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UN ESCAP: Advancing Gender Equality Through FDI

As countries in Asia and the Pacific build back from the COVID-19 pandemic, they have a unique opportunity to empower women and advance gender equality by putting women at the heart of the recovery and response processes. Speeding up progress and meeting the gender equality targets of SDG 5 requires explicitly incorporating gender initiatives into areas where they have traditionally been overlooked. One of these areas is foreign direct investment (FDI) and the role that it can play in host countries in improving gender equality. By Heather Taylor Strauss, UN ESCAP.

The figure below depicts the relationship between FDI and gender. FDI can impact gender in leadership/management, at the “factory level” and through its links to women entrepreneurs and the broader local community in the host economy. The former two are both impacts that happen internally within host country operations of the foreign firm, the latter two happen externally to the operations through contracts and activities in the wider community amongst others. Additionally, women entrepreneurs in home economies of FDI – both as owners and leaders of foreign firms - can act as sources of FDI and impact gender equality in the host economy.

Within each of the categories in the host economy listed above, foreign investors can undertake a number of measures and initiatives to promote gender equality. For instance, in addition to providing equal pay and opportunities to women, they can also provide benefits which are specifically geared towards supporting women, among them including training programmes, childcare facilities, and gender specific equipment. For example, one foreign owned chemical or manufacturing company in Bangladesh provides gender specific protective gear to ensure it fits both its female and male employees. Another foreign owned subsidiary in Bangladesh has set up an internal forum for female staff to address concerns specifically related to gender. In yet another example of a foreign subsidiary operating in Bangladesh, the firm provides gender specific fitness courses to help promote staff well-being.

Investment promotion agencies (IPAs) have an important role to play in increasing the positive impact of FDI on women in their economies because they have a direct line of communication with foreign investors and can influence how they set up shop in host countries.

What can IPAs do?

As a first step they must mainstream gender into their organizational structures. As it stands, only 8 per cent of the IPAs in Asia-Pacific are led by women. For IPAs to make a real difference in encouraging foreign investors to promote gender equality in their investments, they must walk-the-talk!

Second, they should mainstream gender into their investment promotion and facilitation activities. Here are some ideas of how this can be done:

  • identifying investment opportunities that can impact women and promote gender responsive investments;

  • ensuring equal access of men and women to capacity and supplier development programmes;

  • facilitating re- and up-skilling training programmes for women by foreign investors

  • supporting women entrepreneurs in understanding how to reach out and pitch to foreign investors;

  • showcasing women entrepreneurs at national and international investment fairs as well as in road shows for foreign investors;

  • working with finance ministries to develop special incentives to encourage foreign investors to make a contribution to women’s empowerment when investing;

  • developing promotional material and image building activities that are gender inclusive;

  • targeting women owned and led firms as potential foreign investors; and,

  • targeting foreign investors that have a track record of investing in gender equality.

While there are ample ways that gender can be mainstreamed and prioritized into the work of IPAs, few have done so. Why? Mostly because of the lack of data and research into how gender is related to FDI, what foreign investors are doing to promote gender equality in their operations, and on how gender can be mainstreamed into the investment promotion lifecycle and the importance of doing so.

Recognizing this, ESCAP is taking the first steps at gathering more evidence on what foreign firms in Asia are doing to promote gender in their operations. This evidence can be used by IPAs to better tailor the work they do with foreign investors to encourage them to invest in women. Additionally, ESCAP is working with the national IPAs in Bangladesh and Fiji to design and implement concrete initiatives for them to undertake to encourage foreign investors to support gender equality in their countries. This work is being funded through the Canadian-funded ESCAP project on Catalysing Women’s Entrepreneurship.

ESCAP looks forward to informing its member States about these initiatives during our upcoming Committee on Trade, Investment and Business Innovation. Furthermore, we invite all those interested to keep an eye on our events page for the details of a special virtual event we will be hosting on International Women’s Day in March on what foreign investors in Asia are doing to invest in gender equality.

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