Kinderstanger Policy Brief

POLICY BRIEF

BY MOLLY KINDER AND EMILY STANGER

What will the revitalization of Liberia’s economy mean for the women at its center? “During the period of our elections, Liberian women were galvanized and demonstrated unmatched passion, enthusiasm, and support for my candidacy...My Administration shall thus endeavor to give Liberian women prominence in all affairs of our country….We will also try to provide economic programs that enable Liberian women - particularly our market women - to assume their proper place in our economic process.” –President Ellen Johnson-Sirleaf in her inaugural address, January 16, 2006-

Liberian women comprise the majority (54 percent) of Liberia’s labor force, yet they are at risk of being marginalized from the benefits of Liberia’s economic revitalization during the next three years. Rural roads, urban microfinance, and building the environment for promising nontraditional sectors are critical policies to enhance women’s economic opportunities. In 2006, promising to rebuild her war ravaged country, Ellen Johnson-Sirleaf became the first female to be elected president of the Republic of Liberia. “Ma Ellen” entered office with an unambiguous mandate to improve the livelihoods and economic opportunities of Liberian women, her “greatest constituency.” This pledge bears important development consequences: Liberia’s protracted civil war claimed the lives of thousands of male breadwinners, placing women as heads of some 18 percent of urban households. Today Liberian women are fully engaged economic actors, comprising more than half of the total labor force and leading many vibrant sectors of the economy, including the country’s markets. This policy brief1 provides recommendations for the specific policies that the Sirleaf administration can implement over the next three years to achieve its stated goal of putting women in their “proper place” in Liberia’s economic development. 1

This policy brief is based on the findings of the paper, “Fulfilling President Sirleaf’s Mandate: Ensuring Women their ‘Proper Place’ in Liberia’s Economic Development” by Molly Kinder and Emily Stanger. The paper was prepared for the MPA/ID program at Harvard University.

than 75 percent of all cash and food crop production. As major economic actors, women make significant contributions to household income; alone and with other household members, women contribute to 65 percent of urban household income and 45 percent of rural.

ECONOMIC PROFILE OF LIBERIAN WOMEN

Figure 1

Contributions to Total Household Income: Urban and Rural Source: CSFNS 2006, Monrovia CSFNS 2007

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Women comprise the majority (54 percent) of Liberia’s labor force. The vast majority (90 percent) of women workers are clustered in the least productive sectors: the informal economy and agriculture.

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Liberian women play a major role in their country’s economy, its labor force, and household income generation. Yet men and women are not equally distributed across the productive sectors, nor are they equally remunerated.

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Source: CWIQ 2007

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Composition of Labor Force (Formal and Informal)

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DISTRIBUTIONAL IMPACTS OF LIBERIA’S GROWTH Given their vibrant presence and unique role in the economy today, where will Liberian women be at the end of three years? How will the revitalization of the country’s natural resources sectors affect women’s contributions to Liberia’s GDP?

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Urban working women are predominantly selfemployed (74 percent).The two most common occupations for female workers are street vending/petty trading and working as “market women.” In contrast, men are 2.5 times more likely than women to be skilled workers.

Liberia’s GDP is projected to grow in the doubledigits for the next three years. Although output is expected to grow in all sectors, the composition of Liberia’s GDP will change significantly with the revitalization of the country’s natural resources sectors -- particularly timber, mining and extractive industries. Figure 4

Figure 2

Projected Breakdown of GDP by Sector Mode of Payment for Urban Workers WOMEN

Mode of Payment for Urban Workers MEN Source: Monrovia CFSNS

Source: Monrovia CFSNS

Unpaid 2%

Source: Liberian Authorities & IMF staff (PRS draft Chapter 7) 100% 90%

Wage/ Salary 19%

Unpaid 1% Casual 2% Selfemployed (formal) 3%

Selfemployed (informal) 35%

Wage/ Salary 44%

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Women conduct 85 percent of marketing and trading in the country and contribute to more

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40% Selfemployed (informal) 74%

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2010 Proj

2011 Proj

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2007 Proj

2008 Proj

2009 Proj

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This sector breakdown of Liberia’s growth has alarming distributional effects for women workers. Given women’s predominance in agriculture and the informal sectors, men greatly outnumber women in all other sectors of Liberia’s economy. In the mining sector, more than nine men are hired to every one woman; in forestry the ratio is four to one.

I. WOMEN IN AGRICULTURE: Boosting Women’s Efficiency Through Roads To strengthen economic opportunities for rural women, the Government of Liberia should prioritize the construction of farm-to-market and rural access roads. Roads -- identified by rural Liberians as the primary constraint to development – are critical for the agricultural work of rural women.

Figure 5

Across the rural areas, Liberians must travel an average of three hours to reach food markets. Women conduct 85 percent of agricultural marketing and trading, and thus bear much of the burden of inadequate roads and transportation infrastructure. Prioritizing rural roads will decrease this transport burden on women, enhance their efficiency and create income-generating opportunities for rural women.

