ReportNo.32259-YEM Republic ofYemen Women in Local Economic Development -Aden December6,2005 Water,Environment,SocialandRuralDevelopmentDepartment MiddleEastandNorthAfricaRegion DocumentoftheWorldBank REPUBLIC OFYEMEN WOMEN INLOCAL ECONOMICDEVELOPMENT .ADEN Table of Contents PageNo . EXECUTIVE SUMMARY .................................................................................. i 1 INTRODUCTION . ............................................................................................ 1 Background and Context for the Study............................................................. 1 Rationale and Objectives o fthe Study.............................................................. 2 MainFindings: DecliningRole of Womeninthe Economy ............................ 2 Aden and its Dynamic History.......................................................................... . . 3 Overview o fMainEconomic Sectors inAden andWomen's Role ................ 4 Research Methodology ..................................................................................... 5 2 WOMEN INTHE LABORFORCE . .............................................................. 8 Women inthe Civil Service.............................................................................. 8 Women inPublic Enterprises............................................................................ 9 Women inMixed andPrivatized Enterprises ................................................... 10 Women inPrivate Sector .................................................................................. 11 WomeninLargePrivate Enterprises ................................................................ 12 WomeninSmall Private Enterprises ................................................................ 13 Women-Owned Businesses .............................................................................. 14 Women inthe Informal Sector.......................................................................... 14 Conclusion ........................................................................................................ 16 3 LOOKINGAHEAD: ENSURINGGENDER EQUITY INPOLICIES AND . INVESTMENTSTHROUGH FURTHER RESEARCH .................................. 19 BIBLIOGRAPHY ................................................................................................. 22 TABLES: Table 1: Typology ofMainEconomicSectorsinAden........................................ 5 Table 2: PercentageofWomenEmployeesbyEducationalLevelwithin EachSector .............................................................................................. 10 Table 3: WomenandEmploymentinAden: KeyVariablesAcross Institutional Types .................................................................................. 17 Table4: WomenandEmploymentinAden: PolicyIssuesbyEnterpriseTypes.. 18 Table 5: Some ExamplesofPotential Areas for FurtherResearch....................... 21 FIGURES: Figure 1: TotalEmploymentby OwnershipSector............................................... Figure2: FemaleEmploymentby OwnershipSector............................................ 4 Figure3: Male Employmentby OwnershipSector............................................... 5 5 ACKNOWLEDGMENTS The work for this paper was carried out by a team consisting o f Meskerem Brhane (Task Team Leader, Social Development Specialist, MNSRE), Helen Lackner (Consultant), Carmen Niethammer (Operations Officer, MNSED) and Michael Robbins (Consultant). Michael Robbins was responsible for the data analysis and report preparation. Helen Lackner produced a background paper based on a study she designed and field research undertaken in Aden with a team o f local researchers consisting o f Huda Mahfouz, Maha Abdul Latif a1 Ban and Shatha Sultan Ahmed. Josephine Salang (MNSRE) provided editorial support. In Aden, Mohammed Zemam (Director, Port Cities Development Program) and the Governor of Aden, Dr. Yahya al- Sha'ibi, provided invaluable support to the research. Mr. Ahmed Hadi Salem, Director o f the Aden Chamber o f Commerce and Industry facilitated the team's access to the Adeni business community. Manymanagers andworkers inthe public and private sectors sharedtheir views and experiences. enriching the study. Stephen Karam (Senior Urban Economist, MNSIF) also provided support and guidance. Peer reviewers were Nadereh Chamlou (Advisor, MNSED) and John Speakman (Lead Private Sector Development Specialist, MNSIF). The Sector Manager was Luis Constantino and Sector Director was Inger Andersen (MNSRE). This work was supported by GENFUND, a trust fund financed by the Norwegian and Dutch governments to mainstream gender into the Bank's work. EXECUTIVESUMMARY Adeni women, historically active in the workforce, are gradually losing their foothold in the formal economy. As the economy shifts from public sector-led development to a free market, public enterprises are increasingly becoming privatized and the percentage o f women employees i s decreasing. The emergent private sector is not creating enough new jobs to provide work for all women who desire it. Constraints on women's employment are reinforced by changing cultural ideologies. In addition to transformations in the economy, Adeni society i s also experiencing transformations in ideology. The collapse of the socialist system has meant the discontinuation of the state's policy o f actively employing women. At the same time, unification and the opening up o f the economy have brought investors to Aden from other parts o f Yemen and abroad. These now hold a large proportion o f the capital in the private sector. With their financial investment, they have also brought attitudes and ideologies that reflect a more conservative vision o f the role o f women in society. New types o f social norms are becoming established, such as the belief that it i s inappropriate for women to interact closely with menwho are non-relations. Laws and regulations that are meant to protect women may actually reduce their access to employment. For example, laws which protect women from working late hours or require the provision o f child care centers ifa certainnumber o f women i s employed make it more costly for the private sector to hire women rather than men. These and other constraints are occurring at a time when poverty is worsening in Yemen and women are resorting to the informal sector as a coping strategy. While many women are active inthe informal sector, they have little accessto legal and social protection andearn substantially less than they would inthe formal sector. Paradoxically, men in management positions acknowledge that women have good qualifications and are conscientious and productive workers. This attitude reflects an opportunity for expanding women's work inthe private sector. The paper calls for raising public awareness on women's weakening economic position and identifies areas for furtherresearch for evidence-basedpolicy-making. - 1 - WOMEN INLOCAL ECONOMIC DEVELOPMENT ADEN - 1. INTRODUCTION 1.1 Yemen i s undergoing significant political and economic transformation which has significant implications for women's employment. The Republic o f Yemen (ROY) was established in 1990 with the unification o f the Yemen Arab Republic (YAR) inthe north andthe People's Democratic Republic o f Yemen (PDRY) in the south. The north had a market-based economic system, although the state played an important role in the economy through public enterprises. The majority o f the population relied on subsistence agriculture with coffee and eventually qat (an amphetamine) as important cash crops. The south's economy was based on a socialist command-and-control system where the state established public enterprises and made significant investments in the health and education sectors. During the 1970s and 1980s, remittances from migrant workers in the Gulf and oil production in the 1990s were important sources of revenue. With unification, the country i s integrating these two systems into a market economy. 