[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
BEYOND MICROFINANCE: EMPOWERING WOMEN IN THE DEVELOPING WORLD
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HEARING
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
JULY 12, 2017
__________
Serial No. 115-53
__________
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida BRAD SHERMAN, California
DANA ROHRABACHER, California GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio ALBIO SIRES, New Jersey
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas THEODORE E. DEUTCH, Florida
TED POE, Texas KAREN BASS, California
DARRELL E. ISSA, California WILLIAM R. KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID N. CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina AMI BERA, California
MO BROOKS, Alabama LOIS FRANKEL, Florida
PAUL COOK, California TULSI GABBARD, Hawaii
SCOTT PERRY, Pennsylvania JOAQUIN CASTRO, Texas
RON DeSANTIS, Florida ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina BRENDAN F. BOYLE, Pennsylvania
TED S. YOHO, Florida DINA TITUS, Nevada
ADAM KINZINGER, Illinois NORMA J. TORRES, California
LEE M. ZELDIN, New York BRADLEY SCOTT SCHNEIDER, Illinois
DANIEL M. DONOVAN, Jr., New York THOMAS R. SUOZZI, New York
F. JAMES SENSENBRENNER, Jr., ADRIANO ESPAILLAT, New York
Wisconsin TED LIEU, California
ANN WAGNER, Missouri
BRIAN J. MAST, Florida
FRANCIS ROONEY, Florida
BRIAN K. FITZPATRICK, Pennsylvania
THOMAS A. GARRETT, Jr., Virginia
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
C O N T E N T S
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Page
WITNESSES
Ms. Mary Ellen Iskenderian, president and chief executive
officer, Women's World Banking................................. 4
Tavneet Suri, Ph.D., associate professor of applied economics,
Sloan School of Management, Massachusetts Institute of
Technology..................................................... 9
The Honorable Melanne Verveer, executive director, Georgetown
Institute for Women, Peace and Security, Georgetown University. 22
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Ms. Mary Ellen Iskenderian: Prepared statement................... 7
Tavneet Suri, Ph.D.: Prepared statement.......................... 11
The Honorable Melanne Verveer: Prepared statement................ 24
APPENDIX
Hearing notice................................................... 60
Hearing minutes.................................................. 61
The Honorable Eliot L. Engel, a Representative in Congress from
the State of New York: Material submitted for the record....... 63
The Honorable Gerald E. Connolly, a Representative in Congress
from the Commonwealth of Virginia: Prepared statement.......... 71
BEYOND MICROFINANCE: EMPOWERING WOMEN IN THE DEVELOPING WORLD
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WEDNESDAY, JULY 12, 2017
House of Representatives,
Committee on Foreign Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10:11 a.m., in
room 2172, Rayburn House Office Building, Hon. Edward Royce
(chairman of the committee) presiding.
Chairman Royce. This hearing will come to order. If I could
ask the members here to take their seats.
This hearing is the fourth in our series of hearings to
examine the challenges and opportunities facing women
worldwide.
Today we consider some of the barriers to economic
empowerment that women face in developing countries and what
that means for them, what it means for their families, and what
it means for their communities.
Now, all countries stand to benefit from women's increased
economic participation. But the potential gains are
particularly great across the developing world, due to the
extent of the constraints that so many women face on their
ability to own property, their ability to access financial
services, or work outside the home. Consider that women in more
than half the world's countries face limits on their ability to
own or manage property, while women-led small to medium-size
firms in developing countries face an estimated $285 billion
credit gap.
As renowned Peruvian economist Hernando de Soto explained
when he testified before this committee, one of the primary
sources of stagnant growth and unrest in developing economies
is a lack of property rights, and the resulting exclusion of
workers, including women, from the formal economy.
These constraints directly harm women by preventing them
from working, from saving, and from controlling their own
future. But they also harm economic growth and they harm
stability. In fact, a multitude of studies project huge gains
of global GDP from increases in women's economic participation.
Perhaps that is why, after de Soto helped reform the
customary laws in his native Peru to make it easier for
Peruvian women to work and to own property, women's formal
labor force participation increased by 15 percent in that
country. As a result, Peru became one of the fastest-growing
economies in Latin America.
We have reason to be optimistic that this type of success
can be replicated. More developing nations are beginning to
understand the importance of women's economic inclusion and are
taking steps to reform their laws and to address inequities.
The U.S. has a critical leadership role to play in continuing
to promote such reforms. Our economic, humanitarian,
conservation, and many other interests around the world are
better served when women are empowered and when economies are
growing.
Fortunately, new technologies are making women's economic
participation more possible than ever. In decades past,
microfinance loans were championed to combat extreme poverty.
But microfinance is not a cure-all for those living in poverty,
particularly those women who face so many additional challenges
to their economic empowerment.
