Women in the Commonwealth: Trade and Investment

Theo Clarke Excerpts

Wednesday 11th March 2020 Westminster Hall

[Theo Clarke (Stafford) (Con)]

I beg to move,

That this House has considered trade and investment opportunities for women in the Commonwealth.

It is a privilege to serve under your chairmanship, Mr Hosie. I should refer colleagues to my entry in the Register of Members’ Financial Interests, and let them know that I am the acting co-chair of the all-party parliamentary group on trade out of poverty.

As we celebrated International Women’s Day and Commonwealth Day just a few days ago, I felt it was timely to call for this debate on how the UK can promote trade and investment opportunities that empower women across the Commonwealth, especially in anticipation of the upcoming Commonwealth Heads of Government Meeting in Rwanda in June 2020.

Since the first International Women’s Day in 1909, we have seen great social and economic progress in many parts of the world. Across Commonwealth countries, women increasingly drive economic activity and engage in trade and entrepreneurship. According to some estimates, women lead a third of all small and medium-sized enterprises in developing countries. In Kenya, 24% of SMEs are owned by women, while the figure stands at 26% in Rwanda. There is still much work to do, though. The gender gap means that women still face disproportionate barriers to access to trade and markets because of discriminatory attitudes, poor conditions and harassment, as well as unequal access to inputs such as credit and land.

Despite the values and commitments enshrined in the Commonwealth’s charter, which recognises that gender equality and the empowerment of women and girls are essential components of human development, progress towards more equitable inclusion of women in Commonwealth economies has been too slow. Only one in five exporting companies is led by women. Women-led enterprises are concentrated in less dynamic sectors than male-led ones, and few are involved in import and export. In employment, job segregation means that women work in lower paid jobs.

Promoting gender equality is a moral and economic imperative. Helping to tackle the many challenges that women face in the economic sphere can trigger tremendous positive social and economic change. A recent McKinsey Global Institute study found that closing the gender wage and participation gap could add nearly $12 trillion to global GDP by 2025. Astonishingly, that is equivalent to the GDPs of Japan, Germany and the UK combined.

[Laura Farris (Newbury) (Con)]

Will my hon. Friend give way?

[Theo Clarke]

Absolutely.

[Stewart Hosie (in the Chair)]

I call Laura Harris.

[Stewart Hosie (in the Chair)]

I apologise for getting your surname wrong, Ms Farris—it will not happen again. That was a very long intervention; I am sure that they will get slightly shorter. I call Theo Clarke.

[Theo Clarke]

I absolutely agree with my hon. Friend. I was very pleased that our Prime Minister made a commitment to support 12 years of quality education for girls around the world. Later in my speech, I will tackle some of the barriers that women face in developing countries.

Empowering women in the economy and closing gender gaps in the world of work is key to achieving the 2030 agenda for sustainable development and the sustainable development goals, particularly goal 5 on gender equality. The Commonwealth is an especially unique forum that the UK can leverage to further promote gender equality and bolster women’s economic empowerment in developing countries. With 54 countries and more than 2.4 billion people, the Commonwealth offers a more unified and structured network, sharing historical ties, values and language, and allows the UK to amplify its commitment to gender equality.

Commonwealth countries are more likely to trade and invest with each other than with the rest of the world. Collectively, Commonwealth members are less protectionist than other countries. Reduced trade costs and similarities in business, regulatory and administrative systems underpin the “Commonwealth advantage”. According to the International Monetary Fund’s forecasts, nine out of the top 25 fastest-growing economies are members of the Commonwealth, which demonstrates the trade potential of the group.

The UK chocolate industry is worth at least £4 billion each year, yet most cocoa farmers live in abject poverty. A typical farmer, such as those in Ghana and the Ivory Coast, which account for 60% of the world’s cocoa production, earns less than 75p a day. That is well below the World Bank’s extreme poverty line of approximately £1.40 per day. When visiting farmers in west Africa, I was struck to learn that only 25% of women cocoa farmers own their land, and and that on average they work about a third more than men when childcare and domestic chores are taken into account.

