Global Economics

'Girl Effect' Could Lift the Global Economy


Training and supporting young women can transform countries' economic development

There are 600 million adolescent girls in developing countries, but they are largely invisible to the world at large. Included among them are girls affected by armed conflict, domestic violence, HIV/AIDS, sex trafficking, and internal displacement, as well as girls in child-headed households or locked in early marriages. To ignore them is to miss the "girl effect," which could be an unexpected answer to the global economic crisis.

Here's why: When a girl benefits, so does everyone in society, including business. Girls as economic actors can bring about change for themselves, their families, and their countries. Conversely, ignoring the girl effect can cost societies billions in lost potential.

When a girl in the developing world receives seven or more years of education, she marries four years later, on average, and has 2.2 fewer children.

An extra year in primary school statistically boosts girls' future wages by 10% to 20%, and every additional year a girl spends in secondary school lifts her income by 15% to 25%. The size of a country's economy is in no small part determined by the educational attainment and skill sets of its girls.

Young women have a 90% probability of investing their earned income back into their families, while the likelihood of men doing the same is only 30% to 40%.

A girl's school attainment is linked to her own health and well-being, as well as reduced death rates: For every additional year of schooling, a mother's mortality is significantly reduced, and the infant mortality rate of her children declines by 5% to 10%.

If educated, girls can get loans, start businesses, employ other women, and reinvest in their families—when they're ready to have them. That means their children can also have an education.

Consider the situation in Kenya. Some 1.6 million girls there drop out of high school every year. If they finished their secondary education, they would make 30% more money and contribute $3.2 billion more to the Kenyan economy every year. Instead, many take their place among Kenya's 204,000 adolescent mothers and cost the economy $500 million a year.

According to Your Move, a toolkit on the Web site www.girleffect.org, girls in Kenya could, over their lifetime, lift the nation's economy by $27.4 billion through additional education, $25 billion if they delay childbirth, and $1.6 billion if they stay free of HIV/AIDS. Yet without policy intervention, staying HIV/AIDS-free is extremely difficult, and as a result, in Nairobi's urban slums a girl is six times as likely to be HIV-positive than a boy.

Running Their Own Businesses

The girl effect is the same the world over. Yet even though this is well known, girls as a group still receive less than 0.5% of official development assistance. To unleash the potential power of girls on economic development, further action is needed, including protecting their security and meeting their basic needs. When we do this, girls could have the opportunity to create a ripple effect of positive social and economic change.

Some groups are beginning to act. In Bangladesh, for instance, where in some regions nearly 90% of girls are married before 18, the Nike (NKE) Foundation is a partner in a program that trains girls to build solar panels for their villages. At the same time, nongovernmental organization BRAC has pioneered a microfinance program that by 2007 had provided 40,000 adolescent girls with the capital (as well as the confidence and skills) to run their own farming businesses. That, in turn, allows many to pay their own and their siblings' school fees.

In Paraguay, girls participate in schools that pay for themselves as functioning farms. And in Liberia, President Ellen Johnson-Sirleaf recognized the potential of the girl effect, working with the World Bank, the Nike Foundation, and the government of Denmark to develop an innovative public-private partnership called the Adolescent Girls Initiative. The program ensures that adolescent girls—who suffered terribly in Liberia's past conflict—receive training and contribute to the country's reconstruction efforts.

A Goat of One's Own

In Ethiopia, if you are a 15-year-old girl, you have a 43% likelihood of being already married. A pilot program run by the Population Council gave families a $25 goat as an incentive to allow their daughters to go to school instead. Within two years, some 11,000 girls, or 97% of the participants, had stayed in school, gained confidence, and delayed marriage and childbirth.

The message about such successes is getting out. Girls were center stage at Davos this year in a plenary session that included Ngozi Okonjo-Iweala, managing director of the World Bank; Ann Veneman, executive director of Unicef; Melinda Gates of the Bill & Melinda Gates Foundation, and Mark Parker, the president and chief executive of Nike. And at the U.N. in March, around International Women's Day, the interagency task force on adolescent girls promised to increase efforts to include girls in development programs.

