Published and draft legislation - Ecuador

Changing the law to ensure women’s economic empowerment

Laura Fernández, Women’s Empowerment Officer, BBVAMF

Laura Fernández

Draft Organic Act for Women’s Social, Political and Economic Development

The World Bank recently held its 2017 Law, Justice and Development Week in Washington, a forum for global experts to debate how the legal framework can contribute (or not) to development. On this occasion, the first three days were spent entirely on gender discriminatory laws. Something particularly urgent, if we recall that 70 years ago the United Nations created the Convention for the Elimination of All Forms of Discrimination against Women (CEDAW) in which all the signatory states made a commitment to work towards women’s full development, guaranteeing their human rights and eliminating all discrimination against them in politics and public life. However, legal inequality by reason of gender still exists in 90% of countries.

In 155 countries there is at least one law that bars women from the same economic opportunities as men. The figures come from the World Bank report Women, Business and the Law 2016, which also points out that in 100 countries women face restrictions to work and that in 46 there are no laws against domestic violence. Some of the 21 legal differences between men and women scrutinized in this report are: the ability to get a job without the husband’s permission, to sign contracts or register a company, to take on the role of “head of the household”, or to open a bank account, etc.

All this gender-based legal discrimination restricts women’s opportunities to choose and take decisions about what is in their own best interests and that of their families and this has major economic consequences. These inequalities limit women’s participation in the workplace and result in lower economic growth. The World Bank’s report Gender Equality and Development estimates that eliminating employment barriers to women in certain industries and occupations would increase labor productivity by up to 25%. Existing gender gaps in women’s entrepreneurship and employment currently accounts for estimated revenue losses of 14% in Latin America and of 10% in Europe.

In other words, fighting for equality under law between men and women is not just a question of human rights, but also an economic issue and one of human development. Where there is no legal discrimination it also means that there are more girls at secondary school (which has an impact on their likely income in the future); that there are more women in employment and in senior management positions and a lower gender-based wage gap (currently 24% worldwide). Similarly, in those countries with laws protecting the victims of gender violence, women have a higher life expectancy.

While it is true that the 30 countries with 10 or more legal differences between men and women are in the Middle East and Africa, in Latin America some gender differences under law persist. Social and cultural usage are often transferred to legal frameworks in the shape of unconscious bias and mean that, in many countries in the region, the law does not prevent discrimination in hiring, selection and promotion processes, nor does it prohibit wage discrimination between men and women. Furthermore, some laws do not allow Latin American women to carry out jobs classified as “arduous, dangerous or morally inappropriate” (eg. in mining, those in which toxic products are used or heavy materials are carried). In other cases, laws require married women to ask their husbands’ permission to work, women cannot be head of the household (nor administer marital assets) nor transfer their nationality to their children.

All these stumbling blocks contribute to reinforcing gender stereotypes and to limiting women’s economic empowerment, making it impossible for them to access loans, have the necessary assets to become entrepreneurs or to take decisions about how and on what the household budget is spent. Family law frequently reinforces women’s roles and prevents them from having the same opportunities as their husbands. The World Bank shows that there is a direct correlation between how finances are managed within the marriage and financial inclusion (in those countries with legislation under which the man is the “sole administrator”, only 18% of women have a bank account, whereas in those where this management is shared, the percentage rises to 57%). When women have greater financial independence, their negotiating power at home rises and more is spent on the family’s welfare.

Nevertheless, between 2014 and 2016, there has also been progress in the region. In fact, of the 18 countries that do not have gender-based legal discrimination, 4 are Latin American: Dominican Republic, Mexico, Peru and Puerto Rico. 16 Latin American countries have passed reforms on this issue in the same period.

We will probably be able to add Ecuador to this list very soon. In October the country passed the Draft Organic Act for Women’s Social, Political and Economic Development. Among the reasons given for this law is that of achieving real equality under law, both political and economic and social. These reforms will undoubtedly contribute to improving the situation described in the World Economic Forum’s latest Global Gender Gap Report, which concludes that Ecuador has lost ground and has a wider gender gap for two main reasons: political and economic participation.

