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Strengthening Women’s Entrepreneurship in South AsiaStrengthening Women’s Entrepreneurship in South AsiaMarketing and Market BarriersMarketing and Market Barriers

Presented by

Fahmida Khatun, PhDResearch Director

Centre for Policy Dialogue (CPD)Dhaka, Bangladesh

Presented atSouth Asia Women’s Entrepreneurship Symposium

1 April 2014Dhaka: Westin Hotel

Contents

1. Introduction

2. Untapped Resources in South Asia: Women’s Potential

3. Access to Regional Markets

4. Removing Trade Barriers – Marketing and Market Access

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1. Introduction Women entrepreneurs are increasingly recognized across the

world for the success of their businesses and for their important contributions to their countries' economic well-being.

A growing body of research indicates that women's economic empowerment is positively correlated with improved family welfare and nutrition, higher education levels for girls, and improved economic growth for the society as a whole.

South Asian women entrepreneurs are powerful role models, too, demonstrating that despite still being at a disadvantage compared to their male counterparts, business success is attainable.

Women often shoulder the double burden of both work and family responsibilities and still face particular challenges in accessing credit to expand their businesses.

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2. Untapped Resources in South Asia: Women’s Potential

Labour force participation rate for women in South Asia has been increasing. Yet the participation rate is lower than men.

Table: Female Labor Force Participation, 2013

Women tend to predominate agriculture and trade, while men predominate in manufacturing, construction, transport and finance.

For example, in case of Bangladesh, Agriculture remains the dominant employment sector for women (64.84%), followed by manufacturing (11.77%), self-employment (16.8%), and community/personal services (10%).

Only 3.25% of all working women are employed by the government vs. 8.25% of working men.

Country Female Male Female to male ratio

Rank

Bangladesh 60 87 0.69 90

India 30 83 0.36 124

Sri Lanka 38 81 0.47 121

Pakistan 23 86 0.27 131

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2. Untapped Resources in South Asia: Women’s Potential

Women are also in lower-skilled positions and earn less.

Table : Wage Equality

Source: World Economic Forum, 2013.

In Bangladesh, informal sector comprises the major share of

female employment which is about 92.0 %;

Number of female unpaid family worker is more than 3 times

higher than that of men I Bangladesh (Labour Force Survey

2010).

Country Female to male ratio Rank

Bangladesh 0.53 119

India 0.62 86

Pakistan 0.55 113

Sri Lanka 0.74 25

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2. Untapped Resources in South Asia: Women’s Potential

Educational attainment and skills are determining factors for

inequality in the labour market.

Table: Educational Attainment of Labour Force (%)

Source: Labour Force Surveys.

LFS 2005-06 LFS 2010

Education Level Male Female Male Female

Total 100 100 100 100Up to Class V 24.12 22.88 35.9 41.0

Class VI to Class IX 21.48 16.26 43.5 43.3SSC 7.54 4.61 7.4 7.6HSC 4.23 2.32 5.7 4.3Degree 3.32 1.82 4.5 2.9

Post Graduate 1.73 0.99 1.5 0.3Others 0.51 0.35 1.5 0.4

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2. Untapped Resources in South Asia: Women’s PotentialGender inequality is costly for economic growth. Research

indicates that the country could attain higher GDP growth per year by eliminating gender inequality;

If women’s labour force participation were closer to male

participation, it would contribute to USD 1 trillion in emerging economies;

Women’s business is key to this opportunity;

Women’s participation in the economy contributes to the advancement of the society in many ways:

Reinvestment: Women reinvest every single income in “human resources” – their families’ education, health, nutrition;

Job creation: Women’s participation i entrepreneurship will create employment opportunities.

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2. Untapped Resources in South Asia: Women’s Potential

In order to take full advantage of the untapped human

resources in South barriers to business should be removed.

There are 4 major areas where women entrepreneurs need

support in order to advance their business.

1) Marketing and market access

2) Access to resources and finance

3) Business development and training

4) The enabling environment

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India’s Duty Free offer to Bangladesh’s Exports: An interesting feature of Bangladesh’s export to India is that whilst the ratio of Bangladesh’s global export of RMG and non-RMG items was 80:20, in case of India this was 20:80. This alludes to the potential for Bangladesh’ export diversification in the Indian market using DFQF offer of India.

3. Access to Regional Markets: Opportunities

Table : Bangladesh’s major export items to India, 2013

HS code Major export items % share

53 Vegetable textile fibres nes, paper yarn, woven fabric 23.863 Other made textile articles, sets, worn clothing etc 13.808 Edible fruit, nuts, peel of citrus fruit, melons 11.962 Articles of apparel, accessories, not knit or crochet 10.852 Cotton 4.674 Copper and articles thereof 4.427 Mineral, fuels, oils, distillation products 3.423 Residues, wastes of food industry, animal fodder 2.985 Railway, tramway locomotives, rolling stock, equipment 2.628 Inorganic chemicals, precious metal compound, isotopes 2.561 Articles of apparel, accessories, knit or crochet 2.5

Others 19.31

Total 100.0

Source: Export Promotion Bureau, 2013

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Ease of Doing Business Report

Source: Doing Business Reports, World Bank 2013.

