World Economy

IMF’s Lagarde: 3.5b Reasons Why Gender Equality Matters

IMF’s Lagarde: 3.5b Reasons Why Gender Equality MattersIMF’s Lagarde: 3.5b Reasons Why Gender Equality Matters

International Monetary Fund's chief Christine Lagarde said on Sunday that India's gross domestic product can grow by a massive 27% if the level of female workforce becomes equal to that of male in the country.

The positive impact from gender parity in the workforce on the Indian economy will be much higher compared to impact on the world's major economies likes the US and Japan.

"For example, we have estimates that, if the number of female workers were to increase to the same level as the number of men, GDP in the United States would expand by 5%, by 9% in Japan, and by 27% in India," NDTV Profit quoted Lagarde as saying.

Speaking at an event to launch W20, a group of women leaders from the world's 20 largest economies including India, Lagarde said: "it is an absolute economic no-brainer that empowering women boosts economic growth."

"These estimates, while of course tentative, are significant and large enough to be taken seriously. This applies particularly to countries where potential growth is declining as the population is ageing," she added.

She stressed that men have a significant role to play in empowering the women, while quoting Nobel laureate Amartya Sen: "Women are increasingly seen, by men as well as women, as active agents of change–the dynamic promoters of social transformations that can alter the lives of both women and men."

Reducing Gap

Pointing out the pledge taken at G20 in November, which aimed at reducing "the gap in women's labor force participation by 25% by 2025," Lagarde said that it would help in generating an estimated 100 million new jobs in the global economy.

"That was the promise of 2025. Today, I want to focus on how to deliver on that promise... By the latest estimate, there are more than three and half billion reasons why gender equity matters," she said.

Placing women in "secure and well-paid jobs" increases the overall per capita income of a particular country, Lagarde added.

"For Turkey, it has been estimated that gender parity in employment could increase per capita income by 22%. The same kind of gains are also possible for many other countries," she added.

WEF Ranking

The World Economic Forum has ranked India globally towards the lower end on most of the parameters indicative of inclusive growth and development, although the country fares much better on the scale of business and political ethics, IANS reported.

India has mostly been ranked in the bottom half of the 38 countries that make up our lower middle income bracket, in the first such global rankings issued by the Switzerland-based think tank.

Areas where India ranks low include fiscal transfers, where it ranks 37 out of 38, on "tax code" at 32nd, and 36th on social protection.

WEF said another area that policymakers in India would need to prioritize improvement would be "asset building and entrepreneurship", especially in the sphere of "small business ownership", where India ranks at the bottom at 38th place.

India ranks 12th in business and political ethics, while it ranks 11th on the "financial intermediation of real economy investment pillar", which is an indicator of the fact that money invested in the economy generally gets directed towards productive uses.

Ranking countries in terms of their per capita income levels, the WEF found that most countries are missing major opportunities to reduce income inequality, which is also the case with India.

"Our message is unequivocally that leaders must pursue economic strategies that are at the same time pro-growth and pro-labor," WEF, which organizes the noted economic conclave in Davos, Switzerland, said while releasing the report.