In recent years, however, an exciting array of financial
technologies, like mobile money, have sprung up across the
developing world. This presents tremendous opportunity for
impoverished communities and women in particular.
And so I look forward to hearing from our distinguished
panel today about how the U.S. Government can batter help
ensure women's inclusion in the rise of ``Microfinance 2.0.''
And I now turn to our ranking member, Mr. Engel, for his
remarks.
Mr. Engel. Mr. Chairman, thank you for calling this
hearing.
To our witnesses, welcome to the Foreign Affairs Committee.
Ambassador Verveer, I am especially grateful that you were
able to join us. I know you had to rearrange some travel to be
here. Your work as our country's first-ever Ambassador-at-Large
for global women's issues made a lasting difference all over
the world. And I hope that the administration sees the value of
this position and appoints a new Ambassador soon, along with so
many other positions at State awaiting nominees.
And I want to thank Dr. Suri and Ms. Iskenderian. I hope I
didn't butcher that. Thank you so much. We look forward to all
of you testifying.
We use the word ``empowerment'' a great deal when it comes
to women's and girls' issues. And honestly, I think it is a bit
of a misnomer. Women and girls are powerful and we know what
happens when that power and potential are unleashed--
communities thrive, local and global communities grow,
societies prosper and become more inclusive and equitable. If
women were full participants in the global economy, we would
see an additional $12 trillion to $28 trillion in growth in
global GDP by the year 2025.
Certain innovations, such as microfinance and mobile
banking, have driven progress in women's economic
participation, but they aren't close to a silver bullet. A
woman without a mobile phone cannot take advantage of these
tools. A woman without a birth certificate might not even be
able to open a bank account. And in too many places around the
world much bigger roadblocks stand in the way of women
exercising their full potential. Roadblocks caused by poverty
or lack of opportunity or by legal barriers or cultural and
societal norms that treat women as second-class citizens.
So when it comes to promoting economic access and
participation for women, I think we should focus on getting
these obstacles out of the way and make it easier for women and
girls around the world to put their power to work.
Now, in my view, making economies more inclusive for women
is simply the right thing to do. It is just wrong that women
anywhere are denied access to the same economic opportunities
as men. And that is true in the United States as well. We might
not want to deal with it, we might not want to confront it, but
it is true.
But this is the Foreign Affairs Committee, so we also need
to ask: Why is women's economic opportunity a foreign policy
priority? Well, it is easy: All those benefits of women's full
economic participation I mentioned earlier--stronger, more
stable societies--are also in our national interest. We want to
see economies thrive, governments become more responsive,
countries become stronger partners on the global stage.
Full participation of women is directly tied to these
outcomes. So from a strategic standpoint, this is good, smart
policy that strengthens American security.
The aim of our policy then should be to identify and meet
the challenges that hold women back from full economic
participation. When we start to look at those challenges, we
find that women's economic participation is closely tied to a
range of other issues that disadvantage women and girls in the
developing world.
For example, a young girl who is denied an education won't
become financially literate or learn the skills needed to
compete in the marketplace. Girls forced into child marriage
won't have a chance to contribute to their local economies.
Women who are victims of gender-based violence and domestic
abuse are less likely to get ahead economically.
Perhaps most importantly, access to quality healthcare,
including family planning, is critical to women's economic
success. The evidence is indisputable: Improving women's access
to contraception improves their economic well-being. Women who
are able to plan and even delay childbirth are more likely to
get an education, raise their standards of living, and climb
out of poverty.
That is one reason American policy has focused on expanding
access to family planning around the world. These efforts have
seen good results. In the 27 countries with the biggest USAID-
supported programs, the rate of modern contraception use has
risen from under 10 percent a half century ago to 37 percent
today, a good jump, but it shows we still have a long way to
go.
Now, the Trump administration has said that it supports
efforts to empower women and girls around the world, but its
budget proposal tells a different story. The Trump budget
completely zeros out funding for international family planning
and reproductive health and eliminates American support for the
United Nations Population Fund, the largest purchaser and
distributor of contraception globally.
On top of that, the administration has reinstated and
expanded the global gag rule, which we know has devastating
effects on women's health around the world. This is a disgrace
which will set women back across the globe.
Addressing women's economic participation requires a broad-
based, integrated, detailed-oriented, and comprehensive
approach that deals with all the issues I mentioned, plus a
host of others. The wrong approach is to cut our diplomacy and
development by nearly a third.
Fortunately, Congress has the last word on how much we
spend on foreign policy priorities, and I will continue to
fight for a robust investment in these areas. So I look forward
to hearing from our three excellent panelists on these issues.
And I thank you again, Mr. Chairman, for calling attention
to this issue.
Chairman Royce. Thank you very much, Mr. Engel.
So this morning we are pleased to be joined by a
distinguished panel, which includes Ms. Mary Ellen Iskenderian.