First, adolescent girls worldwide need to be identified and counted. With this in mind, the Nike Foundation, the U.N. Foundation, and Maplecroft (a global risk-analysis company, of which I am a director) are working together on global data sets of adolescent girls to map their whereabouts (at a subnational level, where possible) and to understand their development status and prospects. Once adolescent girls are tallied, it becomes more feasible to advocate for appropriate policy responses and set targets that promote their greater participation in society.

Smart Economics

Why does this matter to business? Organizations such as Nike, the Gates Foundation, and Jennifer and Peter Buffett's NoVo Foundation are behind a growing number of new initiatives that target the improved health, education, and economic opportunities of adolescent girls. These organizations have seen the sustainability potential of the girl effect on development.

At Davos, Nike's Parker explained: "By providing real economic-based opportunities for girls, the potential impact they have on their family, village, community, and, ultimately, their country is transformative. This has the ability to affect social stability, stimulate economic development, and really be one of the most powerful things we could be doing."

Helene Gayle, president and CEO of CARE agreed, adding that "educating girls yields some of the highest returns of all development investments." So did the World Bank's Okonjo-Iweala, who said: "Investing in women is smart economics. Investing in girls—catching them upstream—is even smarter economics."

The human rights and security of adolescent girls are also linked indirectly to supply chains, as electronic companies have recently recognized. The mineral tantalum, extracted from coltan ore in the eastern region of the Democratic Republic of Congo (DRC), is used in the production of portable electronic equipment, including mobile phones.

Electronics Industry Initiatives

Last week I attended a Women of Influence lunch at Britain's House of Lords. The topic was sexual violence against women and girls, used as a systematic means by rebels in the DRC to destroy local communities and gain control over natural resources such as coltan. Again, there are no reliable figures, but the U.N. estimates that 27,000 women were raped in DRC in 2006 and 45,000 in 2005. This is continuing despite the presence of a U.N. peacekeeping force.

The electronics industry, for its part, is working together through such organizations as GeSI (the Global e-Sustainability Initiative) and EICC (the Electronic Industry Citizenship Coalition), in collaboration with the DRC government, to support the establishment of a regulated Congolese coltan industry and prevent the unwitting purchase of illegal coltan associated with human rights violations.

The past decade has seen advances in commitments to action, but the measures are still insufficient. Here are five recommendations for global business:

Assess the implications for girls of how you source raw materials and other supplies. Do not turn a blind eye to human rights violations of women and girls within your supply chain and sphere of influence.

If girls are old enough—above the International Labor Organization's stated minimum age of 15—to work in your supply chains, ensure they have identification, fair and just conditions of work, support in education and training, mentors, and safe places to associate. Ask your social auditors to look out for their interests.

Ensure health facilities and educational materials are close at hand to reduce preventable diseases, such as HIV (many more girls than boys are infected in sub-Saharan Africa), protect maternal health, and support adolescent girls in their unique health needs.

Address trafficking and sex work in supply chains because girls are more vulnerable to infection by the highest-risk carriers of HIV, soldiers and truck drivers. Indeed, the Northstar Foundation and Maplecroft, supported by TNT (TNT.AS), have mapped HIV/AIDS prevalence over time and found infections increasing along transportation routes in Africa.

Use your influence to convince the development agencies and governments you work with that girls should get increased focus in development assistance.

Put girls at the heart of existing and new philanthropy efforts and social investment projects.

(You can find other ideas on www.girleffect.org in the Your Move toolkit.)

Girls and young women could be an important centerpiece of sustainable economic recovery—one that is worthy of innovative policy making on the part of business and governments alike. There are 600 million girls out there, after all. They just need to be seen, understood, and given a chance.


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