving all parts of the financial system such as: commercial banks, microfinance institutions, digital lending platforms, and supply chain financing entities, as well as government funds.

Empower women as leaders in national governments and regional bodies, as women leaders are inherently attuned to gender issues and challenges facing women in labor markets and businesses.

Public-private partnerships too are critical for promoting these aims. The Alliance prepared this document as an example of a public-private partnership aimed to empower women-led firms, by promoting small emerging market firms’ ecommerce and trade.

Latin American and Caribbean governments have an imperative to bridge gender disparities that have tragically widened as a result of COVID-19. There are already many good examples in the region on how to promote women in labor markets and business. LAC governments today have an opportunity to turn the crisis into an opportunity: use the pandemic as a catalyst for reforms to close LAC’s gender gaps once and for all.

The authors' views do not necessarily reflect the views of the United States Agency for International Development or the United States Government or any of the eTrade Alliance members.