She is president and CEO of Women's World Banking, which is a
nonprofit devoted to helping low-income women in developing
countries access key financial tools and resources.
And we have Dr. Tavneet Suri, associate professor at the
MIT Sloan School of Management. She focuses on the impact of
digital finance services in developing economies.
And we have Ambassador Melanne Verveer, who served as the
former Ambassador-at-Large for Global Women's Issues at the
State Department. She currently is the executive director of
the Georgetown Institute for Women, Peace and Security.
Without objection, the witnesses' full prepared statements
will be made part of the record. Members are going to have 5
calendar days to submit any statements or questions or any
extraneous material for the record. And if we could ask
everyone to summarize your remarks that would be best, and then
we will go to the questions.
So, Ms. Iskenderian, if you would like to start.
STATEMENT OF MS. MARY ELLEN ISKENDERIAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, WOMEN'S WORLD BANKING
Ms. Iskenderian. Thank you, Mr. Chairman.
Members of the House Foreign Affairs Committee, thank you
for inviting me to speak with you today. My name is Mary Ellen
Iskenderian, and I am president and CEO of Women's World
Banking.
For nearly 40 years we have listened to low-income women in
developing countries describe their need for financial services
and then worked with local banks, insurance companies, and,
increasingly, cell phone companies to tailor convenient and
affordable savings, insurance, and credit products to meet
those needs. Women's World Banking currently works with 49
partners in 32 countries to reach 44 million clients.
But Women's World Banking can't do this alone. The Global
Findex tells us that 1.1 billion women, more than half of the
world's unbanked population, do not have an account at a bank,
while hundreds of millions more do not have access to the full
set of financial products. In addition, women own roughly one-
third of the 200 million businesses in emerging economies that
have no or insufficient access to credit.
Providing these women with basic financial services, that
fundamental first step toward economic empowerment, can unlock
unprecedented economic growth and job creation and can have a
direct impact on development outcomes such as health,
education, food security, and water and sanitation.
Women spend, save, and invest money in profoundly different
ways than men. One such difference: When women have discretion
over their financial choices they prioritize spending on their
families. On average, women spend 90 cents out of every dollar
earned on education, healthcare, and housing, in comparison to
men's 60 cents.
Improving a woman's financial access brings with it a
multiplier effect that will be critical to realizing the
potential of financial inclusion for reducing poverty and
driving economic growth.
I am pleased to note that you have entitled this hearing
``Beyond Microfinance.'' The traditional microfinance
institutions established an important principle: Low-income
people and women in particular can borrow responsibly. But over
the years we have learned that, like all of us, low-income
people have complicated financial lives that require more than
just a one-size-fits-all microloan.
Fortunately, a broad range of providers, including
mainstream commercial banks and insurance companies, as well as
payments providers, mobile network operators, and fintech
companies, has emerged to meet these needs.
Yet low-income women face a number of barriers that hinder
their access to these services. I will touch briefly on just
three of them along with some potential solutions.
First, millions of women lack the documentation and other
forms of identification to open even a simple savings account.
India has recently implemented an innovative biometric ID
system that has dramatically expanded access to financial
services. Elsewhere, tiered ``know your customer'' requirements
allow women to open no-frills savings accounts with minimal
documentation.
The second barrier women face is a lack of collateral.
Women generally have fewer assets to pledge to a bank and in
many countries are legally barred from owning or inheriting
land. In response, some countries have established movable
collateral registries that better reflect the types of assets
women can provide to satisfy bank requirements.
Finally, more than 1.7 billion women in low- and middle-
income countries do not even own a cell phone. This lack of
access to technology, combined with lower financial and digital
literacy, prevents them from fully utilizing digital financial
services. Once women gain access to their own phone and some
basic training, however, their usage levels parallel men's.
Despite these barriers, I am optimistic about the
opportunities presented by women's financial inclusion. The
United States can play an important role in accelerating those
opportunities by joining other developed countries that are
investing in women's financial inclusion, often led by their
country's gender Ambassadors.
The United States can use its influence at the G-20 and
other fora to push for implementation of more national
financial inclusion strategies that have explicit gender
targets. USAID, OPIC, and even Ex-Im could catalyze more
private sector investment by including requirements in their
programs to serve women. They could also engage in public-
private partnerships that serve to derisk private sector
investment.
Distinguished committee members, thank you for calling
attention to the role that women's financial inclusion plays in
building stronger families, communities, and economies.
[The prepared statement of Ms. Iskenderian follows:]
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Chairman Royce. Dr. Suri.
STATEMENT OF TAVNEET SURI, PH.D., ASSOCIATE PROFESSOR OF
APPLIED ECONOMICS, SLOAN SCHOOL OF MANAGEMENT, MASSACHUSETTS
INSTITUTE OF TECHNOLOGY
Ms. Suri. Thank you, Mr. