Promote inclusiveness

Much has been written and discussed about how COVID-19 has changed the world and how new approaches need to be evolved to lift the economy out of its current doldrums. New evolutions in working from home, encouraging flexible work hours and tapping into new economic opportunities could also be directed at increasing the amount of women in the formal workforce.  

In Sri Lanka, female participation in the formal labour force at 35% is significantly lower than for men. Unemployment rates are also significantly higher for women. There is also a large gender gap in the share of women who are unpaid family workers, who account for 20.4% of women compared to 3% of men. By using technology and changing economic trends to support more women not only could there be more growth but also inclusiveness. 

Key measures include labour law reforms to support flexible work arrangements such as part-time work, telework, working from home, and entrepreneurship, which have been encouraged through COVID-19.  Additional steps such as effective gender budgeting to actively target gender equality, with a focus on vocational training, safe transportation, and child care support, could also encourage more women to become financially independent. 

Greater financial inclusion through access to microfinance institutions and formal financial institutions to promote entrepreneurship among women are other measures. Enhancing female labour force participation is estimated to boost incomes significantly. 

SMEs contribute about 45% of Sri Lanka’s gross domestic product and provide about half of the country’s jobs. Yet, among SMEs, only 25% of entrepreneurs are women. Their lower capacity contributes to a $ 350 million gender credit gap, according to the ADB. Capitalising on entrepreneurship to economically empower women and generate inclusive growth in Sri Lanka will require reducing various bottlenecks, especially access to finance.

Women face additional hurdles—gender-related and costly—outside the investment environment. So far, much has been spent on advocating women’s access to finance (with emphasis on microfinance), building capacity for entrepreneurship, and organising and strengthening women’s business associations. These activities are necessary and useful, but reducing the barriers for all investors to open, operate and close firms, and addressing social norms and gender-based differential treatment under the law is also essential.

Levelling the playing field requires building an environment for these skilled women to create their own opportunities. This means addressing social norms about working women and promoting an environment where women can balance work and family. If men can also work from home due to COVID-19 then changing gender norms may become easier.  

Mentoring is another aspect that needs desperate attention. Indebtedness created in some parts of Sri Lanka, particularly in the north, is largely due to female entrepreneurs being lured into making bad financial decisions in limited ventures. For example, handing out sewing machines and chickens would provide little assistance unless they have market access, capital, skills and a way to understand how to run their businesses and expand. In fact, in studies done on successful female entrepreneurs, mentorship has been ranked above capital in importance and often makes the difference between a sustainable model and a pipe dream. COVID-19 could be seen as a fresh chance to focus on these goals.