With regard to women’s political participation, in the last 20 years, in Ecuador both the Constitution and other electoral laws have addressed the issue of equal opportunities between men and women, setting a minimum quota for participation in public office at 20% in 1997, which later rose to 35% and then with 5% increments at each election until reaching parity. However, these quotas have not materialized. In the 2013 general elections, women’s participation was just 38% and 26% in the regional elections. The number of women candidates for senior posts comes to only 42%. In Ecuador 27.8% [1] of women take part in ministers’ cabinets; it is in 7th place in this ranking after Nicaragua, Granada, Chile, Costa Rica, Colombia, Bolivia and Haiti. As such there is still a gap in women’s participation in politics, especially in regional and municipal administrations. So, the National Assembly has decided to amend the Organic Law on Elections and Political Organizations to eliminate discrimination against women in politics: internal democratic processes will be led by women, will include 50% of female candidates in the regional and local election processes, one man and one woman will be on each joint Presidential and Vice-Presidential ticket and a proportion of political organizations’ budget will be used for gender training.

One of the greatest obstacles to women’s economic participation in Ecuador is the lack of an environment that guarantees full autonomy and independence. Firstly, there are significant gaps in access to the job market. In Ecuador, only 45.4% [2] of Ecuadorian women have appropriate formal employment (a job that guarantees minimum wage conditions and in which they work a full 40 hours a week). Although this percentage changes if we study urban women living in poverty (37%). One of the greatest limitations facing Ecuadorian women in the job market is the time they spend on unpaid work: 40 hours a week (4 times more than the time spent by men). This means that many can only spend an average of 20.7 hours a week on paid work (half the time men devote to paid work) [3]. Stereotyping, together with the division of traditional roles, are factors that without doubt impact on these statistics as well as the type of activities and professions that women pursue (mainly trade, agriculture, food services, teaching and health).

Meanwhile, 27% of women in Ecuador are heads of household, which means that they are more vulnerable and are more likely to be in a situation of poverty (for every 100 men living in poor households, there are 117 women in a similar situation) [4]. Furthermore, 35% of women living in urban environments and 37% of women in rural ones do not have incomes of their own.

Ecuadorian women also suffer from lower financial inclusion (only 40.8% [5] have a bank account). In fact, the proportion of women who get micro-loans is lower than that of men (26%, against 74% of men). The opportunity of access to economic resources with which to finance their enterprises is critical for 48% of the businesses owned by a woman [6].

As a response to the situation which millions of women in Ecuador have to deal with, the National Assembly has drafted the following reforms in its Bill:

  1. Reform of the Organic Financial Monetary Code so that it includes “gender equity” in its core values and promotes access to loans for “women, female heads of household and those involved in caring for others” in its purpose. These are also identified as priority categories in its role of generating incentives for institutions in the financial system to create products designed to promote and facilitate economic inclusion, in the affirmative-action measures promoting economic inclusion among groups with priority needs, in cutting the requirements to access productive loans and micro-loans in the national financial system, and in the loan guarantee system. These measures are designed to underpin the credit and guarantee obligations of people who are not in a position to execute projects with the national financial system or tender for contracts as State suppliers. Finally, legal amendments have been passed so that all institutions in the financial sector have gender indicators for the loans they have originated and so that they operate in a sustainable and equitable manner, one that encourages the economic inclusion of “first-time entrepreneurs, women, female heads of household, women involved in caring for third parties, and single mothers”.
  2. Reform of the Organic Law of the National Public-sector Hiring System, adding to its core values that of gender equality, understood as public-sector hiring using margins of preference in activities that have traditionally have not taken on women, in order to break with the perpetuation of stereotypical roles.
  3. Reform of the Code of Employment, setting a floor of 15% of the total amount of productive loans and micro-credits to be granted to women, above all female heads of households and those involved in looking after third parties, in the first year after the law comes into force.
  4. Reform of the Law against Violence against Women in order to encourage co-financing of productive enterprises, training in financial literacy and productive entrepreneurship for women in all State-run shelters and centers for women, setting up productive enterprise programs and preference when bidding in tenders based on merit and examinations to enter public service.

Having laws that do not discriminate against women is a first step, and a key one, towards a better rule of law, greater gender equality and more economic empowerment for women. But it is not enough on its own. The real challenge is to make sure that written laws are properly implemented and that adequate budget commitments are made so that they can be enforced.

The World Economic Forum estimates that it will take 217 years before economic gaps by gender are closed [7]. Action on all fronts is needed urgently, on the part of all the stakeholders (governments, companies and civil society). A first step is eliminating any legal discrimination that does not enshrine equality between men and women. This is in fact the first target of Strategic Development Goal 5: to eliminate all discrimination against women and girls. The time is now. We cannot wait.

[1] Gender Equality Observatory - ECLAC

[2] I National Statistics & Census Institute of Ecuador 2015

[3] [4] Gender Equality Observatory - ECLAC

[5] Global Findex 2014

[6] Ecuador Economic Census - National Statistics Institute 2014

[7] The Global Gender Gap Report 2017 - World Economic Forum