The Covid-19 pandemic has constituted a major setback to achieving the targets of the UN’s fifth Sustainable Development Goal (SDG): gender equality and empowering all women and girls by 2030.
Indeed, the UN’s website states: “The goal is probably even more distant than before, since women and girls are being hit hard by the Covid-19 pandemic. The crisis is creating circumstances that have already contributed to a surge in reports of violence against women and girls, and may increase child marriage and female genital mutilation.
“Moreover, women are more likely to take on additional care work owing to the closure of schools and day-care centres. They are also on the frontlines in fighting the virus, since women account for nearly 70% of health and social workers globally.”
Müge Dolun, gender coordinator at the gender equality and empowerment of women office of the UN’s Industrial Development Organisation, believes that improvements have been made in reducing the gender gap and expanding female participation in the labour force, and more specifically in the manufacturing sector, within the developing world. However, she fears this will likely be reversed if no action is taken to manage global supply chains in a more responsible way, and take into account the people that lost their jobs as a result of the pandemic.
However, it is not only the rate of female participation in the manufacturing sector that raises concerns. An analysis by Investment Monitor shows that female participation rates have fallen across the entire labour force worldwide.
On top of that, a McKinsey report says that women’s jobs are 1.8 times more vulnerable to the crisis caused by Covid-19 than those held by men. It also reveals that women account for 39% of global employment, but have suffered 54% of overall job losses since the pandemic started.
The report states: “One reason for this greater effect on women is that the virus is significantly increasing the burden of unpaid care, which is disproportionately carried by women. This, among other factors, means that women’s employment is dropping faster than average, even accounting for the fact that women and men work in different sectors.”
Investing in gender equality is imperative for economic growth. The multinationals can have a positive influence on local productivity and local job prospects.
Amelia Lopez Huix, MOH International
Clearly the fact that women’s employment levels are dropping faster than the average will negatively affect the UN’s gender equality and female empowerment targets, which make up SDG5.
The Gender Empowerment Risk Index 2020, created by Investment Monitor with scores based on the Global Gender Gap report, the percentage of women in management, primary girls in education and women in salaried work, finds that developing counties, and more specifically Middle East and Africa along with South Asia, are among the regions facing the most challenges in regard to this gender equality.
Can FDI promote gender equality?
Amelia Lopez Huix, a corporate partner at MOH International, which specialises in gender economic governance in business strategies and operations, believes that foreign direct investment (FDI) is vitally important for gender equality and it is crucial for multinational enterprises to transfer best-practice policies towards female employees.
“Investing in gender equality is imperative for economic growth,” she says. “Multinationals can have a positive influence on local productivity and local job prospects. Increased labour productivity, more opportunities for female labour participation, along with better prospects for economic growth, can result in less poverty and more female empowerment.
“However, it is significant that multinationals keep on being a channel of transmission of new technologies and best practices. Thus, there is a higher need for education and training programmes, especially for women, so they can gain technical skills and adapt to changing work environments.”
An analysis carried out by Investment Monitor shows that regions that score poorly in the Gender Empowerment Index also struggle to balance gender and FDI. The analysis, which is based on the Gender Development Index versus FDI projects per capita, highlights that the countries facing the greatest gender equality struggles are based in the Middle East and North Africa and Asia, with Afghanistan, Niger, Pakistan, Chad and Iraq among the countries that score the lowest.
However, at a time when FDI is declining as a result of the Covid-19 pandemic, the effects are more likely to hit developing countries, and especially those that already needed more assistance in terms of promoting gender balance.
In fact, FDI dropped 49% in the first half of 2020 compared with the first six months of 2019, according to a trends monitor published by the UN Conference on Trade and Development. Meanwhile, the Global Investment Trends Monitor shows that FDI flows were 28% lower in Africa and 31% lower in south Asia over the same period.
This drop in FDI and other impacts arising from the pandemic are affecting the progress of SDG5. Nevertheless, FDI remains an important tool for boosting women’s welfare, gender equality and their financial inclusion (which comes about as a result of the new jobs created through FDI projects). This happens when women are given more access to both skilled and unskilled jobs, which improves female participation in the labour force, especially in the formal sector, and supports their empowerment.
This is the fourth in Investment Monitor‘s SDG Focus series. The other articles can be found here:
Senior editor and researcher
Sofia Karadima is a senior editor and researcher at Investment Monitor, focusing on financial and business services, and ESG investing.