Isobel Coleman

Democracy in Development

Coleman maps the intersections between political reform, economic growth, and U.S. policy in the developing world.

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Business Development for Democracy

by Isobel Coleman
June 30, 2011


A woman looks at clothes at a stall during the 2nd Asian Women Entrepreneurs Eid Festival 2005 in Dhaka, Bangladesh, December 10, 2005 (Rafiquar Rahman/Courtesy Reuters).

The role of a vibrant business community in promoting both economic development and durable democracy is widely acknowledged. But it is less clear how to foster a private sector that can serve as an engine of growth and participate constructively in the democratic process. The Center for International Private Enterprise (CIPE) works on just this question. One of the four “core grantees” of the National Endowment for Democracy, CIPE aims “to strengthen democracy around the globe through private enterprise and market-oriented reform.” The organization helps business associations and other private actors in developing countries with such challenges as improving laws and regulations, bolstering corporate governance, boosting entrepreneurship, and combating corruption. In addition, CIPE works to educate government officials, businesspeople, the media, and the public about “the freedoms, rights, and responsibilities essential to market-oriented democracies.”

Last week my colleague Gayle Tzemach Lemmon, deputy director of CFR’s Women and Foreign Policy Program, spoke at a conference hosted by CIPE in Washington. Here is Gayle’s readout of the conference and the trends in women’s entrepreneurship, a subject that is also the focus of her book, The Dressmaker of Khair Khana.

When it comes to entrepreneurship and the power of economics to change lives, women face both promising opportunities and daunting barriers. Both were in focus at a conference hosted last week by the Center for International Private Enterprise entitled, Democracy that Delivers for Women.

Women’s economic strength is on the rise and their political power, while still small in terms of numbers, is trending higher.

But as Ambassador at Large for Global Women’s Affairs Melanne Verveer noted at the conference, “women are half of the population yet hold one-fifth of the positions in national governments. They are significantly outnumbered in the chambers of parliaments, provincial councils, and more often than not missing from the negotiating tables where conflicts are to be resolved. All too often decisions that affect women, their families, and societies are made without women having a voice.”

Somehow, women have managed to be both half the population and a special interest group. Women are fighting to reverse this reality, often using economics as the way in to change their children’s lives and their communities’ fortunes.

Women entrepreneurs across the globe are stepping up and starting businesses to help support their families. And they are earning respect while they earn an income. Often women start small, but they grow their businesses organically and employ men and women in the process.

I appeared on a panel at the CIPE event with Selima Ahmad, head of the Bangladesh Women Chamber of Commerce and Industry, who noted that women are banding together to form associations to advocate for better business practices. Often women find safety in numbers when trying to overcome the myriad obstacles before them. Chief among these challenges are access to markets, access to finance, and access to business networks.

Associations help women organize to become stronger advocates for a better business environment. It may be easy to ignore one or two businesswomen, according to Ahmad, but large numbers are harder to dismiss. Often women advocate for a more responsive and transparent government that meets both their business needs and their political demands.

The progress women entrepreneurs have made is real and, as Verveer noted, we are “witnessing a dramatic change in the role women are playing in the global economy.” Yet along with all the “access” challenges mentioned above, which also confront men, women face challenges that are unique.

First, they are regularly found in the informal sector. And when they don’t pay taxes and aren’t registered, they are often easier prey for corruption and other problems from local officials. Also, since informal business owners do not pay taxes, they receive less of a voice in their government.

Secondly, because women often do not have land registered in their own name–in some cases this is legally prohibited–they face the challenge of collateral when it comes to winning bank backing for their business. Loan guarantee programs can help to address this issue, but they are still few and far between in most places.

And finally, we continue to think small and low-dollar when it comes to women. Microfinance is a powerful anti-poverty tool, but we have begun to confuse a solution with the solution. Women can do more than micro. They are already doing much more, even in very tough parts of the world, where women-owned small and medium-sized businesses rarely receive attention, but often support many and create jobs for many more. It is time the programs and the attention caught up and helped women expand their small and growing enterprises, so that they can in turn help others and serve as role models for the next generation, as many already are.

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