Time required for documents accounts for the major difference between Bangladesh and India in terms of the period required for trading (EXPORT: BD-14 days, IND-8 days; IMPORT: BD-22 days, IND: 8 days).

In terms of Documentation, BD is a better performer.

Registration process in BD has been automised which makes starting a business easier than before.

Access to power remains a problem

Time required for trading license, tax and vat registration has been reduced.

3. Access to Regional Markets: Trade Logistics

Table: Documents, time and costs to export and import

Indicator Bangladesh India South Asia

Documents to export (number) 6 9 8Time to export (days) 25 16 33Cost to export (US$ per container) 1,075 1,170 1,787

Documents to import (number) 8 11 10

Time to import (days) 35 20 34

Cost to import (US$ per container) 1,470 1,250 1,968

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Bangladesh’s exporters to South Asian markets face several impediments in those markets which are :

Non Tariff Barriers (NTBs) Para Tariff /Other duties on importers Sanitary and Phytosanitary (SPS) measures Trade facilitation issues Poor connectivity The NTBs and SPS measures come in various forms: Labeling requirements, Lab testing Lack of accreditation facilities Compliance with standards and quality certification Clearance requirements Restricted registration/membership certification, packaging requirements L/C facilities Procedural complexities (lack in simplification and harmonization of trade

procedures)

3. Access to Regional Market: NTBs, SPS measures and Trade facilitation related obstacles

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Certificates (SPS and health related) for several exportable commodities

Processed agricultural foods

Need SPS Certificate for processed agricultural foods including fruit juice, puffed rice etc

Moreover, for several food items, Indian customs authority needs certificate from Inspection agency in Kolkata and Delhi which also create obstacles in exporting these items

Jute Goods

Oil Content Certificate

Soap items

Indian authority requires approval/licence from Delhi

To receive the approval , the process takes nearly 15 days on an average

3. Access to Regional Markets: NTBs and SPS measures and trade facilitation related obstacles

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Certificates (SPS and health related) for Several Exportable Commodities

SAFTA and other certificates (commercial invoice, packing list, bill of entry, vat registration, certificate of Origin, pay order, company registration etc) : Bangladeshi exporters need to submit these certificates for every consignment which creates hassle and increase cost for exporters;

Certificate related issues in Bangladesh: Exporters need to collect certificate from several organizations including EPB, MCCI and other organizations which takes time and increase cost.

Processing and clearance delay and Congestion

Lack of roads and railways Lack of train and air service create

Frequent changes of policies in the importers’ side

Frequent changes of customs officials

Non-transparent customs procedures and documentation at the border

3. Access to Regional Markets: NTBs and SPS measures and trade facilitation related obstacles

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4. Removing Trade Barriers – Marketing and Market Access

There are a range of issues impacting on women’s ability to take advantage of market opportunities, to meet market needs, and to reach the market more effectively.

(i) Access to information Even at the digital age women entrepreneurs still

experience difficulties in obtaining information and gaining effective access to these markets.

(ii) Cultural and social barriers Often, cultural and social constraints have an impact upon

women’s ability to travel, and to have physical access to markets outside of their immediate communities.

Additionally, women’s ability to freely meet, communicate and negotiate with men (as suppliers, customers and business support agents) in relation to building their business also act as a key constraint.

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4. Removing Trade Barriers – Marketing and Market Access

(iii) Business premises Access to suitable premises for production and selling

purposes is another barrier. There is a need for safe and secure market areas where women entrepreneurs would be able to market their products and services.

(iv) Trade fairs and promotional activities Trade fairs and other promotional mechanisms for

presenting the products and services of women entrepreneurs are useful.

Business associations should be the primary mechanism for supporting the development of these types of activities.

International organisations should provide support for trade fairs as a means of improving market access, and promoting international lessons and best practices in relation to market development.

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4. Removing Trade Barriers – Marketing and Market Access

(v) Networking events In terms of supporting women’s knowledge of and access to marketing

opportunities, networking events for women entrepreneurs can be useful.

This would facilitate shared experience and information exchange, but go further by presenting opportunities for joint projects and the development of new products and services.

(vi) Training and support for marketing Business development organizations and women entrepreneurs’

associations should ensure that they offer targeted and high quality marketing support for women entrepreneurs. Such support should include: Facilitating women’s access to domestic and export markets Promoting women’s businesses and their products Providing a range of training opportunities addressing a

number of marketing issues for women entrepreneurs Providing access to information technology and other means of

accessing marketing information.16

Thank You

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