1.2 This study focuses on the port city o f Aden, commercial center o f Yemen (and former capital of the PDRY) and examines women's current employment activities across the economy inorder to provide an understanding ofhow these changes are affecting them and suggest ways for ensuring that they too benefit from new economic opportunities. Educatedwomen inYemen aspire to participate actively in the formal labor force as entrepreneurs, investors and producers intheir own right, castingaside the traditional image ofwomen as restrictedto the home. Given the great human resource potential o f women in Yemen (who are in increasing numbers graduating from universities), women's employment and entrepreneurship is not only important for the country's economic development but also for promoting social integration. Backgroundand Contextfor the Study 1.3 The study was developed within the context o f the Port Cities Development Program in Yemen which has supported the governorate o f Aden in preparing a Local Economic Development Strategy. The Port Cities Development Program aims to transform strategic port cities into regional centers o f economic growth. It does so by strengthening the local governments' strategic, financial and physical planning and coordination capabilities to better utilize existing assets and resources first inAden and then inAl-Mukallah andHodeidah. It will streamline administrative procedures related to private sector activity and improve access to and the reliability o f select infrastructure facilities and services in the governorate o f Aden. By removing obstacles facing would-be investors, including an obstructive regulatory environment and overburdened infrastructure facilities, the Port Cities Development Program seeks to facilitate investment and the creation o fnew employment opportunities. 1 1.4 The efforts to revitalize Aden's economy began in 2003 with a City Development Strategy (CDS), a participatory process which brought together key stakeholders in the city. These included men and women inpublic andprivate sectors, local government, civil society and academia. One key objective identified in the strategy i s enhancing women's employment, especially in the small enterprise sector. During the CDS workshops, women participants emphasized that women inAden have lost some ground over the past decade and that they have seen their economic opportunities and public roles diminish. This sentiment was based on anecdotal information as the role o f women in the economy was largely unknown. This study provides the first quantifiable analysis o f women's employment inAden today. Rationaleand Objectivesof the Study 1.5 The purpose o f the study is to provide decision-makers in Aden, especially those responsible for implementing the CDS, with an analysis o f women's economic role so that policies are designed which ensure women at all economic and social levels benefit more equitably from employment opportunities. 1.6 Structure of the report: The study analyzes the role o f women in the full spectrum o f Aden's economic sectors -private andpublic enterprises, civil service and the informal sector. Main Findings:DecliningRole ofWomen inthe Economy 1.7 Adeni women, historically active in the workforce, are gradually losing their foothold in the formal economy. As the economy shifts from public sector-led development to a free market, public enterprises are increasingly becoming privatized and the percentage o f women employees i s decreasing. The emergentprivate sector i s not creating enough newjobs to provide work for all women who desire it. 1.8 Constraints of women's employment are reinforced by changing cultural ideologies. In addition to transformations in the economy, Adeni society i s also experiencing transformations in ideology. The collapse of the socialist system has meant the discontinuation of the state's policy o f actively employing women. At the same time, unification and the opening up o f the economy have brought investors to Aden from other parts o f Yemen and abroad. These now hold a large proportion o f the capital in the private sector. With their financial investment, they have also brought attitudes and ideologies that reflect a more conservative vision o f the role o f women in society. New types o f social norms are becoming established, such as the belief that it i s inappropriate for women to interact closely with men who are non-relations. 1.9 Laws and regulations that are meant to protect women may actually reduce their access to employment. For example, laws which protect women from working late hours or require the provision o f child care centers if a certain number o f women i s employed make it more costly for the private sector to hire women rather than men. 2 1.10 These and other constraints are occurring at a time when poverty is worsening in Yemen and women are resorting to the informal sector as a coping strategy. While many women are active inthe informal sector, they have little access to legal and social protection and earn substantially less than they would inthe formal sector. 1.11 Paradoxically, men in management positions acknowledge that women have good qualifications and are conscientious and productive workers. This attitude reflects an opportunity for expandingwomen's work inthe private sector. The paper calls for raising public awareness on women's weakening economic position and identifies areas for further research for evidence-based policy-making. Aden and its Dynamic History 1.12 Aden's strategic location led to its expansion and development. Located at the convergence o f several trade routes, untilthe late 1950s, Aden was one o f the largest ports inthe world, second only to New York. Under Britishoccupation from 1839-1967, it evolved into an economically vibrant and large cosmopolitan city. It became the capital o f the People's Democratic Republic o f Yemen (PDRY) after independence in 1967. For the next two decades, the PDRY pursued a development strategy that emphasized state-led development through large public sector enterprises. In 1990, with the collapse o fthe Eastern Bloc, the PDRY and the YAR to its north, unified. Four years after unification, political rivalry led to a short civil war. Although this damagedthe economy, the city has now largely recovered. 