By Ashwini Deshpande
Gender gaps come in the way of business competitiveness. India should take its slide in The Global Gender Gap rating seriously
The credit rating company, Moody’s, has upgraded India’s investment ranking from the lowest to one notch up. This was preceded by India’s 30-spot rise in the “Ease of Doing Business” rankings, from 130 to 100. Both these upgrades, from rock bottom to slightly-higher-than-rock-bottom, have created a media stir, with a barrage of congratulatory op-eds and commentaries, including in the daily FM radio shows that belt out the latest hits. What these rankings signify about the state of the Indian economy is debatable, but this piece is about another ranking that got buried in the din.
The Global Gender Gap ranking for 2017 was released last month. India slipped 21 places in this ranking compared to last year. Why did this not generate commensurate analysis and introspection? Probably because of the belief that the ease of doing business has direct consequences for economic growth and material welfare, whereas gender rankings are more about fairness, equity, or empowerment — warm-glow concepts that are difficult to define and change, even if we hypothetically assume that there is a consensus that gender gaps are not desirable. Which, of course, there isn’t, as there is daily evidence of a mindset that thinks of women as second-class individuals, both inside the home and outside.
Like all indices, the Global Gender Gap Index, which was first introduced in 2006, is a précis measure, in turn a combination of four different sub-indices, each summarising multiple indicators. The index lies between 0 and 1, with 1 denoting complete parity. It is important to note that this index focuses on gender gaps, and not on whether “women are winning the battle of the sexes”, that is, the focus is on the position of women relative to men (that is, gender equality), rather than to their absolute position (that is, women’s empowerment). The idea is to track changes in gender gaps both over time and across countries.
Also, like all such indices, it doesn’t include everything that matters for gender equality, but focuses only on a few key measures. Thus, it should not be seen as a comprehensive treatise on gender equality, but as a useful pointer or a highlighter of key summary statistics that can be reliably measured and tracked.
The table shows the values of the overall index, as well as the four sub-indices, and India’s rank in a set of 144 countries in each of these for 2016 and 2017. Overall, we see that India’s position has slipped by 21 points despite the fact that the value of the index has fallen marginally. This slide in India’s position reflects that gender gaps in India on these dimensions have worsened, both over time and relative to other countries (that is, other countries have done better).
The two sub-components of the index that account for this slide over time are “economic participation and opportunity” and “political empowerment”. The former includes three indicators: The participation gap (difference in labour force participation between men and women), the remuneration gap (captured by a hard data statistic of ratio of estimated female-to-male earned income, as well as a qualitative indicator about wage equality for similar work), and the advancement gap (measured through two hard data statistics: Ratio of women to men among legislators, senior officials and managers, and the ratio of women to men among technical and professional workers). The latter measure identifies gender gaps in the highest level of political decision-making, and includes the ratio of women to men among ministers, among parliamentarians, and in terms of years in executive office (president or prime minister) over the last 50 years.
The other two components of the index include gender gaps in educational attainment in primary, secondary and tertiary levels; and the sex ratio at birth to capture the phenomenon of “missing women” due to strong son preference, as well as gender gaps in life expectancy.
South Asia as a region has the second lowest value of the index. In other words, the region is marked by low gender equality. India is one of the four countries in the region that has worsened in several dimensions: Political empowerment, as well as in the share of managers, legislators, technical and professional workers. India’s progress in the educational indicators has been good, in that it has succeeded in closing the gaps in primary and secondary education enrollment, and has almost closed the gaps in tertiary enrollment as well. However, it continues to lag behind in terms of gender gaps in the health indicators.
Can these rankings be explained by geographical groups, or by levels of economic development? A look at the top 10 reveals a peculiar group of countries, geographically dispersed and economically diverse. In addition to the usual suspects, the Nordic countries, we find Rwanda, Nicaragua and Slovenia in this list. In South Asia, right next door, Bangladesh has a much better ranking than India at number 47, with lower gender gaps than even the US, which is at number 49. Bangladesh has continued to lower gender gaps on all indicators, defying the usual stereotypes associated with religion and poverty.
Discussions of gender gaps are often dismissed as issues that keep the activists, NGO communities and development aid agencies — the do-gooders — busy. What is significant about this particular ranking is that it is compiled by the World Economic Forum, a Swiss organisation, which engages the “foremost political, business and other leaders of society to shape global, regional and industry agendas.” Could this be because gender gaps matter for business and growth?
Indeed they do. Gender equality is desirable, even for purely instrumental reasons, and should be supported even by those who think equity concerns are getting in the way of business. As the 2017 report points out, talent is important for competitiveness and to find the best talent, everyone should have equal opportunity: “When women and girls are not integrated, the global community loses out on skills, ideas and perspectives that are critical for addressing global challenges and harnessing new opportunities.”
There is ample research documenting the staggering economic costs of sidelining women. An OECD estimate reveals that gender-based discrimination in social institutions could cost up to $12 trillion for the global economy, and that a reduction in gender discrimination can increase the rate of growth of GDP. Internalisation of this understanding would mean that gender equality has to be mainstreamed into economic policymaking, rather than viewed as a residual concern to be tackled later, as an afterthought.
As we celebrate the rise in the ease of doing business rankings, it is critical to remind ourselves that success and competitiveness of business depends as critically on gender equality, as on tax reforms and infrastructure development. A slide down the gender gap rankings does not make good business sense, even if we temporarily forget that “women hold up half the sky.”