Entrepreneurship Policies through a Gender Lens

Pakistan

By Shumaila Yousafzai, Cardiff University

Shandana Sheikh, Cardiff University

Background

The participation of women in the labour market of Pakistan is below most similar economies (Population Census, 2017). As of 2019, the labour force participation rate of women is 22%, compared to 82% for men (World Bank, 2020). Disparities in labour market participation are attributed to gender inequality, where Pakistan ranks 151 out of 153 countries with respect to gender disparities (Global Gender Gap Report, 2020). Furthermore, only one quarter of women with university degrees work outside the home, reflecting a loss of economic productivity (Asian Development Bank, 2016).

In support of the United Nations Sustainable Development Agenda of 2030, Pakistan has introduced policies to facilitate inclusive economic growth and development, including promoting entrepreneurship and small business ownership as mechanisms to boost women’s economic participation (Asian Development Bank, 2018). The Government of Pakistan, for example, has established the Small and Medium Enterprise Development Agency (SMEDA),1 Women Chamber of Commerce and Industry (WCCI)2 and the Women Development Department (WDD).3 Interventions to support women entrepreneurs’ access to capital include the First Women’s Bank Limited (FWBL) and Pakistan Poverty Alleviation Fund (PPAF).

Article 34 of the 1973 Constitution of Pakistan states that women shall be given full participation in all spheres of life. Beyond national policies and programmes, the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) represents an international commitment to address gender discrimination and ensure women’s social or economic rights. Agreements with international financial institutions and structural adjustments promote investment in human development to facilitate women’s economic participation (UNDP, 2015). The Trade Organisations Ordinance of 2006 required all regional chambers to induct women on to the board of directors and to facilitate the creation of women’s chambers of commerce (Center for International Private Enterprise, 2011).

Despite such interventions, women’s entrepreneurship remains among the lowest in the world. The Global Entrepreneurship Monitor estimates that only 1.7% of women are involved in starting a business or managing one that is less than 42 months old (i.e. total early-stage entrepreneurial activity rate) relative to about 5.5% of men. Overall, Pakistan ranks 49 out of 50 countries (Global Entrepreneurship Monitor, 2020). Further, women in Pakistan are 60% less likely to consider business opportunities compared to male counterparts and only 34% of women perceive themselves as capable of starting a business (Global Entrepreneurship Monitor, 2012). Low self-perceptions of entrepreneurial capability reflect a weak entrepreneurial ecosystem. The Global Entrepreneurship Index (GEI, 2018: pp. 3), for example, ranks Pakistan 120 among 127 economies with respect to the health of the entrepreneurship ecosystem: “The GEI measures both the quality of entrepreneurship and the extent and depth of the supporting entrepreneurial ecosystem.”

Policy issue: Weak regulatory institutions

Hindering the participation of women in the formal economy is a weak institutional ecosystem. Regulatory barriers include discrimination and limited access to financial capital, lack of small business support policies, stringent start-up processes, and the absence of family and social care policies. The normative environment entails a complex interplay of socio-cultural and religious norms that confine women to the home and restrict their participation in commercial activities. Patriarchal norms and values position women as less capable than men.

Gender discrimination begins in early childhood, where girls are often treated as inferior to boys, and deprived of the basic rights to education, nutrition, and access to economic and social activities. Gendered practices discourage women’s mobility and limit interactions with men and boys, reflecting independence as a central tenet in women’s lives (Roomi and Harrison, 2010). Moreover, norms of Purdah (the veil) and Izzat (honour) guide women’s behaviour and choices and define prevailing gender roles in society. Resultantly, women are expected to perform domestic responsibilities, while men are considered to be responsible for providing for the family (Roomi, 2008; Roomi and Parrot, 2010).

Regulatory barriers, norms and cultural traditions are diffused in institutional and constitutional policies, resulting in discriminatory practices that limit women’s engagement in the development and growth of society (Goheer, 2003; Leadership for Environment and Development, 2012). It is a dishonour for men to engage in household or family care, which are viewed as the responsibility of women. The perception of a woman being confined to domestic (unpaid) work, for example, influences maternity, paternity and child care policies. Resultantly, women bear the double jeopardy of home/family care and business responsibilities, wherein priority is given to domestic, unpaid work (Roomi, 2008; Roomi et al., 2018).