1.13 The role of women in the economy increased in the 1950s and 1960s. Beginninginthe 1950s, Adeni women began to play an increasingly visible role in the city's economy. Under British occupation, schools and vocational institutes for women were founded, especially in health and education for the elite and domestic services for the working classes (graduates were employed in childcare and housekeeping for the Britishcommunity and the elite). The colonial government also established a women's "Employment Exchange" unit and was responsible for job placement. 1.14 During the socialist period, women's status improved. The regime placed a high importance on promoting women's access to education, especially in universities. During the early seventies, nearly one third of working age men migrated to the Gulf countries creating a demand for labor which women were able to fill. The Government hrther expanded public services in health and education which women were well positioned to assume. Many state-run factories were established and the state made conscious efforts to recruit women factory workers, especially those with low skills and limited education. Although the work was tedious, labor intensive and wages were low, they provided a secure position for large numbers o f unskilled women. Legislation also promoted a greater equality between men and women. Under the law o f the time, men and women were guaranteed equal opportunities and other legal protections. The law also accorded men and women equal rights over their children and gave women the right to seek a divorce. While reality andthe law often diverged, winning these juridical rights was an important step for women inYemen. 3 1.15 Many of the legal protections of women have been weakened since unification. The new constitution, unlike the old, does not contain explicit protections for women. In addition, women are less encouraged to join the workforce than they were under the socialist regime. Working women face more constraints and are given fewer opportunities to participate in the formal labor market than duringthe socialist period. Overview ofMainEconomicSectorsinAden andWomen's Roles 1.16 Although interms of geographic area Aden is the smallest governorate inYemen, it is the commercial capital o f the country. Moreover, private entrepreneurship is growing more quickly than in other governorates. As a holdover from the socialist period, the largest employer remains the public sector, both in terms o f the civil service and state-owned enterprises. The private sector remains quite small and no data on its share o f economic output are currently available. The activities o f the private sector in order o f priority are: (i) fisheries; (ii) shipping and handling; (iii) oil transportation and refinery; (iv) general consumer goods and retail activities; (v) tourism; and (vi) activities inthe free zone. FIGURE 1 Total employment by ownership sector E Rivate Source: Statistical Year Book, 2003, Republic of Yemen. 1.17 Only 12 percent of working women in Yemen as a whole are employed in the non- agricultural sector. The highpercentage o f Adeni women inthe formal labor force (21 percent), therefore, makes Aden an exception. The vast majority o f these women (approximately 93 percent) work in the public sector (in civil service or state-controlled enterprises) compared to only 6.0 percent o f women in Yemen overall.' These women mostly work in the social sectors such as education, health and public administration which together account for 66.7 percent of Adeni women's employment. This sector provides more gender equal employment opportunities than elsewhere in the country. For instance, women account for 55 percent of employees in education compared to 18 percent for the country as a whole. The remaining 7 percent o f women working in Aden's formal sector are employed inprivate enterprises.' National data o f this kind * National 'ILO 2003. Statistics Year Book for 2002. 4 are in aggregate and tell us nothing about the types o f work women perform, their educational levels, or their earnings as compared to their male counterparts. This study provides data and analysis o f these variables in order to better inform policy in furthering women's economic opportunities. Female employment by ownership sector Male employment by ownership sector Rivate w Rivate I I I I Source: Source: Statistical YearBook, 2003, Republic of Yemen Research Methodology 1.18 The central research question in this study is how changes in the economic structure might affect women differently. A typology o f the main economic sectors in the city was mapped out and trends analyzed along the following key variables: (i) percentage o f women employees; (ii)education status; (iii) employment position; (iv) remuneration levels; and (v) attitudes o fmanagers and employees. Table 1: Typology of Main Economic Sectors inAden ORMAL INFORMAL Public Sector Transitional Sector Private Sector Public Mixed Recently Privatized Large Enterprise Small Informal Enterprises Enterprise Enterprise Factories Factories Manufacturing Manufacturing Restaurants Food schools (textiles, oil (cigarette, (flour, soft (flour mill, Shops processing Public refinery) rubber) drinks) cement factory) Hotels Needlecraft hospitals Printing Hotels Phone and Beauticians presses internet Retailing Shipping kiosks Transport services I Travel agencies Carpenters and welders garages 5 The analysis that follows is primarilybased on the results o f formal and semi-formal surveys and questionnaires that have beenprepared specifically for individuals ineach o f the above sectors. 1.19 Interviews and meetings with staff from large and medium enterprises were held on the premises o f the enterprises. The individuals interviewedwere managers or their deputies, or the individuals responsible for decision-making at the institutional level. In the case of small establishments, all o f the female employees present were interviewed. For large enterprises with numerous female employees, volunteers were interviewed. Willingness to participate was a major criterion for selection, but all the women present were invited to join the discussions. In some cases, managers nominated women to participate in the interviews in order to minimize disruption o f the work schedules, but inothers all o f the women present were encouraged to join the meeting. 1.20 A survey o f 100 small enterprises was carried out in all the main commercial and industrial areas o f Aden and included small workshops, hotels and other hospitality institutions, commercial and professional institutions, factories, and public and private sector service institutions. Enterprises were randomly selected, though efforts were made to include the principal economic sectors, especially those that expanded within the last decade. The survey included 49 trading establishments ranging from supermarkets to various specialized shops, 45 service-sector enterprises, including hotels and restaurants, telecom and internet offices, laundries and photo studios, banks and travel agencies, and five manufacturing units producing fiberglass, foam rubber, ceramics andaluminum products. 