Keynote Remarks of Preeti Sinha at the Increasing Domestic Public Resources and Private Financing for Women’s Economic Empowerment

  • April 21, 2021

  • New York, United States

As Prepared for Delivery

“Distinguished Panelists,

Ladies and Gentlemen,

On behalf of the UN Flagship Agency for LDC finance, I want to start by thanking the governments of Sweden, Switzerland and Norway for supporting our priorities and programmes on women’s economic empowerment.

I feel especially privileged and humbled to join UNCDF—at a time when multilateral organizations like the United Nations are necessary to helping countries deal with a multitude of global health, economic, climate, environmental and inequality crises.

And, of course, the pursuit of women’s economic empowerment generally and in the LDCs in particular, ranks at the top of the list of development priorities.

From the UNCDF standpoint, we deploy a comprehensive approach to advance equality for all women, especially for the most disadvantaged women and female-led businesses in the least developed regions of Africa, Asia and the Pacific.

UNCDF specifically focuses on expanding local fiscal space for gender responsive economic development, increasing access to capital for women enterprises, and access to digital and financial services for all women.

The fundamental reality underlying today’s event is that women’s full access to the labour market, and for that matter their participation in entrepreneurship, is often restricted in the LDCs.

And even when women are included in the workforce, their full and productive economic engagement is constrained by segmented labour markets that reflect women’s roles as providers of unpaid care and domestic work.

More to the point, there are, of course, structural factors impeding women’s access to opportunity, capital and entrepreneurship: Severe restrictions on access to land; Lack of gender-responsive infrastructure that enables women to reduce the burden of care work while maintaining their well-being; Reduced access to basic services such as education, healthcare, water and sanitation, and financing; And social norms that restrict women from full participation in economic activity and decision-making, as well as their ability to grow and scale their businesses.

The reality is that local governments in the LDCs play a necessary role in economic development, yet their ability to serve the local communities, including and notably women, is often hampered by a lack of resources. Transfers and grants from the central government, as opposed to own-source revenues, are the largest source of local government funding in most countries; representing 60% of their revenue in low-income countries compared to 46% in high-income countries. Of the limited and insufficient resources that local governments in LDCs receive from central governments, a very small proportion is actually spent on programs or interventions that reduce gender inequalities. In Bangladesh, only 3% of the annual development budget for the local government in Upazila is allocated to Women Development Forums – which is a group of elected women representatives at the municipality level responsible for programmes related to gender equality—again, the figure is only 3%.

In addition, women’s representation in decision-making and leadership roles in local institutions is far from adequate. In low-income countries, only 23% of national parliament seats are held by women, and this limited representation is typically reflected in local bodies that are important for economic development policy and planning decisions.

And in the area of finance, despite women’s economic empowerment gaining attention among development partners, the resources available to finance and execute meaningful interventions in this area have continually fallen short, especially for LDCs.

For example, private funds with a gender lens invested in 2019 a total of $4.8 billion and $11bn by the end of 2020, with the majority allocated to the United States and virtually none explicitly targeting LDCs. Recent analysis by the OECD found that in 2018-2019, a mere 5% of bilateral aid was primarily aimed at gender equality and 55% of the ODA did not include such objectives at all. Blended finance transactions by and large have not targeted outcomes for women and girls. Over 60% of the LDC private finance mobilized by blended finance transactions was invested in three major sectors—energy, banking and financial services while social sectors including health, water and sanitation, education, and others including gender equality were among the least targeted areas.

An earlier study by Convergence of 300 deals found the 100 gender-specific transactions were on average smaller than other blended finance deals, with an average size of USD 114 million compared to USD 320 million for the overall blended finance deal size.

Given the investments required to achieve women’s economic empowerment as outlined above, there is ample opportunity for blended finance to support these goals. However, there is more that needs to be unpacked to understand the blended financing field, current players and the underlying mechanisms to make blended financing more effective and targeted to priorities related to women’s economic empowerment, especially in the last mile economies.

Within this context, I am proud to announce that UNCDF is launching our WEE financing tools and investment approach for the LDCs, which were developed as part of the joint initiative--‘Inclusive and Equitable Local development’ or IELD-- implemented together with our partners from UNDP and UN Women.

At the core of this suite of tools is the strategic understanding around the interconnected and complex nature of the political, social and economic systems in which women operate in LDCs. Our work shows that sustaining Women’s Economic Empowerment in the LDCs, in light of these systems and their interconnectedness, requires a holistic approach.

First, we must understand the context and analyse the full ecosystem of structural impediments that women face and then address the key barriers. The gender responsive Local Economic Assessment tool and associated guidance note developed by the three agencies under UN Women’s leadership is an important instrument that will assist local partners to develop evidence based and gender responsive local economic development plans and investment strategies. This will ensure that priorities for women’s economic empowerment are systematically integrated as part of local plans with attached budgets.

Next, we must integrate women’s economic empowerment priorities as part of local investments from the start. Developed under UNCDF leadership, the Women’s Economic Empowerment Index and the guidance note we are launching today is an important tool that integrates gender equality priorities in the local investment agenda and helps local partners identify the most viable investment projects that has maximum impact for women. The Women’s Economic Empowerment Index incorporates indicators for women’s leadership, ownership, safe work environment, unpaid care work among other priorities.

Third, we need institutional capacity at the local level to support women’s economic empowerment. This is why, today, we are also launching the Training Module for the Local Governments on women’s economic empowerment. This tool developed under UNDP’s leadership is an excellent resource for building institutional capacity at the local level on gender responsive local economic development plans, budgets and programmes.

Finally, we need to demonstrate that advancing sustainable development for women and girls in the LDCs will require financing that is larger, more targeted and scaled-up. We also need to share all of the intellectual assets that would support such financing: the learnings, the lessons and the investment approaches themselves. And that is why we are so pleased to launch our paper on WEE financing in LDCs.

This is a novel publication of its kind. Building on the work that UNCDF, UNDP and UN Women have done in the past few years as well as our partners’ experiences, this publication brings together our collective wisdom and learning, our shared approaches and our crucial lessons on how to increase local financing for women’s economic empowerment in the LDCs.

Our WEE financing approach, as presented in this paper, emphasizes that investments, planning, and financing decisions need to be rooted in the local realities. Local authorities and municipalities have an important role in assessing the needs and incorporating gender priorities as part of their annual plans and budgets. Therefore, municipalities need to be at the centre of the economic development agenda in the LDCs.

What we are also learning is that blended finance can serve as an important tool in LDCs, as it has the potential to reduce risk to unlock more commercial streams of capital in underserved markets. More and better targeted blended financing is required in relevant sectors and businesses that are most likely to support WEE. The paper also highlights the importance of local blended financing and the cultivation of new alliances between local governments and private partners to create incentives for investment in sectors, businesses, and projects that explicitly benefit women.

Our WEE financing approaches are equally relevant for increasing investments for a post COVID-19 gender responsive local economic recovery in the LDCs with the devastating impact on the lives of women and girls. Adapted tools including gender responsive local economic assessments for COVID-will be instrumental for developing resilient systems and inclusive recovery plans in developing countries.

I want to emphasize that with the ongoing, historic challenge presented by the COVID-19 pandemic as well as the resulting economic shock, there is critical need to foster resilience for women and girls in the last mile. For those who read this year’s Financing for Sustainable Development Report, you would know that it warns of a lost decade of development—not merely because of the COVID-19 pandemic, but also because of the existing global financial and policy architecture. To the point, supporting women’s economic empowerment at the local level will be a profound step towards reforming this architecture to the benefit of women and girls in the last mile.

In the process, we would go a significant way towards: reducing entrenched poverty and inequality; catalysing systemic change and long-term sustainable economic development in the last mile economies; and staving off the lost decade of development that currently threatens the last mile.

In conclusion, let me emphasize what we need: Stepped up public and private financing for scaling up local WEE initiatives and for a long-term sustainable impact on the lives on women in these economies. Women at the forefront of economic decisions and policies. And concrete actions with attached financing in local development plans for a meaningful impact. Business as usual will not bring the desired impact for millions of women living under the most difficult circumstances.

Once again, distinguished panelists, ladies and gentlemen, thank you.

I look forward to an insightful and impactful panel discussion.