[Mark Garnier (Wyre Forest) (Con)]

My hon. Friend makes an interesting point about how we can help people in extreme poverty in those countries. A problem, however, is that if we create new tariffs across the world for things such as cocoa, we may unwittingly allow greater competition against the farmers she describes, inadvertently undercutting their salaries rather than helping them into prosperity through trade.

[Theo Clarke]

My hon. Friend makes an important point. Now that we have left the European Union, we have an opportunity to look at global Britain and our standing in the world. As he says, it is important that we do not undercut farmers in developing countries.

This year, the Fairtrade Foundation launched a campaign called “She Deserves” to achieve living incomes for cocoa farmers in west Africa, particularly women. I was very pleased to see people in Parliament, in Stafford and across Britain supporting Fairtrade fortnight earlier this month.

I will share with colleagues an example of a Fairtrade project that has made a real difference to people’s lives. The ABOCFA co-operative, which I visited last year, is the only organic Fairtrade-certified cocoa co-operative in Ghana. It has a total membership of 924 and produces more than 1,000 megatonnes of raw organic cocoa beans. The co-operative has signed a five-year memorandum of understanding with its current buyer, Tony’s Chocolonely—its products are stocked in British supermarkets—to supply it with Fairtrade-certified raw beans from last year’s season. As a nation of chocolate lovers, particularly in the west midlands, which of course is the home of Cadbury’s, the UK consumes more chocolate per person than any other European country. The UK could play a very powerful role in bringing about change to ensure that those farmers have a dignified life and receive a proper living income.

During the 2018 CHOGM in the UK, Commonwealth countries launched the Commonwealth connectivity agenda for trade and investment, which was a commitment to increase opportunities for women to trade internationally and to break down gender barriers in all sectors. The UK Government should be congratulated on the great work that they have already done on trade and investment and gender equality. I am thinking specifically of the SheTrades Commonwealth initiative, which was announced at CHOGM in 2018. I urge the Government to set out a five-step action plan as part of global Britain to scale up our efforts to promote the economic empowerment of women through trade and investment in the Commonwealth.

First, on female economic empowerment, I urge the Government to increase their investment in the SheTrades Commonwealth initiative. Following the successful UK-Africa investment summit, the Government have already announced £3.5 million of UK aid to support SheTrades, on top of the initial £7 million pledged in 2018 by the then Prime Minister, my right hon. Friend the Member for Maidenhead (Mrs May). I very much welcome the commitment, but the Government should go further to build on success and should increase their commitment. SheTrades has shown how investing in women has a clear multiplier effect. Results show that women entrepreneurs, on average, employ more women and invest more in community projects.

How do women do in international trade? The International Trade Centre’s large-scale survey looked at the extent of the challenge, and estimated that only one out of five exporting companies is women-led. That disparity occurs not only in developing countries but across Europe. Women-led enterprises are generally concentrated in less dynamic sectors than male-led ones, and women-led enterprises are involved in both import and export. In employment, job segregation means that women tend to work in lower paid jobs.

What are the reasons for that disadvantage? Women face unequal access to finance, skills, property and business networks, and some of those disadvantages can be explained by the fact that women often run smaller businesses and have other gender-specific barriers to entry. I have seen at first hand in numerous developing countries how financial innovation can be used to make credit facilities more accessible to women living in poor and rural communities. Lack of access to reliable and feasible loans is one of the major barriers to entry for women wanting to become economically independent.

Village savings and loan associations harness the existing social structure in villages to bring together people to make a financial contribution and save money as a community. That is a good example of funds being used as credit facilities and of a way for female entrepreneurs to get funding in locations where there are no traditional banking facilities. In Uganda, for example, more than 15,000 such savings groups have been established, and local people have now benefited from financial training. That is a good example of why savings groups are a key tool to promote female economic empowerment, so I hope the Government look at supporting such initiatives throughout the Commonwealth.

