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Are WOBs Getting Screwed in Procurement Post-COVID?

I am super thrilled to have been asked to give a keynote at the upcoming global summit being organized by the Cherie Blair Foundation. They have asked me to talk about women-owned businesses (WOBs) and supply chains. This is great, not just because I know something about the topic, but because I have an opinion about it (some might say a rant, but I try to stay calm in public appearances).

I know that, for many people, the term "supply chains" is opaque jargon and sounds particularly uninteresting—but supply chains are very important for female entrepreneurs and workers worldwide, so let me begin with a short description.

When a business or government buys goods for manufacturing (or, really, any use), they purchase from other businesses, which are called, in this context, "suppliers." Those suppliers, in turn, purchase materials (like raw ingredients for a product they make), products to sell themselves at retail (like a grocer selling bananas), and services (like shipping and air freight) from still other businesses. Those businesses, in turn, buy still other products, like lumber or glass or plastics or fertilizer, to make their own products. And so on. The sequence of production and supply is what is known as the "supply chain." And that's all it is.

Large companies and governments have many supply chains. For instance, a large international retailer, like Walmart or Marks & Spencer, purchases goods, say, both groceries and clothing for selling to consumers, but they also have to buy things that are needed for their own work, from name tags to cashiers' machines. So multinationals usually will have supply chains that stretch all over the world and affect a very wide swath of industries. Big countries' governments like the United States are not only the biggest employers in their countries, but also the biggest buyers. The USA buys stuff from mayonnaise to missiles, from electronics to elevators.

Having large contracts to supply governments and large businesses therefore can make a woman-owned business grow quickly and potentially keep it going for many years. With such a contract, she will be able to hire people and to buy from people who really need to sell, such as small farmers in developing countries, for instance.

However, gender prejudice is built into the very structure of supply chains, just as it is in employment and finance. That happens because of multiple inequities that occur all along the way in making something to sell. For instance, right up front, you need credit to buy the volume of materials it takes to supply a large buyer and also to hire the people it takes to make the increased number of units. But banks, all over the world, are less willing to give women conventional business loans—their allegedly "objective" lending criteria systematically eliminate women, but they also discriminate based on stereotypes, meaning they often have no good reason. And they will do this even if the woman can show a purchase order from Walmart. Shameless.

A reasonable estimate says that only 5 percent or less of that kind of credit goes to women-owned businesses wherever you go. As an example, despite vast differences in their laws governing women in the economy, women get only 5 percent of business loans in the United States and Lebanon, even though women own about a third of all small businesses in both countries. There are other things, such as agricultural technology experts, who teach male farmers new techniques that improve crops, but ignore the female ones. Customs agents are more likely to stiff women than men or demand bribes from them (or sexual favors). I mean, it just goes on forever. (I have written a piece for the Financial Times that describes these inequalities in more detail. And, of course, it's all covered in the book.)

When these supply chains cross national boundaries, which is often the case, they, collectively, constitute virtually all of international trade. The big picture is this: according to the International Trade Center, 99 percent of world trade and the same percentage of large procurement contracts are controlled by men. It's a male monopoly; the forces that protect that masculine cartel are structural and global.

Multinational corporations comprise 80 percent of world trade. So, getting them to take on programs that bring WOBs into their supply chains is the quickest, most efficient way to equalize women's access to global trade (and to grow businesses owned by women, including, as an example, women's agricultural collectives in poor countries). That's why a number of government departments, international agencies, corporations, and NGOs began programs, over about the last ten years, designed to better include women as suppliers in these huge chains. But it proved to be pretty difficult because every time you thought you had eliminated a barrier, you saw another one. It was like economic whack-a-mole. So the going has been slow, but quite a few organizations have been working on it and progress has been made.

Then COVID. The impact of the pandemic on women's employment has been the focus of almost all the press coverage and governments have done next to nothing about that. The gendered effect on women-owned enterprises has been almost entirely overlooked. Governments claim that when they do stuff to support small businesses, they are helping both men and women. This argument is either really disingenuous or super naïve: if you don't make adjustments for the gender issues, all such "gender-neutral" programs do is replicate the existing system that excludes women.

The women's economic empowerment community is now seeing in new data that there is an ongoing COVID impact on the whole process of integrating women into supply chains. Informal reports from the field tell of practices so backward and brazen that, honest to God, it makes my blood run cold. Not only are the programs being cut, but female suppliers are being pushed out of the supply chains. Bankers are back to free-wheeling bigotry. All of it.

And that's what I will talk about at the Cherie Blair Foundation event. I promise I will try very hard not to rant.

# doublexeconomy



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