UNCDF: Enabling Transformation – Investing in the Local Needs of Women

Copyright: Mauricio Mireles / MDG-F / Sustainable Development Goals Fund

In 1990, in the first Human Development Report of the United Nations Development Programme (UNDP), Pakistani economist Mahbub Ul Haq wrote, “The real wealth of a nation is its people. And the purpose of development is to create an enabling environment for people to enjoy long, healthy, and creative lives. This simple but powerful truth is too often forgotten in the pursuit of material and financial wealth.” 

Mr Ul Haq’s words eloquently speak to a paradigm shift that has taken place in the field of development. This new orientation called the Human Development and Capabilities Approach, saw development as a process of expanding the real freedoms and rights that people enjoy.

Based on the premise that expanding economic growth alone is an inadequate measure for development or quality of life, the new model puts people and their opportunities to actualize their capabilities as its central focus. Unlike other previous paradigms, the Human Development and Capabilities Approach is concerned with bridging inequalities and addressing uneven distributions among different groups.

“Taking into consideration the fact that the majority of the world’s poor are women, it is imperative that development strategies and interventions are targeted towards the needs and priorities of this group.”

Amongst these vulnerable groups, women are especially affected. For many years the predominant development policy was to boost economic growth in order to aid the poor. However, limited recognition of the synergies between the freedom and capabilities of people, gender equality, economic growth and poverty reduction led to the development of policies that failed to take into consideration the differentiated and specific needs and responsibilities of women and men.

More recent research demonstrates that policies focused on economic growth alone insufficiently reduce poverty or address gender inequalities. Strong evidence shows that enhancing women’s economic participation improves national economies, increases household productivity and living standards, enhances the well-being of children with positive long term impacts, and can increase women’s overall empowerment.

To increase their economic opportunities, women need access to more and better jobs, a business climate that supports them in starting and doing business, a financial sector that gives them access to financial services tailored to their needs, and greater livelihood security in times of food and fuel crises. This is especially true for women living in rural areas and vulnerable environments.

As a consequence, it is now recognized that the impact of growth on reducing poverty and enhancing gender equality in developing countries is correlated with the pro-poor inclusive and equitable public policies in place. Crucially, such policies create an enabling environment that determines how resources are channelled and distributed in the local economy.

Fundamental Shift

Copyright: MDG-F / Sustainable Development Goals Fund

This increased recognition has led to a fundamental shift in the development encompassing policies and interventions that target the needs of the poor. As a result, approaches to development grounded in human rights, which specifically emphasise, inter alia, non-discrimination, equality, participation, and inclusion have gained in prominence, most notably within the UN System.

Taking into consideration the fact that the majority of the world’s poor are women, it is imperative that development strategies and interventions are targeted towards the needs and priorities of this group. Without such efforts, countries are unlikely to sustain any progress towards achieving the Millennium Development Goals (MDGs) set for 2015, or meet the ambitious Sustainable Development Goals (SDGS) in 2030, in the agenda post-2015.

Unfortunately, despite the important recognitions of the synergies between gender equality and poverty reduction, implementation of such policies has been uneven. The reasons for this range from cultural norms, lack of political representation, inadequate education, and severely unequal access to basic infrastructure and financial institutions.

In response, a forthcoming local development programme at UNCDF will aim to focus on the latter dimensions in the Least Developed Countries (LDCs). It is designed to identify and eliminate barriers to women’s economic participation at the local level and enable their way to economic emancipation.

By making use of innovative financing tools and well-established investment instruments, the United Nations Capital Development Fund (UNCDF) offers a unique combination of investment capital, capacity building and technical advisory services to promote Local Development Finance (LDF) and inclusive finance in the LDCs, with the overarching objective of accelerating poverty reduction through sustainable, inclusive and equitable local development.

The LD approach of UNCDF is about designing and testing mechanisms that mobilise, allocate, and invest resources for local development in an accountable and equitable manner.

Economic Growth Alone not Sufficient

Copyright: MDG-F / Sustainable Development Goals Fund

The method recognises that economic growth is not sufficient to transform the economies and societies of poor countries and make them more resilient to shocks. It is put to work to integrate relevant development strategies to ensure that infrastructure and service delivery reach the entire population and provide employment to people who need it most, poor women and men.

In particular, UNCDF’s women’s economic empowerment programme, in partnership with UNDP and other UN Entities and through UNCDF’s financing tools will aim to create an enabling environment by responding to local barriers and bottlenecks that hinder women’s access to local economic opportunities and income-generating activities.