We need to reform the business, policy and legal ecosystem to ensure that it is not stifling female entrepreneurship and participation in trade. We need much better data to understand the barriers that prevent women from trading in the first place—what it is that is holding them back. We need to ensure that women have a voice when policies are being designed and implemented. It is also critical to acknowledge the work of the private sector, which has an important role to play in mentoring and training women to supply chain diversity programmes. All companies must be encouraged to create concrete opportunities for female entrepreneurs.

Secondly, the UK should champion an MBA scholarship initiative for 500 young women entrepreneurs and business leaders of the future from Commonwealth developing countries. That would give an opportunity for young female entrepreneurs to further their skills and to grow their businesses.

Thirdly, I congratulate CDC on its excellent commitment to close the economic gap between men and women. Forums such as the gender-smart investing summit in London have been successful in promoting collaboration between development finance institutions and encouraging them to work together. CDC is also encouraging women to be more economically active.

To give a specific example, the Chemi & Cotex company in Tanzania manufactures the leading brand of toothpaste in east Africa. I was impressed to learn that women now make up nearly 50% of its workforce. All the women who head up the sales branches join the company in junior roles and develop their skills within the business. That type of outreach programme is vital to help women to participate fully in the local economy. We must leverage the power of female entrepreneurship and continue to promote gender equality.

Fourthly, the UK should organise a business forum that brings together women entrepreneurs from across the Commonwealth. It would be a great opportunity for women entrepreneurs to share best practice and to forge networks, but also a chance to reflect on and take stock of the progress that we have made with different trade and gender initiatives, to determine the next steps for the future, and to reflect on the 2017 WTO Buenos Aires declaration on trade and women’s economic empowerment.

Finally, the UK should appoint a new special envoy on women’s economic empowerment in the Commonwealth to work at international level across the Department for International Development, the Foreign Office and the Department for International Trade. That would be an extremely powerful way to champion gender equality further. The new envoy could work with the new WTO working group on women and trade, which is expected to be agreed at the upcoming WTO ministerial conference in June of this year. It would allow an opportunity for a co-ordinated and harmonised UK approach truly to unleash the potential of women entrepreneurship in Commonwealth developing countries.

I believe that 2020 is an important year for women’s economic empowerment. It marks 25 years since the adoption of the Beijing declaration and platform for action, while little more than two years has passed since 127 countries launched the 2017 WTO Buenos Aires declaration on trade and women’s economic empowerment. Ahead of the June CHOGM in Rwanda, the issue must continue to be high on the agenda of the various economic groupings in the Commonwealth, from the G20 and the African Continental Free Trade Agreement to APEC, or Asia-Pacific Economic Co-operation. The UK has made a strong commitment to the trade and gender equality agenda, and I hope that in 2020 the UK Government will continue to build on the success of the African investment summit, scaling up that ambition even further.

--- Later in debate ---

[Theo Clarke]

I thank the Minister and all hon. Members for their contributions today. I was very pleased to hear from the Minister that the special envoy on gender equality is doing a huge amount to champion this agenda. I have previously met with the envoy and I am pleased to see that she is continuing this important role. I will also look more into the CDC’s work on supporting gender equality. I was particularly interested in the 2X Challenge, which I will look into after the debate.

I thank hon. Members for their contributions, particularly the hon. Member for North East Fife (Wendy Chamberlain) for her work on period poverty. She has been a strong champion on this issue. I thank the hon. Member for Glasgow North East (Anne McLaughlin) for sharing with us some very interesting statistics on how girls are more likely to attend school than boys; I was very pleased and heartened to hear the progress that we have made over the past few years. The hon. Member for Bristol West (Thangam Debbonaire) made a very important point about how important is that we have the correct data on gender. That will enable us to make progress on this agenda.

For me, it is vital to remember that more than half of our global population is female. Women play a crucial role in societies across the world, and it is important that the UK Government continue to ensure that all women have the ability to fulfil their true potential. I think we can do that in the Commonwealth.

Question put and agreed to.

Resolved,

That this House has considered trade and investment opportunities for women in the Commonwealth.