1.21 The sample o f the civil service sector includes six enterprises with a total o f 1,501 employees, 710 o f whom are women. Four o f these enterprises are considered large enterprises with more than 100 employees and two are considered mediumenterprises, having between50-100 employees. 1.22 The sample includes fifteen public enterprises with a total o f 6,830 employees, 1,560 o f whom are women. Among these enterprises, ten are large, three are medium, and two are small. 1.23 The mixed and recently privatized sectors were combined for the purpose o f analysis. The reason for this is that since privatized enterprises were recently transformed from public enterprises to private enterprises, their characteristics more closely resemble the mixed sector than the private sector. In addition, the data from the two recently privatized enterprises in the sample more closely resemble the data from mixed enterprises than new private enterprises. The sample for the mixed and privatized sectors includes eight enterprises with 1,178 employees, 193 o f whom are women. Five are large enterprises, two are medium enterprises, and one is a small enterprise with fewer than 50 employees. 1.24 The private sector enterprises were separated into largelmedium enterprises and small enterprises because data analysis revealedthat the characteristics o f these two classes o f business differed significantly. The sample o f large private enterprises included six companies, four o f which were large and two o f which were medium. The enterprises sampled have a total o f 1,195 employees, 38 o f whom are women. In the case o f the small private sector, 95 enterprises are included inthe sample with a total o f 643 employees, 113 o fwhom are women. 6 1.25 A survey was also conducted o f women active in the informal sector, covering 2,859 women inall parts o fthe city. 1.26 In addition to the surveys, the report uses qualitative data gathered through individual interviews with a variety o f stakeholders, including enterprise managers, senior government officials, working women in all sectors and community leaders to obtain their views on the constraints and opportunities o fwomen invarious economic activities. 1.27 The report first examines women's employment in the public sector, the semi-private andprivate sectors. Second, it assesses women's employment opportunities and constraints vis- a-vis educational attainments, equal pay, men's opinion on women's work, and women's employment preferences ineach sector. 7 2. WOMEN INTHE LABOR FORCE Women inthe Civil Service 2.1 Women are numerically well represented in the civil service. Forty-seven percent o f employees among the six civil service institutions surveyed were women. Further, in four o f them, women constitute the majority o femployees. The institutions sampled were three financial service enterprises, a hospital and two secondary schools. There are two reasons for high levels o f female employment in civil service. First, the predominance o f social services, particularly health and education where large numbers o f women are employed as teachers and health workers corresponds with their traditional caretaker role. This is reinforced by the second factor: the ideological culture o f the socialist period favored equal employment opportunities for men and women. 2.2 Women employed in the civil service are highly educated, over two-thirds having completed secondary school. O f the six institutions surveyed, 31percent o f female employees had university degrees, 10 percent had post-secondary degrees, and 40 percent had secondary degrees. Eleven percent o f the women had an intermediate level education, 6 percent had a primary level education and 14percent are illiterate. 2.3 Salaries for men and women occupying equivalent positions in the civil service are generally equal. Men and women were found to earn the same salary for the same job in the civil service. Intwo-thirds o fthe enterprises surveyed, women andmenreceivedthe same salary at every grade. In one case, women received lower salaries at the two highest levels of management, but at lower grades the pay was equal. In one other case, women made slightly more than menat all employment grades. 2.4 Managers have an overall positive opinion of the performance of women workers, although they complain of high levels of absenteeism. O f the six civil service managers interviewed, five mentioned that women were hard workers and half said they were trustworthy. One-third said that women were more qualified and two commented that they were reliable. However, there were also some negative perceptions o f women. Half o f the managers complained that women are frequently absent and for too long a time period. Absences were the only complaint shared by more than one manager suggesting that this i s the only major disincentive for hiringwomen inthe civil service. 2.5 The civil service sector is a small and shrinking sector and can only provide employmentfor a relatively small portion of women workers. While the sector will grow as the population expands, it does not have the potential to be a key source o f long-term economic growth. Ifwomen are to participate fully inthe new economy, they will need to look beyond the civil service for employment. 8 Women in PublicEnterprises 2.6 Historically, public enterprises have been the largest employers of women in Aden, largely due to the scale o f this sub-sector. While twenty-three percent o f employees are women, this is only slightly higher for the rate o f employment in Aden's labor force as a whole (20 percent). 2.7 Most women working in thepublic sector have attained at least intermediate levels (51 percent) of education. Seventeen percent have achieved secondary level o f education. Women with post-secondary (5 percent) or tertiary level (4 percent) levels o f education comprise smaller percentages o f the workforce. However, those with no education comprise a sizeable minority o f women employees, with illiterate women representing 13 percent and those with a primary level 9 percent o f the female labor force inthe public sector. 2.8 While men are better represented at management levels, women are better represented atprofessionalgrades. For all large enterprises (of which the public sector i s the dominant one), 10.7 percent o f men with university degrees are in higher management positions in contrast to 5.1 percent o f women. However, only 54.7 percent o f men with universitydegrees are employed inprofessional positions compared to 74.5 percent ofwomen. 2.9 Men and women in public enterprises are paid equally at any grade. Among supervisors and technicians, women's average base salary i s identical to that of men. Among skilled workers, women's salaries are identical in all but one company surveyed. Among unskilledworkers, intwo cases women's salaries were higher than that o f men and intwo other cases it was lower. Thus, the available data suggest that women's and men's salaries are essentially equal. 