65282 OCTOBER 2011 Empowering Women Entrepreneurs through Center for Legal Reform and Business Associations International Private In 2010, Pakistan ranked 133 out of the 134 countries evaluated by the World Enterprise Economic Forum’s Global Gender Gap Report on economic participation and ABOUT THE AUTHORS opportunity for women—lower than Saudi Arabia and ahead only of Yemen. ANNA NADGRODKIEWICZ This jarring gender gap is also evident in national data. Women account for is a Program Officer for Global Programs at CIPE, where she 52 percent of Pakistan’s population, yet only 3 percent of them work in the works on projects involving democratic and market-orient- formal sector, according to the Federal Bureau of Statistics. One important ed reform around the world. Prior to joining CIPE, Anna reason for women’s absence in economic activities has been the lack of worked as a business women’s business organizations. This SmartLesson shares what we at the consultant in her native Poland on the issues of competitive- Center for International Private Enterprise (CIPE) learned from our work to ness and market entry in Central and Eastern Europe. promote women’s participation in business associations and the creation of HAMMAD SIDDIQUI women’s chambers of commerce in Pakistan. is a Deputy Country Director of the CIPE Pakistan office. An expert in chamber of commerce and business Background association development, he was instrumental in capacity Many chambers of commerce exist in Pakistan, transparent elections and the appointment building of women’s chambers in Pakistan. Hammad has also but their membership is predominantly male. and development of professional management worked as a trainer in business According to the 1961 Trade Organizations within all trade bodies. Crucial for women, the association management Ordinance governing the formation and new regulation required that regional throughout South Asia. Prior to operation of chambers and associations in chambers include women on their boards. It joining CIPE, he was Head of Pakistan, women entrepreneurs could not also allowed for the creation of women’s Commercial Section at the British Deputy High Commis- form their own chambers uniquely suited to chambers, which introduced a healthy sion in Karachi. their needs. competition between women’s and mainstream chambers over attracting new APPROVING MANAGERS In 2006, when CIPE began its work in Pakistan, members. Moin M. Fudda, Pakistan we started a dialogue with the Federation of Country Director, CIPE; Aleksandr Shkolnikov, Director Pakistan Chambers of Commerce and Industry The results showcase the resourcefulness and for Policy Reform Programs, CIPE. and the Ministry of Commerce to reform the determination of Pakistani women outdated law. The Ministry created a six- entrepreneurs. There are now over 60 female member committee to recommend changes board members in regional chambers, and through a consultative process and invited eight women’s chambers have been registered, CIPE Pakistan to participate. Upon our including some in conservative areas such as recommendation, committee members Mardan, Peshawar, and Quetta—regions traveled across Pakistan and met with more generally regarded as challenging for women’s than 150 representatives from various rights. chambers and sectoral associations. Based on this input, the new Trade Organizations These chambers are proving to be an effective Ordinance was drafted and then enacted by a means of supporting women entrepreneurs. Presidential Order on December 31, 2006. Their work and the relationships and role models they are establishing give women at This law enhanced freedom of association and the grassroots level a network and a voice to created new governance mechanisms for start closing the gender participation gap in chambers and associations. It also mandated Pakistan’s economy. SMARTLESSONS — OCTOBER 2011 1 Lessons Learned Lesson 1: Focus on gaps in the legislative framework to address structural barriers to women’s participation. Lack of proper legislation can be a huge hindrance to participation of women in business. This was clearly the case in Pakistan, where the outdated 1961 Trade Organizations Ordinance did not correspond to the modern business environment and did not reflect the true voice of entrepreneurs, especially women. CIPE engaged women from across Pakistan in a policy dialogue on barriers they face. Those discussions revealed that the lack of gender-focused business organizations and weak representation of women in existing chambers Board members from women’s chambers collectively creating of commerce helped explain low participation of women advocacy messages at a CIPE workshop in Islamabad. in the economy. The enactment of the 2006 law was thus an important step in the economic empowerment of women. “[Women entrepreneurs need their own voice], because otherwise Yet, changing the law was not enough. Sustained efforts no one takes women seriously — their issues are not presented or were necessary to ensure that the Ordinance was addressed in a male-dominated chamber.