Women Entrepreneurs Have What it Takes to Grow Post-Conflict Economies
Countries emerging from violent conflict face many problems including financial instability, unemployment, and restoring government services. Can strengthening entrepreneurship in such countries help address these unique challenges? And, how are women in post-conflict countries specifically equipped to benefit from entrepreneurship?
According to a paper by Gayle Tzemach Lemmon, senior fellow at the Council on Foreign Relations (CFR), entrepreneurship can be a “crucial tool in the reconstruction and stabilization of conflict-afflicted states.” The paper cites World Bank data which connects violent conflict to economic decline. In fact, 15 of the 20 poorest countries having engaged in conflict since the 1980s. And unfortunately, “40 percent of all post-conflict countries return to violent conflict.” How can countries end this destructive cycle? The paper suggests the risk of a return to violence can be “mitigated by implementing economic growth programs, particularly for entrepreneurs, in the immediate aftermath of war, since such programs work to address the underlying economic causes of conflict”.
For example, the CFR paper cites research from Iraq which showed that “labor-generating reconstruction programs can reduce violence during insurgencies, with a 10 percent increase in labor-related spending associated with a 10 percent decrease in violence.”
Photo courtesy of John Atherton via Flickr.
Case Study: Liberia
Liberia emerged from its civil war in 1996. The CFR paper shares that “between 1987 and 1995, it is estimated that Liberia’s GDP per capita fell more than 90 percent.” This was “one of the greatest economic declines since World War II, outstripping downfalls experienced in Afghanistan, Rwanda, Sierra Leone, and the Democratic Republic of the Congo.” However, by 2009, the country had rebounded from its conflict-generated economic collapse and “the International Monetary Fund named Liberia one of the fastest-growing African economies, with an annual GDP growth rate of 12.8 percent.”
What accounted for this increase in economic strength?
According to the CFR’s research, “more than 70 percent of postwar Liberian businesses are less than five years old, and out of the 183 economies surveyed by the International Finance Corporation in 2012, Liberia ranked in the top 20 percent (number thirty-five) in the ease of starting a business.” The government of Liberia has taken note of the importance of their country’s entrepreneurs and the Liberian Ministry of Commerce and Industry created a branch with a specific focus focused on small and medium enterprises (SME) businesses. In addition, the Liberian government created its first national policy plan on SMEs in 2011. When governments place an intentional focus on promoting entrepreneurship, those entrepreneurs and their companies can be a rising tide for economic gains country-wide.
Why Women Entrepreneurs?
Liberian women entrepreneurs, especially young women, have contributed to the economic growth of their country by becoming business owners. Women in Liberia are more likely to be self-employed than their male counterparts (69 percent versus 56 percent), although women are also more likely to work in informal sectors.
Those who have lived in a conflict area are likely to have developed skills that can help them if they consider starting a business. This includes their risk tolerance, ability to multi-task, and their adaptability. Women entrepreneurs in conflict areas, in particular, have the unique skills that lend themselves to entrepreneurship for a variety of reasons.
First, men are more likely to have engaged in the conflict. In contrast, women are more often bystanders to the violence rather than perpetrators. This allows them to develop trust with their fellow citizens and potential customers and investors. In post-conflict spaces, men can often still be viewed as less trustworthy. Women, on the other hand, can use their more neutral reputation to emerge as the new leaders.
Similarly, “women are often the ones left behind to support their families after their husbands and brothers went off to war and their ability to provide that support is crucial for survival of…entire communities.” For “countries struggling to alleviate post-conflict poverty [there is a] need to harness all human capital available to succeed, making entrepreneurship a means for overcoming traditional social barriers to women’s economic participation.”
Countries emerging from conflict have many obstacles to economic growth. Policies which focus on reducing barriers to entrepreneurship can help stimulate the economy by providing innovation, job growth, and a renewed economic purpose.