The war in Ukraine could not have come at a worse time, eroding global economic prospects as much of the world struggles to emerge from the COVID-19 pandemic. Among the immediate impacts of the war has been the surge in commodity prices, raising concerns over food and energy security.
This is bad enough, but high commodity prices have broader implications. It is likely to exacerbate debt and other fiscal challenges in many emerging and developing economies, especially those who rely on imports. Pressures for food and energy subsidies, trade protectionist measures and price controls may grow, further adding to fiscal costs.
We cannot afford to let this happen. First and foremost, we must collectively avoid counterproductive policies, keep trade open, and support vulnerable households. While responding to urgent needs, we must also stay the course, protect the fundamental drivers of growth and enable countries to move towards green, resilient and inclusive development.
In a sea of sobering news, this is where I see encouraging signs in the MENA region. During a recent visit to Dubai and Cairo, I was deeply inspired by the women leaders I met– an architect, working on green and environmental buildings, a businesswoman driving the digital transformation, a community builder supporting entrepreneurs.
This means over half of women in developing countries see entrepreneurship as a path to a better future, compared to 25% in high-income countries. Support for the growth of women-led businesses is critical, especially in low-income countries and countries affected by fragility and conflict.
We-Fi), and focused on sustainable products reducing textile waste, managing to triple her revenues in the last year.She was able to access some financing from a venture capital fund supported by the World Bank’s International Finance Corporation (IFC) and the Women Entrepreneurs Finance Initiative (
But women worldwide still face significant practical and regulatory barriers to becoming successful entrepreneurs, according to the Women, Business and the Law report. As Fatma experienced, lack of access to financing is probably the biggest constraint women-led businesses face, leaving them with an estimated US$1.7 trillion of unmet demand for credit. Collateral constraints and social norms are major reasons for this gender credit gap. Increasing women’s control over finances by combining access to bank accounts with skills training can help shift conservative social norms and increase women’s opportunities.
Here too, a positive trend is growing in the MENA region.broad-based access to finance is important, so small businesses can invest and create jobs.Working toward improving
As the pandemic has shown, digitalization can help business owners become more resilient, while digital finance can play a critical role in enabling access to finance and fostering new economic opportunities. Given its potential, the World Bank launched a toolkit that specifically looks at how digital solutions can help address barriers to female entrepreneurship. It aims to help women businesses operate more effectively by improving their knowledge of legal and regulatory provisions and facilitating access to finance and credit tools, training, skills, information, and new markets.
Reforms to accelerate equality must not take a back seat. Besides being the right thing to do, gender equality makes economic sense. The world will need women to work as equal partners with men to tackle the challenges that lie ahead.