� implemented in practice and that, once formed, women’s Fitrath Ilyas Bilour, chambers would have the leadership and capacity to govern Peshawar Women Chamber of Commerce themselves and effectively address their members’ needs. When asked why they believe women’s chambers are such One serious challenge that we encountered in this work was effective vehicles for women’s advancement, many women that most women entrepreneurs in Pakistan do not have entrepreneurs who earlier belonged to mainstream registered businesses. The old rules specified that having a chambers say that despite their extensive business national tax number — that is, being a formally registered experience they were not treated as equal members. business — was a condition for membership at any chamber. Belonging to dedicated women’s chambers, they can now The updated law now allows women entrepreneurs to enjoy equal status and put forward their agenda. become members as individuals, based on their national ID cards. Lesson 3: Make advocacy a key part of the value proposition that a women’s organization brings to its To help such women entrepreneurs, CIPE published a members. Pakistan-specific guide, with practical advice on starting and growing a business, and continues to support the An often underappreciated aspect of a successful chamber’s development and operations of women’s chambers across mission is policy advocacy. It is particularly crucial in Pakistan, the country. However, the larger challenge of bringing where the voice of women entrepreneurs for a long time more women into the formal sector remains. remained unheard. Lesson 2: To achieve a multiplier effect, empower Typical services that business organizations offer members women through business organizations. include professional development, market research, and trade promotion. Women’s chambers are no different and Many development programs focus on individual women help their members through various training sessions, and on challenges in their daily lives. Although important in exhibitions, and trade delegations, or through assistance their own right, those programs tend to see women as with obtaining credit and taking advantage of government- victims rather than as active change agents with power to sponsored programs. transform not just their own circumstances but also the future of their countries. Voluntary membership business Public policy advocacy is another crucial service. In addition organizations such as chambers of commerce can multiply to removing systemic barriers that affect all women the impact of investing in women entrepreneurs, because entrepreneurs — not just chamber members — advocacy they leverage the power of association. also establishes a collective identity for women entrepreneurs in the political landscape. They become a Women from diverse sectors — banking, pharmaceuticals, constituency, a force to be reckoned with. agriculture, manufacturing, handicrafts, information technology, media, education, and many others — belong “We have our own chamber now — government officials and to the Pakistani chambers today. As individuals, they were different institutions take us more seriously.� just business owners making their living; working together Aneela Iftikhar, through chambers, they are now collectively a voice of the President and Founder, female business community in Pakistan. South Punjab Women Chamber 2 SMARTLESSONS — OCTOBER 2011 The South Punjab Women Chamber, for example, is negotiating with the State Bank of Pakistan for the provision of collateral- free loans up to 500,000 Pakistan rupees (approximately $5,800) for women entrepreneurs. The chamber is also advocating better regulations for commercial banks that would facilitate such loans. On a national level, women’s chambers became a strong voice advocating for changes in the country’s SME (small and medium enterprise) policy. The reform process is still ongoing, but it is already of great significance: for the first time in Pakistan, such reform suggestions came from women. Lesson 4: Work with women across the country, Board and staff members from Peshawar Women including conservative or rural areas, to provide positive Chamber of Commerce & Industry at a CIPE workshop role models. on strategic planning and membership development. All too often, women’s empowerment projects that are focused on business and entrepreneurship never venture beyond the issues related to women entrepreneurs. Through CIPE’s grant capital city or commercial centers. Yet, women living in more program, we are also helping chambers with basic remote areas are the ones most in need of assistance when it infrastructure problems, such as access to electricity. comes to honing their business skills and learning about the benefits of association. It has been CIPE’s experience in Pakistan “We feel that we are fighting for the cause of women who have not that, even in rural and conservative areas, women can be been afforded an opportunity to participate in the economic life of successful entrepreneurs and organize themselves. the country. . . . The creation and existence of a legal body representing them has given a lot of encouragement to the women Registered in July 2007, the Central and North Punjab confined to houses, who were the victims of harsh traditions.� Women Chamber of Commerce and Industry (CNPWCCI), located in Lahore, was the first women’s chamber in the Ambreen Khan Hoti, country. Today, seven other such chambers exist, not only in President, Mardan Women Chamber Islamabad but also in conservative districts of Mardan, Multan, Peshawar, and Quetta. Lesson 5: Engage men in women’s economic empowerment. All those chambers provide positive role models of successful female entrepreneurs, encouraging others to Women entrepreneurs in Pakistan often lack business join and the next generation of women to consider awareness and know-how, and they face social entrepreneurship as a career path. CNPWCCI, for instance, constraints that make it difficult to start and run a makes recognizing outstanding local business women a business. The first step—and often the most serious key part of its activities through an annual award ceremony obstacle—for women entrepreneurs starts at home with and a series of educational and social events. In January fathers, husbands, and brothers. Men’s better 2011, Shehla Javed Akram, President of CNPWCCI, became understanding of the value in their daughters, wives, Vice President for Women Entrepreneurs at the Federation and sisters pursuing business ventures, and support for of Pakistan Chambers of Commerce and Industry, testifying such initiatives, is key for aspiring women entrepreneurs. to CNPWCCI’s