2.10 Managers in the public sector have largely positive opinions of women workers. The vast majority o f managers (86 percent) said that women were hard-workers and half mentioned that women were trustworthy. Fewer (39 percent) said that women were reliable workers, which may reflect planned absences (maternity leave) or unplanned absences (emergencies such as illnesses o f children and elderly parents) on the part o f women due to their childcare responsibilities. Thus, perceptions about quality o f women workers i s not a disincentive to hiringfemale workers. 2.11 Most womenprefer to work in public enterprisesrather than in theprivate sector. The reasons cited for preferring public enterprises (and indeed the civil service) included greater job security as well as a higher tolerance o f absences, including policies for maternity leave and shorter hours for breastfeeding. A pension is also guaranteed for women upon reaching the mandatory retirement age o f 55 (compared to 60 years for men). Women find it difficult to qualify for full pension benefits because o f the time they take o f f during their childbearing years and the earlier obligatory retirement date compared to their male colleagues. Moreover, the legal protections offered to women in the workforce are more likely to be respected in the public rather than inthe private sector. Thus, despite its lower pay and inequitable pension system, the benefits offered by the public sector make it highly desirable for women seeking employment. However, women complain that public sector employment is increasingly difficult to find. 9 2.12 Public enterprises offer limited future employment opportunities since they have low potential for expansion. InYemen as elsewhere, the performance o f public enterprises has been mixed. A particular problem has been the hiring o f workers for political and patronage considerations rather than economic efficiency. Overall, few o f these industries are currently profitable and the potential for future expansion i s low without major reorganization within the firms. The Government has undertaken a campaign to privatize these enterprises. Thus, this sector o f the economy is not likely to supply women with work in the future, and women fkequently complained o f difficulty infindingpublic sector employment. Women inMixedandPrivatizedEnterprises 2.13 Beginning in the 1990s, the Government began to privatize large public industries, a policy which continues today. After the civil war, the speed o f privatizations was accelerated with the help o f international organizations, including the World Bank. Ultimately, the Government's stated objective is to privatize most o fthe remainingpublic industries. 2.14 Women fare worse in mixed and privatized enterprises than in the public sector. At sixteen percent, the proportion of women working in mixed or privatized enterprises is substantially lower (6percent) than in the public sector. Women are hired at lower rates in these enterprises and are hit disproportionately harder by the inevitable layoffs that follow privatization. Two o f the eight sampled enterprises were fully privatized and in these the proportion o f women employees was only half that o f enterprises where the Government still exerts partial control (8.6 percent). 2.15 The educationalprofile of women employed in the mixed and privatized enterprises is higher than that found in the public sector. As Table 2 shows, there i s a higher portion o f female employees with university degrees, while the public sector has a higher percentage of illiterate women. Table 2: Percentageof WomenEmployeesby EducationalLevelwithinEachSector Public Sector* MixedprivatizedSector University 4.1 13.5 Post-Secondary 5.3 6.2 Secondary 16.8 16.1 Intermediate 50.9 50.3 Primary 9.2 9.3 Illiterate 13.6 4.7 Total 100.0 100.0 *Public sector includes civil service and public enterprise. 10 2.16 Salaries for men and women vary greatly in the mixed and privatized sector, at different employment grades and among companies. There i s no clear pattern inthe salaries o f men and women in this sector. For example, at the supervisor level, women's pay was significantly lower inthree o f the five enterprises for which data are available, but considerably higher in the other two. At the technician level, for the three enterprises where data are available, pay i s equal in one, higher for men in the second and higher for women in the third. For skilled workers, o f the four cases where data are available, pay i s equal in three cases and women's pay is higher in one case. Overall, this suggests that pay scales differ between companies, but there i s no evidence to suggest that there i s a bias against women inthis sector in terms o f salary. Infact, it appears that on average, women receive a higher salary thanmen. 2.17 Managers are even more positive about women workers in this sector than in the public sector. Managers in the eight enterprises for which data are available were overall very positive about women workers. Ininterviews, all but one commented that women were hard- workers and three o f the eight mentioned that women were reliable and trustworthy. Two even said that women were more qualified than men overall. The only shared negative perception was the length and number o f absences for women workers and not one manager said that women were less qualified. Giventhat the perception o fmanagers is generally positive, it does not seem that women's performance accounts for their lower employment rate inthis sector. inan attempt to makethem economically viable. "The Owner of the company instructed The privatization pattern so far is that first, me to dismiss all womenfrom the women o f all educational levels except for those production line. But Ihave managed with university degrees are being pushed out o f to keep Some Of them with the support privatizing enterprises. Employers are generally Of the Owner Son. Ihide them 'S reluctant to layoff male workers since men are whenever the OWner visits. Manager " Women inthe PrivateSector 2.19 The private sector is small, but is the key to fbture growth. In Aden, currently, only 7 percent o f women are employed in the private sector. For the purposes o f analysis, private enterprises were divided into large and small enterprises. Because the characteristics o f these businesses vary greatly, they will be assessedseparately. 11 Women inLarge PrivateEnterprises 2.20 Thepercentage of women employees in large private enterprises is extremely low and suggests a strong bias against women in the workforce. Almost all large private enterprises in the governorate were included in the survey. Only 3.1 percent o f the employees o f these enterprises (38 out of a total of 1,233) were women. 