The Mena region needs more women in the workforce

In many economies in the Mena region, a large number of highly educated women are outside the formal labour market. The region cannot afford to continue underutilising this vital human capital. Embracing gender equality in economic activities is not only a choice – it is essential for prosperity in a highly competitive world fraught with challenges and shocks, where a large share of the youth is inactive, consecutive shocks have further worsened inequality, and economic opportunities for women are scarce. Despite the great strides that much of the region has made in enhancing the role of women in the economy over the past two decades, significant gender disparities remain. Female labour force participation rates are among the lowest in the world, standing at just 44.5 per cent in the GCC and even lower, at 18.2 per cent, in other Mena countries in 2022. While the GCC has increased its average female labour force participation by more than 10 per cent over the past two decades, women’s role in economic activities still falls short when compared to countries with a similar gross domestic product per capita. Moreover, the gender gap in labour force participation rate is persistently large, the unemployment rate for women tends to exceed that for men, and women’s labour market participation is more susceptible to shocks. Closing gender gaps in economic activities can drive stronger, more inclusive, and sustainable growth. A recent IMF research showed that halving Mena’s gender gap within the next 10 years could raise potential output by more than $1 trillion. Achieving this goal will require collective efforts from policymakers, the private sector and civil society to ensure that opportunities are expanded and made more equitable for everyone, allowing the fruits of economic development to be shared by all segments of the population. Legal and governance reforms will play a crucial role in ensuring equal access for women to legal and financial rights, amplifying women’s voices and securing their equal role in decision making. Countries should revamp their education and training systems to address skills mismatches, and equip women with better access to financial resources and markets to encourage entrepreneurship and foster innovation. Further, policymakers must dismantle the many barriers that prevent women’s entry into the job market and their capacity to establish, lead and scale their own businesses and startups. Revamping social protection systems to provide fairer access to essential services – such as health care, education and social insurance – and effective social support mechanisms can significantly improve the quality of life for the most vulnerable. Such reforms will make substantial contributions to both economic progress and improved social outcomes. The IMF is a long-standing partner of Mena countries in their pursuit of growth that is both more inclusive and resilient. During regional conferences in Amman (2014) and Marrakech (2018), we urged policymakers from the region, together with the private sector and civil society, to establish a new social contract aimed at ensuring the wider distribution of the gains from economic development among all citizens. Advancing inclusion and fostering shared prosperity were the themes of our annual meetings in Marrakech last year, where we launched a call for action to accelerate the progress. Encouragingly, some countries are actively reforming to reduce the gender gap. Efforts by the Saudi authorities to advance equality have helped increase that country’s female labour force participation rate among nationals from 18 per cent in 2017 to an unprecedented 37 per cent by the end of 2022. This progress was achieved through the removal of formal restrictions in the legal code, employer incentive schemes, the provision of childcare support, and expanded access to training and scholarship opportunities. Potential growth gains from increasing Saudi Arabia’s female participation to the OECD or G20 average are estimated at 1.6 per cent annually. Several countries have also revisited their strategies to set targets aimed at advancing women’s economic engagement. For instance, Egypt’s Vision 2030 has incorporated a National Strategy for the Empowerment of Egyptian Women, setting a goal to achieve a 35 per cent female labour force participation rate by 2030. Similarly, Jordan’s “Economic Modernisation Vision” targets the creation of 1 million jobs and aims to double the female labour force participation rate by 2033. Additionally, Morocco has launched a national programme to increase women’s labour force participation to 30 per cent by 2026. Maintaining reform momentum is essential. The IMF’s call for action at last year’s annual meetings in Marrakech heralded an opportunity to rejuvenate efforts to close the gap between the growth models of the past and the growth engines of the future, where women are equal partners in economic leadership.