Countering the gender-regressive shock of COVID-19 in Asia

An excerpt from the Future of Asia Podcast episode on Countering the regressive shock of COVID-19 in Asia. Listen to the full episode here. 

COVID-19 has dealt a serious blow to gender equality in Asia. Women in the region, and globally, have been nearly twice as likely to lose their jobs than men, and have borne the brunt of the increased burden of unpaid care work. New research reveals that taking swift action to push for gender parity can kickstart the recovery and deliver much-needed economic growth in all countries in Asia.

McKinsey research studying the impact of COVID-19 on gender equality reveals that in a gender-regressive scenario reflecting trends we have seen in the past few months, global GDP growth could be $1 trillion lower in 2030 than it would be if women’s unemployment simply tracked that of men in each sector. Taking action to advance gender equality now, even as the pandemic continues, could however add $13 trillion to global GDP in 2030 compared with that scenario. Timing is important: waiting to take action until COVID-19 subsides reduces the potential opportunity by over $5 trillion.

That calculus applies to Asia too. The McKinsey Global Institute’s Power of Parity work found that if all countries in Asia match Singapore’s best-in-region standards on gender equality, the region as a whole could get a $4.5 trillion boost by 2025, adding 12 percent to GDP compared with a business-as-usual trajectory. Conversely, inaction on gender equality risks undermining the growing role Asia is playing in the global economy.

The Power of Parity research quantifies the economic upside for individual countries in the region if they boost gender equality. India could add 18 percent or $770 billion to its GDP by 2025, Australia could add 12 percent or $225 billion, Indonesia 9 percent or $135 billion, the Philippines 7 percent and $40 billion, and Japan 6 percent or $325 billion – a shot in the arm for countries seeking economic growth to recover from the pandemic.

Smart policy and business leaders will see the benefits of taking immediate action on gender equality. The question, then, is how do they realize the potential?

Asia’s economic diversity – encompassing advanced, emerging, and frontier markets – as well as its cultural diversity, is equally apparent when it comes to gender parity. Even before COVID-19, progress towards gender equality had been uneven with significant gender gaps remaining. The challenges women face in their daily lives vary from country to country.

For example, Singapore has achieved the fastest rate of improvement in female labor-force participation in the region – doubling from 28.2 percent in 1970 to 59.7 percent in 2016 – while India, at 25 percent, struggles to progress on this key measure. The Philippines is the region’s best performer on women in leadership while only one in eight leaders in Japan are women. Indonesia boasts one of the strongest bases of female entrepreneurs in the world with women-owned SMEs contributing 9.1 percent of GDP according to the World Bank, while women in China’s rural areas lack entrepreneurial and digital skills training.

The pandemic has widened existing gender gaps and increased the urgent need to tackle them. Regional diversity means that action to boost gender equality will not be uniform across Asia. There will be no convenient, one-size-fits-all solution that will deliver gender parity. Instead, a range of actions is needed to tackle deep-rooted issues, and policies and practices will need to be tailored to individual countries. That said, Asia already offers a blueprint for change with good examples of gender-positive policies and practices working around the region.

Actions targeting five key areas could lead to systematic and scaled interventions. These are: increasing female labor force participation, addressing women’s underrepresentation in business leadership, tackling gaps in women’s access to digital technology and finance, and shifting attitudes about women’s roles.

In these areas, governments can make education and training more women-friendly, mandate targets and disclosure, and introduce fiscal measures to support women, among other things. In the Philippines, for example, the Technical Education and Skills Development Authority Women’s Center offers vocational training to women in industrial sectors dominated by men, with great success. In Singapore, the Diversity Action Committee has stepped targets to reach 30 percent female representation on boards by 2030.

The private sector has a critical role to play. Companies can embed gender diversity from top to bottom with clear CEO commitments and implement processes that back up goals, and provide flexible workplaces, mentorship, and networking opportunities for women. In India, IT companies like Mindtree are investing in high-quality on-site creches. In Japan, Nippon Life Insurance targets 100 percent uptake of paternity leave.

Australia’s Suncorp redesigned its contact centers allowing employees to work from home workstations or at working spaces in regional shopping centres, as well as offering a range of home-based positions. This might have been considered ground-breaking before the pandemic but, in the new normal of COVID-19, companies around the world are rushing to retrofit similar strategies. Business leaders with vision will find opportunity in the current disruption to corporate life. They will keep gender equality at the center of the agenda and strive to make the future of work more flexible, diverse, and fair.

There may also be opportunities to cooperate and develop regional solutions. Initiatives such as Bloomberg’s Gender-Equality Index and IFC’s Banking on Women bonds support ethical investing. The APEC Women and the Economy Dashboard seeks to measure and share progress in the region and between its constituent countries. And India’s National Institute for Transforming India (also known as NITI Aayog), has created a state-level gender index to assess progress on gender equality.

Importantly, all stakeholders need to play a part: governments, companies, and civil society and NGOs. What is clear is that gender equality will be key to Asia’s economic recovery and to the region maintaining its growing share of the global economy. Equally, as the world economy rebalances towards Asia, leadership in areas including gender equality will become increasingly important.

Oliver Tonby is the Chairman of McKinsey’s offices in Asia, while Anu Madgavkar is a Partner with the McKinsey Global Institute.