2.21 Those women who do work in large private enterprises are highly educated. Fifty percent o f women had university degrees, 25 percent had post-secondary degrees and 10.7 percent had a secondary degree. Those with an intermediate and primary education comprised 7 percent o f employees and there were no illiterate women employed inthis sector. Thus, women seeking employment inthis sector needto have highqualifications. 2.22 Despite the low participation rate, managers tend to have positive perceptions of women workers. Five o f the six managers interviewed said that women were hard workers, and two managers each said that women were reliable and trustworthy. Interestingly, few had any negative perceptions o f women workers. Only two o f the six complained that women were absent for long periods and none mentioned frequent absences. This pattern suggests that managers have a generally positive perception o f women workers. It also suggests that women working inthis sector are highly competitive. 2.23 Social stigma associated with women working outside the home may also limit women's ability to work in "A woman should not be the private sector. Some managers explained that it i s working. She must stay at inappropriate for women to be working outside the home as home." their primary role should be that o f caretaker. Ifthis beliefi s Youngmanworkingina widespread in society, it might establish disincentives for travel agency private sector enterprises to hire women. 2.24 The economic slowdown of recent years is encouraging managers to hire more men since they are considered to be the primary breadwinners of the family. Thus, private enterprises tend to hire women only when few men qualify for the job. Although cross-regional studies have shown that hiring women does not increase the unemployment rate for men,3 this perceptionmay play a large role inthe bias against employing women inthe private sector. 2.25 Changing systems of production create a disincentive for hiring women workers. Private firms operate longer hours, including evening shifts, compared to the past. Women, however, find it difficult to work during these hours primarily because o f "reputational risk" - the social norm i s that "respectable" women should not be out after dark. This social value is underpinned by Law 25 o f 2003 which stipulates that women are not allowed to work night shifts infactories except duringRamadan. 2.26 A new cultural ideology around the need to create gender segregated spaces at work is emerging, making it more difJicultfor women employees. Some managers indicated that it i s inappropriate for men and women to work in the same production floor or other work space, World Bank, 2003a. 12 creating disincentives for employers to hire women. Overall, these observations, together with the extremely low rate o f women employees, strongly suggest that there i s a bias against women inthis sector. 2.27 Although there are only a handful of largeprivatefirms, these are likely to become a key driver of growth in Aden. However, the presenttrend i s for a decreasing number of women working insuch enterprises. Women in Small PrivateEnterprises 2.28 At present, small enterprises, @e. those with less than 50 employees) comprise a minor part of the Adeni economy, but are growing quickly and will continue to do so. Most small enterprises are service-related: small grocery stores, restaurants, photo labs, public phone centers, repair shops, etc. All small enterprises in Aden are privately owned, and most were established post-unification. Many o f these small enterprises are profitable. Despite a recent proliferation, these businesses continue to make up a relatively small portion o f the overall economy and it will take many continued years of sustained growth for this sector to make a sizeable contribution to the overall economy. 2.29 Women's employment rate is much higher in small rather than large private enterprises, although there is still wide variation among small businesses. Women's rate o f employment in small private enterprises, at 16.7 percent, i s closer to their overall rate of participation in the economy (20.5 percent) and i s significantly higher than those in private enterprises. Nevertheless, 57 percent o f the enterprises surveyed have no female staff at all. Thus, there are two simultaneous trends in women's employment: (i) level o f women's visible participation in some types of businesses, especially those that cater to women customers, such as women's clothing shops, family sections o f restaurants, etc.; and (ii) near absence o f women inothers, such as restaurants, gas stations or those businesses with only one or two employees. Therefore, there is systemic bias against women workers inthe small private sector. 2.30 Small enterprise owners' perceptions of women workers are largely positive. Among respondents, 62 percent said that women workers are reliable, 55 percent said that they are hard workers, and 48 percent mentioned that they are trustworthy. Few said that women have higher qualifications, and many revealed that they primarily hire women with whom they have strong familial or personal connections. Few owners cited any negative perceptions o f women workers, but those who did most often cited the long and frequent absences requiredby women workers due to their childcare responsibilities (maternity leave, family emergency, etc.). This response i s similar to most other sectors and i s clearly the primary negative perception about women workers. 2.31 However, social stigma may limit women's ability tofind employment in smallprivate enterprises. Forty percent o f small enterprise owners said that they consider it unrespectable for women to work outside the home. About 15 percent claimed that their 13 reputation would suffer if they hired women. Most managers in the hospitality sector (such as restaurants and hotels) are reluctant to hire women (and few women are willing to work there) out o f concern for their reputations. In particular, women find it difficult to work in small businesses which have just one or two employees operating out o f the intimate setting o f a one room office. 