Daily Management Review

McKinsey: level of GDP of APR countries is below potential because of gender inequality


Last week, McKinsey Global Institute (MGI) released a report stating that due to gender inequality, the aggregate GDP of the countries of the Asia-Pacific region (APR) will miss $ 4.5 trillion by 2025. It’s about barriers that women in the region face in their employment, career growth, participation in political and public life, as well as physical and health security. The most negative effect is the gender inequality in such already poor countries of the Asia-Pacific region as Pakistan and Bangladesh. On the other hand, Australia and New Zealand are doing the best.

helpsg via pixabay
helpsg via pixabay
According to MGI experts’ estimates, successful struggle against gender inequality, more active involvement of women in labor relations, political and social life of the APR countries will have a significant impact on their economy. In this case, the aggregate GDP of the region’s countries by 2025 can grow by 12% compared to the current dynamics, or by $ 4.5 trillion, which is equal to the annual GDP of countries such as Germany and Australia combined. The maximum possible increase in nominal GDP is projected for countries such as China ($ 2.6 trillion) and India ($ 770 billion). MGI experts remind that combating gender inequality is important not only from the moral and social points of view, but also "gives a tangible growth of material dividends".

The study examines four areas where gender disparities affect the economy: women's employment, work conditions and wages, participation in public and political life, and women's physical security. The situation with employment is the worst of all: gender inequality negatively affects the economy in 58% of countries in the region.

In 25% of countries, experts noted gender discrimination when hiring in sectors with increased labor productivity. To assess the "labor" parameter, MGI used a gender parity coefficient of 15 indicators. The maximum value of this coefficient is 1. On average, experts rated this figure at 0.56 in the Asia-Pacific region, which is lower than the world average - 0.61.

The situation differs significantly across the countries of the region. In terms of gender equality, New Zealand, Singapore and the Philippines have almost no problems with women employment. On the other side of the spectrum are Bangladesh, India, Pakistan, Japan and South Korea. Speaking about China, the researchers note good indicators in the field of women's general employment, but at the same time rather high gender barriers for women occupying high positions in both companies and in public and political life.

In terms of gender equality in public life, the highest rates went to Australia, New Zealand, Singapore and the Philippines - largely due to the developed education systems, social welfare of young mothers, reproductive health, legal protection and political representation. At the other end of the scale, according to this parameter, are countries such as Bangladesh, India, Nepal and Pakistan.

Speaking about physical safety and financial independence of women, MGI notes problems around the world, including in the countries of the Asia-Pacific region. At the same time, experts admit that the countries of the region have made significant progress in this regard over the past ten years thanks to economic growth, government measures, technological changes and activists. Thus, maternal mortality and the gender gap in education declined in Bangladesh, Cambodia, India and Nepal. In a number of countries (Bangladesh, India and Sri Lanka), the participation of women in paid work for the same period declined.

Experts explain this with the following paradox: the growth of incomes of the population led to the fact that women began to work less and engage in household activities more often.

To sum up, MGI experts note that in order to reduce gender barriers, local authorities, social activists, business and ordinary citizens can direct their efforts along five promising lines: to promote more active participation of women in paid work; to solve problems related to low representation of women in high positions in business and politics - to put them more actively in these positions and not to impede promotion; increase education for greater access to digital technology; change attitudes towards women, adopted in countries with a traditional, patriarchal society; to work more closely together at the regional level to share experiences on combating gender inequality.

source: mckinsey.com

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