Investment Towards Women Ensures Economic Recovery

Investment Towards Women Ensures Economic Recovery

The IDB discussed the importance of reducing financial inequality as a strategy to reactivate the economy in Latin America.


The Inter-American Development Bank (IDB) discussed the importance of reducing financial inequality as a strategy to reactivate the economy in Latin America and the Caribbean.

The pandemic disrupted the economy and society on many levels. For that reason, the international system, through different institutions, is working to help governments to solve the problems generated and magnified by COVID-19.

One of the greatest challenges to be confronted is faced by Latin American women, who have become an economic challenge and one of the main pillars of the recovery. According to the World Bank, the restrictive measures had disproportionate effects on society, placing women as the main affected, because the global financial alterations reduced their economic autonomy and empowerment, especially those who live in developing countries.

This can be explained by two regional realities. The first is informality. Different academic observatories have reported that the continent has a high percentage of people working in the informal sector. Unfortunately, it is estimated that 50% of women workers are in this sector.


In the second place, the companies led by women had an economic reduction three times greater than that presented by companies led by men. One of the reasons for this is given by Reina Mejía Chacón, vice-president of the IDB, who points out that 70% of informal companies are led by women, which means that they have more operational risk due to unsafe working conditions.

Likewise, the businesses where these companies are located belong to the sectors most affected by the restrictions; for this reason, the strict confinements reduced the income of these companies and, consequently, their competitive capacities.

How Can the Institutional Framework Help Them?

According to the IDB's Executive Vice-President, reducing the financing gap between men and women is one of the keys. Data obtained by the entity indicate that Latin America has a financing inequality of US$85 billion per year. Therefore, creating financing or leverage mechanisms would help the continuation or reactivation of activities or actions paralyzed or affected by business closures and social quarantines.

However, with such a high percentage of informality, it is necessary to create national and international mechanisms to promote and motivate the formalization of companies, given that informality prevents access to credit, further increasing the financing gap and delaying socioeconomic recovery.

In this order of ideas, the institutions have recognized the importance of public-private partnerships. Therefore, the IDB has been involved in several multilateral projects aimed at linking women entrepreneurs and their businesses to business value chains and thus improving the competitiveness of their services. To this end, public-private investments or collaborations are vital, as they have an important strategic responsibility, and through them, resources and their distribution are dynamized.

Undoubtedly, investing in women signifies growth. The role of women in recovery, in economic development, and in the construction of society is extremely important. Therefore, governments should be linked to the international synergy that international financial institutions are proposing, with the objective of improving the living conditions of all their inhabitants.

Posts Carousel

Leave a Comment

Your email address will not be published. Required fields are marked with *

Top Authors