The majority of working women are engaged in agriculture, including livestock and dairy farming. On average, women spend 3 to 5 hours per day on livestock related activities, such as cleaning animals and sheds, feeding, collecting fodder, milk processing, manuring, etc. When women engage in entrepreneurial activities, most participate in sectors characterised as crowded and low growth, such as petty food production, beauty and health services, and jewellery making. (Hamdani, 2002). When women are entrepreneurial, their efforts are not recognised due to the invisibility of work confined to space in the home.

In addition to assumed gender roles, norms influence women’s access to resources. For example, women retain 3% of the small and medium business loans advanced by the State Bank of Pakistan (Najam, 2020). Compared to 87% of men, 19% of women have access to microfinance loans. Differences are, in part, due to discriminatory lending practices, perceptions that women are less credit worthy, and women’s limited collateral. Certain banks require guarantor signatures of the woman applicant’s husband or father.

Conclusions and recommendations

Pakistan utilises less than 40% of its human resources, leading to weak economic growth (World Bank, 2019). An increase in women’s labour force and economic participation will increase Pakistan’s GDP by 30% (IMF, 2018). To this end, investment in women’s entrepreneurship is critical. This entails actions to strengthen the entrepreneurial ecosystem, including: increasing awareness about women entrepreneurs; disseminating information about start-up support; and alleviating regulatory and normative constraints that challenge women entrepreneurs. Apart from “one-off” initiatives, there is no coherent policy framework to promote women’s entrepreneurship in Pakistan. Recommendations to increase women’s entrepreneurial activities and to strengthen Pakistan’s social and economic growth follow.

Recommendations for Pakistan

• Create gender-aware entrepreneurial ecosystems. Design and implement policies and programmes to support women entrepreneurs, including less stringent regulatory practices (e.g. start-up registrations) and non-discriminatory financing practices, provisions for child-care support and entrepreneurship education, training and skill-building to enhance self-perceptions among women about entrepreneurship as a viable career choice.

• Establish a conducive normative environment for women entrepreneurs. There remains a need to change mind sets about gender and occupational roles, through increased awareness of the benefits of women working outside the home.

• Celebrate the success of women entrepreneurs. Private and public organisations should work together to celebrate the achievements of women entrepreneurs including through financial support for conferences and avenues for professional development and forums, campaigns to promote a positive image of women entrepreneurs and their contribution, and promotion of Pakistani women entrepreneurs at international, national and regional level through print and digital media.

• Support national networks of women entrepreneurs. This could facilitate exchanges of ideas and lead to collaboration opportunities and enable women entrepreneurs to expand their networks, showcase their achievements to peers, and facilitate access to customers.

References

Asian Development Bank (ADB, 2018), “Strategy 2030. Achieving a Prosperous, Inclusive, Resilient, and Sustainable Asia and the Pacific”, https://www.adb.org/sites/default/files/institutional-document/435391/strategy-2030-main-document.pdf (accessed on 12 June 2020).

Asian Development Bank (ADB) Briefs (2016), “Policy brief on female labour force participation in Pakistan”, https://www.adb.org/sites/default/files/publication/209661/female-labor-force-participation-pakistan.pdf (accessed on 10 June 2020).

Global Entrepreneurship Index (GEDI) (2018), “2018 Global Entrepreneurship Index”, https://thegedi.org/2018-global-entrepreneurship-index (accessed on 10 July 2019).

Global Entrepreneurship Monitor (2020), “Global Entrepreneurship Monitor 2019/2020 Global Report”, https://www.gemconsortium.org/report (accessed on 13 July 2020).

Global Entrepreneurship Monitor (2012), “Economy profile: Pakistan”, https://www.gemconsortium.org/country-profile/95 (accessed on 12 July 2019).

Pakistan Bureau of Statistics (2017), “Population Census 2017,” http://www.pbs.gov.pk/content/population-census (accessed on 9 July 2019).

Roomi, M. A., S. Rehman and C. Henry (2018), “Exploring the normative context for women’s

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Roomi, M. A. and P. Harrison (2010), “Behind the Veil, Women's Capacity Building and Enterprise Development in Pakistan”, International Journal of Gender and Entrepreneurship, Vol. 53, No. 9, pp. 526–572.

Roomi, M.A. and G. Parrott (2008), “Barriers to development and progression of women entrepreneurs in Pakistan”, The Journal of Entrepreneurship, Vol. 17, pp. 59–72.

UNDP (2015), “Work for Human Development, Human Development Report 2015”, New York: UNDP, http://hdr.undp.org/sites/default/files/2015_human_development_report.pdf (accessed on 8 July 2019).

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