WEDF 2012: Parallel Session III-3

Increasing women business owners’ share of corporate and government procurement to meet development objectives
 
Ms Meg Jones, Programme Manager, Women and Trade, of ITC moderated the session and noted that unlocking corporate and government procurement for women-owned businesses is a way to use trade as a vehicle for development. Government procurement represents, on average, 15%-20% of GDP. Fortune 500 companies spend US$ 6m per day on indirect purchasing. Yet sourcing from women entrepreneurs is a largely unexplored area, although corporations and governments are beginning to unlock these significant opportunities.
The main conclusions of the discussion were:

• Strong linkages between foreign direct investment and the domestic private sector are necessary to promote local procurement, including procurement from SMEs especially women-owned enterprises.
• Women entrepreneurs and corporate buyers should be focused, flexible and unafraid to start small.
• Women have a great opportunity in high end, low volume and other niche markets.
• Women entrepreneurs can benefit greatly from open, fair government procurement processes. They should lobby their governments for reform to ensure transparency in procurement.

H.E. Ms Miata Beysolow, Minister of Commerce and Industry of Liberia, noted that her country’s public procurement policy supports open competition, guided by the principles of transparency, fairness and integrity. Liberia gives preference to local firms, particularly SMEs, which tend to be women-owned. The target of 25% sourcing from domestic firms has been set by the government. On the other hand the Minister noted that multinational corporations, which have invested US$16 billion in Liberia under-utilise opportunities to procure goods and services from local firms. The Minister said that although domestic procurement increases incomes and reduces poverty, the problem in part is that few local firms are capable of participating in the procurement process due to lack of information, skills and capacity. Liberia addresses these gaps through specialized training for women entrepreneurs and access to information on the needs of government and corporate buyers. Access to SME finance and equipment leasing is provided in partnership with the World Bank’s International Finance Corporation (IFC). The regulatory framework has been simplified to reduce the time it takes to start a business from 99 days to 48 hours.

Ms Monique Ward, Asia Pacific Director of Procurement at Accenture, manages a team of 100 procurement officers across 14 countries and an annual budget in excess of US$ 250m. She said that Accenture has a global commitment to supplier diversity, which is focused on women. She noted that procurement policy in a multinational context is about cost and value. Accenture has found that that the best value for money principle of procurement is not compromised by engaging women entrepreneurs whose companies are agile, innovative and are committed to sustainable development. She provided the example of Accenture in the Philippines, which sources non-soluble coffee from women vendors with the help of the country’s coffee board. The relationship was facilitated in 2011 through ITC’s Women Vendors Exhibition and Forum. Ms Ward ended by noting that there are plenty of challenges in engaging a multinational, but opportunities, particularly for sub-contracting, abound.

Ms Pacita Juan, President of the Philippine Coffee Board forged the relationship with Accenture Philippines to supply coffee produced by women entrepreneurs in an industry otherwise dominated by men. She explained that the country produces 25,000 tonnes of coffee annually but consumes 100,000 tonnes. She said that due to decreasing agricultural land, the industry is unable to increase the volume of coffee produced. At the same time, women can increase the sales value even at constant volumes by picking only ripe coffee beans, sorting quality beans and using wet processing. The initiative has spread to women producers in the cacao industry. Additional benefits of incomes earned go beyond women’s economic empowerment, to contributing to peace and security in Mindanao. Ms Juan said that Land Bank, the largest state-owned bank, now also buys the Women in Coffee label, following Accenture’s lead.

Mr Nicholas Niggli, Counsellor and Deputy Head of the WTO Division at the Permanent Mission of Switzerland to the WTO and EFTA, said that enabling women to enjoy the same rights as men was a key component of sound development. Reforming government procurement processes can play a key role in increasing women’s economic empowerment. If a country adopts open, transparent, non-discriminatory and fair procurement processes, this will reinforce the ability of citizens to access better public services, such as hospitals and schools and cut inefficiencies associated with closed systems, as less transparent systems typically benefit fewer firms. He said that the WTO Agreement on Government Procurement offers enormous opportunities for businesses, including women entrepreneurs, in developing countries, as it represents an alliance of 42 countries with US$1.7 trillion spend on procurement annually. The agreement takes the level of development of countries into account and is therefore not biased toward countries from the developed world.

Ms Dewi Novirianti, lawyer, Millennium Challenge Corporation, explained that the MCC Compact, a 5-year agreement between the US and Indonesian governments on green prosperity, nutrition and procurement modernization, will be implemented from January 2013. Indonesia had committed to embedding gender within its procurement policy framework, she added. Some of the key challenges the government is seeking to address include a lack of data to understand the different opportunities and constraints facing male and female vendors, lack of policy and capacity within government procurement entities to address gender concerns. Another issue is the relatively small size of women-owned enterprises, which makes it harder for them to access government contracts. The first steps to be taken included gender analysis on procurement regulation to understand gender gaps, a gender vendor survey and other data collection and capacity building activities, she said.

Ms Putri Kuswisnu Wardani, President Director of Mustika Ratu, an Indonesian company producing herbal and natural based cosmetics, pointed out that only one in ten entrepreneurs in the country are women. She said that although women have skills and ideas, the lack of women entrepreneurs is often a result of risk aversion, fear of attention and a perceived lack of support from family and networks. However, support is available through access to finance with special conditions for women, training and mentoring provided through women’s associations, she added. Ms Wardani described her company as an example of what women entrepreneurs can achieve in Indonesia: it was started by her mother in 1975 as a home business and now has seven separate brands, exports to over 20 countries and runs 18 spas worldwide.

Ms Jones closed the session by inviting interested parties to join the ITC-lead Global Platform for Action on Sourcing from Women Vendors at www.intracen.org/womenandtrade