This programme begins its work based on its Local Economic Assessment tool (LEA), a methodology that allows a better understanding of the contextual situation on the ground, the state of the economy, the needs of the labour markets – formal and informal alike – the development partners already working on these issues, as well as a thorough cultural, and social behavioural understanding of the local population. The methodology for this analysis takes place in consultation with the communities involved and takes into consideration the differentiated needs and responsibilities of women and men.

Once these barriers have been identified and deemed possible to address, financially and physically, UNCDF puts its financing tools at work to tackle these bottlenecks to women’s economic empowerment.

For example, inadequate roads, poor transportation routes to markets, a lack of entitlements to agricultural land, restricted access to financial services, and an inability to use productive inputs such as fertilizers, seeds, and crops can all result in major obstacles to women’s economic activity, entrepreneurship, and empowerment.

In cases such as the above, the gender-focused programme identifies the most pressing interventions necessary to lessen the burden on women and tackle the legal, social and economic barriers preventing women from equally accessing basic local services and increase women’s local economic opportunities, including empowering female entrepreneurs in the development of their Small and Medium Enterprises (SMEs).

Hydro Power

Distribution of Drinking Water Collection by Percentage in Africa.
(Source: WHO/UNICEF 2008)

Currently, in the Iringa Region of Tanzania, UNCDF is supporting female entrepreneurs introduce a small hydro power to generate electricity in the rural areas of Tanzania, thus, potentially granting approximately one million dollar in domestic financing from a local bank to the project. The project is expected to close by the end of 2014, thereby generating 317 kW of hydro power for rural electrification which will be instrumental in expanding further opportunities for small scale enterprise development and jobs creation.

In addition to entrepreneurial support, UNCDF’s women’s economic empowerment programme tackles other difficulties that women frequently face. Women are often confronted with challenging decisions in their daily lives. When they spend the majority of their time in unpaid care work activities, such as cleaning, cooking, collecting wood, fetching water, and caring for the children and the elderly, it limits their opportunities to participate in the labour force or to engage in other economic activities. It also constrains schooling and participating in decision making processes.

Yet unpaid care work remains a largely unseen dimension of human well-being, in that it is not counted in gross domestic product (GDP). As a result, unpaid care is not recognized in economic planning, budgeting, and investment decision making. However, recognizing unpaid care work will not produce tangible benefits if it does not also result in interventions to reduce the burdens on women that are created by the way in which their work is distributed within their communities and households.

In this context, by examining time use surveys and socio-economic assessments of localities, UNCDF’s programme on gender economic empowerment, will aim to narrow the unique bottlenecks facing women by identifying capital investments that can reduce women’s unpaid care work activities.

From 1990 to 2010, more than 2 billion people gained access to safe drinking water, but 780 million people are still without clean drinking water. Where water supplies are not readily accessible, water must be carried from its source. According to 2006–2009 data from 25 sub-Saharan African countries, women there spend at least 16 million hours each day to collect water. Men spend 6 million hours, and children 4 million hours. 

If women spend four hours a day fetching water, investing in infrastructure projects that provide access to water will save women considerable time, which can then be used to engage in economic activities.

The way in which unpaid care work is distributed between women and men can be argued to be one of the most pressing constraints inhibiting the achievement of women’s socio-economic empowerment in the LDCs. Much can also be said about policies pursued in the context of ideological models that fail to respond to the needs and priorities of women.

This programme works to enable women to participate in the labour market, if they choose to do so. As development practitioners, we have to be mindful of the complex system of development, the cause and effects, and lack of linearity of our actions on the ground.

Within a unique local context, this project – using its local finance development instruments – attempts to create an enabling environment for women to enjoy long, healthy and creative lives, as Mr UI Haq suggested in 1990, and as it continues to dominate the development discourse today.

About UNCDF

UNCDF is the UN’s capital investment agency for the world’s 48 least developed countries. It creates new opportunities for poor people and their small businesses by increasing access to microfinance and investment capital. UNCDF focuses on Africa and the poorest countries of Asia, with a special commitment to countries emerging from conflict or crisis. It provides seed capital – grants and loans – and technical support to help microfinance institutions reach more poor households and small businesses, and local governments finance the capital investments – water systems, feeder roads, schools, irrigation schemes – that will improve poor peoples’ lives. UNCDF programmes help to empower women, and are designed to catalyze larger capital flows from the private sector, national governments and development partners, for maximum impact toward the Millennium Development Goals. For more information, please visit www.uncdf.org and subscribe for news, follow @UNCDF on Twitter and UN Capital Development Fund on Facebook.