Gender equality to yield $2.7 trillion in economic gains for the region

McKinsey estimates that parity between the sexes would boost the world economy by $28 trillion – increasing economic output by more than a quarter over the next decade. Thomas Barwick

Were women in the Middle East and North Africa to enjoy the same economic opportunities as men, the region would be US$2.7 trillion better off between now and 2025, according to a new study by the McKinsey Global Institute.

That is equivalent to a 4 percentage point boost to regional economic growth every year – in a region that has grown at or below 3 per cent on average since 2011.

These figures bring home the scale of the economic waste that follows from the low rates of female participation in the workforce, unequal pay, poorer promotion prospects and limited maternity and childcare benefits.

The report’s findings are supported by a similar IMF study. Masood Ahmed, the IMF’s regional director for the Middle East, said earlier this year that lowering the gap between male and female labour force participation in the Middle East would add as much as $1tn to economic output over the next decade.

Only about one in four women in the Middle East has a job, according to the World Bank, which is half the global average of one in two.

In the Middle East, most of the gains to economic growth would come from increasing female employment, McKinsey said.

The high rates of female education in the Arabian Gulf have not filtered through into high rates of female labour-force participation. In the UAE, 76 per cent of women have university degrees but only 34 per cent of women work. Only 1.2 per cent of seats at the board level are held by women, according to data from the Pearl Initiative, a non-profit research group.

Female economic disadvantage takes at least three main forms, as measured in the report. Fewer women work, most work fewer hours than men, most work in lower-productivity sectors such as agriculture and there are too few women in high-productivity sectors such as finance and engineering, the McKinsey report said.​

The Middle East is not the only region that would benefit from the eradication of gender inequality. McKinsey estimates that parity between the sexes would boost the world economy by $28tn – increasing economic output by more than a quarter over the next decade.

The UAE was described in the report as having “relatively low gender equality in work”. The wage gap between men and women doing the same jobs was said to be the fifth-largest of the 96 countries surveyed in the report.

UAE officials have often pointed to the high rate of Emirati women pursuing further education as a good sign for the country’s future. “When a society doesn’t focus on female education, you see after a while that it does not provide women with enough opportunities,” Sheikha Lubna Al Qasimi, the Minister of International Cooperation and Development, said in February. “In the UAE today, we’ve seen that education for women has been a priority since the inception of the state, and women were able to access many sectors because of education.”

The authors of the McKinsey report argue that governments should focus their efforts on boosting education among women, increasing financial inclusion, upgrading legal protections for women at work and providing alternatives to maternal provision of care for children and the elderly.

Analysts of labour markets in the Middle East have long called for a renewed government focus on getting women into work. Many have cited the difficulty of returning to the workforce after pregnancy as a key obstacle for women’s participation in the Arabian Gulf’s labour force. Others have pointed to the lack of legal safeguards against sexual and wage discrimination in the workplace. “Recent mothers find their workplaces unable to offer them the flexibility and support they need to get back into work,” Radhika Punshi, the director of innovation at The Talent Enterprise, a human resources consultancy, said earlier this year. That was because the private sector in the Gulf did not have enough of an employment ecosystem for working mothers, she said.

This year’s Mena Talent Competitiveness Index, published by Insead and PricewaterhouseCoopers, listed more than a dozen ways for Arabian Gulf governments to boost female employment. The report recommended greater flexibility in terms of working hours, retraining programmes, more recruitment events and extra funds for companies to make their workplaces easier for parents to navigate.

“Mena employers in both the public and private sectors can best grow their female talent through training, coaching, mentorship programmes and exemplifying role models to encourage women to excel,” the Insead-PwC report said.

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