2.32 Increasing women's role in the small private sector is crucialfor increasing long-term female labor participation rates. The small private sector has high growth potential, especially ifthe business and investment climate inAden continues to improve. While women currently play an important role in certain small private enterprises, an overall increase in women's participation in the economy will require both the expansion o f these companies and a greater acceptance o f women workers in all small enterprises. Moreover, as the privatization process continues, more women will seek work inprivate sector enterprises. This means that the private sector will need to absorb some o f the female workers who are currently employed inthe public sector, if women's employment rates are not to fall. Thus, although relatively few women are currently employed in this sector, its capacity to absorb female labor will have important long- term implications for women's future overall employment rate inAden. Women-OwnedBusinesses 2.33 Only 1percent of working women inAden are formal business owners, incontrast to 12 percent in Sana'a. Women entrepreneurs have difficulty starting their own business due to the lack o f capital, business networks and appropriate skills. Moreover, women complained that it is difficult to be officially registered as this takes many hours o f waiting inpublic offices ina male- dominatedbureaucracy. Women inthe InformalSector 2.34 As women arefinding it increasingly difJicult tofind employment in theformal sector, many are turning to the informal sector, although others may choose this sector because it allows them to combine domestic responsibilities with wage labor. Many women surveyed appreciate the flexibility and independence that come with managing their own activities. Seventy-nine percent o f women in the informal sector work from home, suggesting that the growth o f this sector may be inresponse to societal constraints on physical mobility. Although it i s difficult to determine the number o f women working in the informal sector, it is estimated that up to 10percent o fall Adeniwomen work inthis sector. 2.35 The main activities undertakenby the women inthe informal sector are personal services (such as hairdressing and henna application) and represents 29 percent o f women inthe informal sector. Next inimportance i s needlecraft, which occupies 20 percent o f the women and includes sewing, embroidery and bag-making. The third in size at 16 percent is retailing, including hawking o f dresses and trading in household goods and ruminants. Food processing ranging from fish cooking to biscuit-making occupies 12 percent o f the women and a further 18 percent o f the women interviewedhave more than one activity, usually combining two or three related 14 activities. Most women who are involved in multiple activities explained that varying their activities seasonally increasedtheir overall income and client base. 2.36 Women working in the informal sector have a primary or secondary level o f education and therefore have sufficient skills for employment in the formal sector. Among those active in the informal sector, 18 percent o f those surveyed are illiterate, 30 percent have a primary education, 15 percent an intermediate education, 19 percent a secondary education, 6 percent have a college education, and less than 1 percent have more than a college education. This suggests that women capable o f working in the formal sector are either unable to find employment inthe formal sector or that women are choosing to work in the informal sector for other reasons. Women generally work in this sector to subsidize household income, and sometimes even to complement their own income from the formal sector. Eighty seven percent of women working inthis sector come from middle income households (live in2-3 room cinder block houses with access to electricity, telephones, piped water and sewerage). Only 6 percent are from the poorest segments o f society (live in shanties). The informal sector does require skills and some capital, making it difficult for the poorest women to engage inthe sector. 2.37 Incomes generated from this sector are quite modest. While it i s likely that incomes were under reported inthe survey, 54 percent o f women surveyed reported that they earned less than YR 4,000 (US$ 22) per month. Only 15 percent reported that they earned more than YR 6,000 (US$ 33) per month, mainly those who were involved in multiple activities. These incomes are modest even by Yemeni standards given that according to the 1998 Household Budget Survey the majority or 63 percent o f families spent between YR 20,000 and YR 50,000 (US$ 110 - 280) per month. This means that income from the informal sector would pay for about 8 to 20 percent o f average household expenditures. 2.38 Despite the modest income, most of the women interviewed indicated that this is an important supplement to household income. The worsening economic situation in recent years has meant that even for households that have them, jobs in the formal sector no longer provide sufficient income for basic needs. Over half o f the respondents said that all or most of the income from the informal sector was spent on immediate household needs, and 88 percent said that at least half o f this income went directly to necessary household expenditures. 2.39 While many women manage to make small profits in the informal sector, those surveyed indicated that there are major impediments to increasing their returns. Inparticular, women lack access to information, markets, social networks and financial capital. This is partly due to new norms o f gender appropriate behavior which are increasingly restricting women to the home. Many women cited problems with marketing, for the most part they are restricted to selling to other women and few had the networks and knowledge to market their goods outside of their own neighborhood. Obtaining the necessary licenses in a male-dominated bureaucracy and public space was often cited as an impediment to entering the formal sector. Thus, women are forced to limit their activities to a small geographical area and to use traditional methods o f production which limits their ability to increase their income. Lack o f available capital was also a major constraint to expand their activities andmake them more profitable. Women said that the informal sector was largely static andhad little opportunity for growth. 15 Conclusion 2.40 The study has confirmed that the impact o f recent economic changes falls unevenly on men and women, and among women varies markedly by social and economic class. Women in the public sector are a relatively privileged group: they are well represented, can achieve high management positions and their salary levels are equal to those o f men in equivalent positions. However, as inefficient public enterprises contract or privatize, the mainstay of female employment i s being eroded. While the civil service continues to employ substantial numbers o f women, especially as teachers and health workers, the newly expanding formal private economy i s not hiring many women. Those that are hired are the most highly educated. For those without high levels o f education, the informal sector is the only source of economic opportunity. For those with little or no education or capital, even the relatively low paying informal sector is beyond their reach. Table 3 captures these trends inwomen's economic participation and shows a clear movement from a declining public sector led employment pattern to that which i s private andwhere women face increasingconstraints. 2.41 For those women in the formal sector, the key constraint i s their dual responsibility as employees and caretakers. This manifests itself in absenteeism and inability to qualify for a full pension. For those inthe informal sector, the most common constraints cited were lack o f capital, markets, information and social networks. 16 B - 35 .z a, & a 6 3g 5 2 33 m 3 .I L e c, W wC M .