accomplishments and clout. This is an often overlooked lesson. Many challenges remain when it comes to providing Chambers of commerce and associations provide a platform positive role models and building sustainability of women where women can come together to address such business organizations. For example, there is a dearth of challenges. The Women Chamber in Quetta, for instance, leadership capabilities in women’s chambers. Training teaches its members how to explain to their male family programs run by various nongovernmental organizations members the benefits of women engaging in and donor agencies for women’s chambers are typically entrepreneurship. Those women, through their affiliation not conducted by chamber specialists, providing limited with the chamber, derive encouragement from the fact benefit to the participants. Women’s chambers, especially that they are not alone. in less affluent areas, also face cash flow issues because of limited membership that is not growing fast enough. Their “Initially, most challenges to women entrepreneurship come from staffs are usually underqualified, because they cannot our households. In order to overcome them, we are creating afford to hire professionals, and their office facilities are ill marketing platforms and opportunities where we can present our equipped. work.� To help address these challenges, CIPE is using a two-pronged Fehmida Kuasar Jamali, approach. We engaged the leadership of women’s chambers Executive Director, in capacity-building programs and consultative discussions on Quetta Women Chamber SMARTLESSONS — OCTOBER 2011 3 Male support for the formation of women’s institutionalized. From a legislative chambers is also crucial, especially in perspective, it should become a Parliament- conservative areas. For example, the vision ratified, permanent legal act. for forming a women’s chamber in Mardan came from Haji Naseem-Ur-Rehman, a Certain improvements in the law itself can prominent local industrialist and founder of also be made. For instance, the 100-member the Mardan Chamber of Commerce. The requirement for forming a local chamber is promulgation of the 2006 Trade Organizations too high in many areas with few women Ordinance inspired him and other likeminded entrepreneurs. Nonetheless, their chambers people — men and women — to work give Pakistani women a vehicle for working together toward establishing a women’s with policymakers on addressing concerns chamber. As a result of these efforts, Mardan related to the business environment for Women Chamber was created in 2010. women entrepreneurs. Similarly, Chairman of the Senate’s Standing “The key is to sustain our chamber and to keep Committee on Commerce and Head of moving it forward. This is not the end. This is just the Khyber Pakhtunkhwa Chamber of Commerce beginning.� Ilyas Ahmad Bilour was instrumental in the Samina Fazil, formation of Peshawar Women Chamber, President and Founder, inaugurated the same year. Islamabad Women Chamber Another way in which men’s support has As women’s chambers in Pakistan grow and been crucial is through Women Resource mature, the key to their sustained success will Centers dedicated to the needs of women be good governance and leadership entrepreneurs. Such centers, created at the development. Sound decision-making chambers at Lahore (in 2008) and at Sialkot mechanisms must be put in place to ensure (in 2009), provide venues for women the chambers’ vitality and longevity, with the entrepreneurs to discuss opportunities and issue of leadership succession being of challenges. They also function as secretariats particular concern. for business activities, provide training programs, and help address issues such as Another overarching challenge is widespread access to credit. As parts of larger, established informality. Many women-owned enterprises chambers, the centers also give women an remain unregistered and, although chambers outlet for advocacy on national-level policies. encourage them to do so and offer legal help, the cost and bureaucracy involved in Conclusion registration and the fear of harassment by tax officials discourage entrepreneurs — men and Since the enactment of the 2006 Trade women alike — from formalization. CIPE will Organizations Ordinance, women continue working to address those issues by entrepreneurs in Pakistan have accomplished helping Pakistani women’s chambers play many big and small successes—from local an active role as the voice of women artisans being able to better market their entrepreneurs. goods; to the Sahiwal Chamber electing its first woman president; to the Federation of Pakistan Chambers appointing its first female vice president. In many conservative areas, DISCLAIMER the mere existence of women’s chambers is a SmartLessons is an awards huge success. program to share lessons learned in development-oriented advisory The benefits go beyond women services and investment operations. The findings, entrepreneurs and extend to Pakistan’s interpretations, and conclusions economy as a whole. The new regulation expressed in this paper are those makes the operations of all chambers and of the author(s) and do not business associations more transparent and necessarily reflect the views of IFC or its partner organizations, the promotes competition among those Executive Directors of The World organizations, raising the quality of services Bank or the governments they they offer their members and helping represent. IFC does not assume improve Pakistan’s overall governance and any responsibility for the business climate. completeness or accuracy of the information contained in this document. Please see the terms That said, the space for women entrepreneurs and conditions at www.ifc.org/ created by the 2006 Trade Organizations smartlessons or contact the Ordinance still needs to be fully program at smartlessons@ifc.org. 4 SMARTLESSONS — OCTOBER 2011