As male-dominated sectors grow as a proportion of Liberia’s GDP, women’s percent contribution to GDP will decline. Women’s labor contribution to GDP will fall from 44 percent in 2007 to 36 percent in 2011. Although the absolute labor contribution of women will increase, this proportional reduction in women’s contribution shows the unequal distribution of Liberia’s growth. Female labor will contribute to, and thus benefit from, less than one-quarter of the new growth over the next three years. POLICIES TO ENSURE WOMEN THEIR “PROPER PLACE” IN THE ECONOMY As it stands, women are at risk of being marginalized from the benefits of Liberia’s economic revitalization. The government can adopt two approaches to address this concern: Enhance the productivity of women in the sectors in which they currently work, primarily agriculture and the informal sector. Create new opportunities for women in promising nontraditional sectors that have not yet emerged.

II. WOMEN IN THE INFORMAL SECTOR: Meeting the Credit Needs of Urban Women To bolster the productivity of women in the informal urban economy, the Government of Liberia should support the expansion of the microfinance sector to meet the large unmet for credit among self employed women. In urban areas, 75 percent of women are self-employed. Yet less than 1 percent of these women access formal credit to support their businesses. In order to address this pressing constraint, the Government of Liberia should take the following measures: Create the appropriate regulatory environment for the expansion of the microfinance sector, while refraining from engaging in direct service delivery. Meet the credit needs of women by ensuring that small-scale micro enterprises are prioritized in SME financing strategies. (Less than 20 percent of informal enterprises are owned by women, whereas 85 percent of petty trading and marketers are women.) Pair microfinance with skills and business training. III. WOMEN IN THE FORMAL ECONOMY: Stimulating labor-intensive industry The third prong of Liberia’s growth strategy calls for Liberia to “aim over the medium-to-long term to diversity into labor-intensive downstream processed

products, other manufacturers, and services.” In other countries, many of these labor-intensive industries identified as potential sources of growth in Liberia-- including horticulture, jewelry making, garments, and toys – have employed a very large percentage of female workers. Thus women stand to gain from he emergence of these nontraditional sectors. However, it is not advisable for the government to attempt to stimulate these industries through the creation of an Export Processing Zone (EPZ). EPZs have had little success in Africa, would be administratively and fiscally infeasible for Liberia, and most importantly, would not address all of the underlying constraints on investment. To lay the foundation for the emergence of these nontraditional industries that employ women in the next five to ten years, the Government should take steps to improve the overall business environment and investment climate. A FUTURE OF GREATER ECONOMIC OPPORTUNITIES FOR WOMEN Liberia’s economic growth will, by and large, favor men over the next three years. Given the current environment and constraints to investment, it is unlikely that Liberia will witness a substantial growth over the next three years in new nontraditional industries that would employ a large percentage of women. These realities paint an unfavorable picture for the cause of women’s economic opportunities in the near term.

Yet there is still a great deal that the Sirleaf administration can accomplish to bring women to their "proper place" in the economy. The Government can take steps to enhance productivity in the sectors where women are now and, looking forward, help move women into more productive sectors that will emerge. The construction of rural roads and the advancement of the microfinance environment will go a long way towards making a measurable difference in the economic lives of Liberian women in the next three years. Moreover, by making progress in improving the investment environment in Liberia, the Government of Liberia can help to lay the foundation for industrial growth in the next five to ten years. Thus the seeds laid by the Sirleaf Administration will not bear all of their fruit during the next three years of her administration’s tenure. Rather, they will continue to affect women’s lives long into the future. Her focus on educating the country’s girls will help change the face of Liberia’s workforce down the road: equipping the women of the future to assume a more prominent role in the skilled and productive sectors of the economy. Moreover, her administration has made laudable progress in stamping out corruption, strengthening governance and financial management, maintaining peace and stability, rebuilding the country’s broken infrastructure, and recruiting the country’s talented diaspora back to Liberia. These efforts will help reorient the course of Liberia from one of destruction and war to one of prosperity, development and, importantly, opportunity for women.

Molly Kinder and Emily Stanger are recent graduates (Class of 2008) of the Master in Public Administration in International Development (MPA/ID) Program at the Harvard Kennedy School. This brief was prepared in conjunction with their “Second Year Policy Analysis” paper entitled “Fulfilling President Sirleaf’s Mandate: Ensuring Women their ‘Proper Place’ in Liberia’s Economic Development,” advised by Professor Rohini Pande and recipient of the Jane Mansbridge Research Award. A version of the paper is published as the feature article in the 2008 Women’s Policy Journal of Harvard. The policy analysis in this brief builds on the work of both authors with the Government of Liberia. In 2007 Molly interned with Minister of Finance Antoinette Sayeh and Emily with Vabah Gayflor, Minister of Gender and Development. This work was supported by Nancy Germeshausen Klavans and Harvard’s Women and Public Policy Program. The policy recommendations are the express views of the authors. The brief and the longer paper are intended to complement the Government of Liberia’s national Poverty Reduction Strategy (2008). Statistics in the economic profile are estimated from the 2007 CWIQ dataset and the CFSNS reports. Additional sources, a detailed description of methodology, and further analysis can be found in the full paper. The authors can be contacted by email at [email protected] and [email protected].