- 9E 0 V 3& - - a, M i5 8 h0 F P Y m Y U :"eE a, U 4 e 2.42 There are policy-related implications for each o f these key sectors discussed inthis study. Table 4 below identifies the potential policy areas that are relevant for each sector. (The matrix is forward looking, such that a '+' denotes that the women inthe sector would benefit from policy interventions inthis area, not that the situation i s satisfactory). Table4: Women andEmploymentinAden: PolicyIssues by EnterpriseType Civil Public Mixed and Large Private Small Informal Service Enterprises Privatized Enterprises Private Sector Enterprises Enterprises Non-discriminatory hiringpolicies Flexible work arrangements through a performance-based system Equitablepensions policies Equitable layoff policies and practice Promoting female d entrepreneurship Vocational training d Microfinance II II I . I . I . I . Safe childcare .I MarketingI networking I I . I I Legal protection d II 18 3. LOOKINGAHEAD: ENSURINGGENDEREQUITY INPOLICIESAND INVESTMENTSTHROUGHFURTHERRESEARCH 3.1 This study has highlighted that economic change has different implications on women, depending on their respective socio-economic positions. It has also shown that social norms and perceptions present a particular challenge for women's employment. In order to come up with evidence-based policy interventions, a second generation o f research i s required in areas such as the following: Quantzjjing the real absences of men and women: There i s a wide perception that women have high rates of absenteeism and that this affects their performance at work. However, we do not know if these perceptions are true and how they compare to the performance and absenteeism o f men(for example, consulting work on the side, qat chewing among men could also contribute to absences). Results o f such research could help breakdownmyths. Investigating retrenchment practices: A quantified assessment of who is being laid off, why and the gender implications of these are needed to devise policies that adequately protect women workers. The impact of middle class women's unemployment on poverty of working-class women: The employment o f middle-class women generates a demand for services that are offered by working-class women, such as domestic services. If fewer middle class women were to work, how is this affecting the unemployment (and poverty) o f working class women? How might policies that encourage the employment o f middle class women create employment opportunities for working class women? 3.2 There are many useful entry points for this type o f research, including the Government's recently launched Household Budget Survey, the Bank's ongoing work on the Investment Climate and the Bank-led work on women's entrepreneurship and the upcoming Country Assistance Strategy. 3.3 More concretely, research could focus on, but not be limited to, the following policy and investment areas: (a) Equitable pensionpolicies. (b) Ensuringgender equity inretrenchment practice andpolicy. (c) Supporting the development o f a legal framework for protecting women against discriminatory hiringpractices (especially in large private enterprises). Policy recommendations from the above work could also have investment-related implications such as: (a) Programs that support women's entrepreneurship (e.g., improving their marketing skills; facilitating networking and exchange o f information among women business operators; institutional capacity buildingfor local networks o f entrepreneurs). 19 (b) Programs inmicrofinance that are adapted to the needs of women entrepreneurs. (c) Vocational training for women adapted to market demand and existing skill level. (d) Public-private partnerships for developing a reliable and safe system o f childcare facilities. 3.4 A more detailed matrix o f the above presents examples, outlining the challenges, potential areas for short- and long-term recommendations. 20 Table 5: Some Examples of Potential Areas for Further Research PolicyAreas Potential Short-termRecommendations PotentialLong-termRecommendations Non-discriminatory Targeted public education campaign on the value Transparent hiring practices. hiring policies o fhiring women. New legislation and monitoring mechanisms may be required. Flexiblework Introduce flexible working hours and a Monitor and evaluate flexible work arrangements. arrangements performance-based system. through a performance-based system ~~ Equitable pensions Provide full pension to women who have been Raise the mandatory retirement age to 60 or decreasethe policies forced to retire before they could qualify to number o f years o f required employment to receive a receive it. fullpension. Equitable layoff Preparation oftransitional plans for privatization Monitor the implementation o f the transitional plans. policies and practice to ensure that women are not disproportionately affected. Ensure that women are given the same re- training opportunities as men. Promoting female Simplify procedures for small business creation. Track and monitor new business establishment and entrepreneurship growth by gender. Vocational training Technical, financial and administrative training to improve production quality. Work with outside agencies to develop permanent resources that can help women obtain the necessary skills to operate a micro-business. Microfinance Improve existing micro-credit programs. Increasenumber o f credit agencies offering micro-loans and better advertise such programs. Streamline the process o f obtaining a loan. Safe childcare Encourage private daycare facilities, Child care facilities operate near or at the place of Establish standards and certification employment. The Government should work with the Conduct periodic monitoring to ensure quality. private sector to develop numerous high quality day care centers in all areas o f the city. Marketing/ Provide linkages to new markets. Promote business relations between formal sector networking Promote networkingamong women inthe businesses and women inthe informal sector. informal sector (and with those inthe formal sector). Legal protection Protectingwomen from discrimination. Investigating cases where unfair practices are reported. Guaranteeing that women can take the leave that i s provided in the legislation. 3.5 This research has provided valuable insights for the employment trends for women in Aden and pointed out potential policy areas for further research. This will contribute to Yemen's ongoing efforts to advance employment opportunities for Yemen and work towards improved gender equity. 21 BIBLIOGRAPHY Carapico, Sheila. 1998. Civil Society in Yemen: ThePolitical Economy ofActivism in Modern Arabia. Cambridge: Cambridge UniversityPress. Caspi, Michael Maswari. 1985.Daughters of Yemen,Universityo f California Press. Central Statistical Organization, Ministryo f Planning andDevelopment, Republic o f Yemen, 1999.Labor Force Survey. --______ .2003. Statistical Year Book 2002. ______-- .1999. GeneralReport the household budget suwey 1998. of ___-----1994.Statistical Year Book 1993. . Colburn, Marta. 2002. 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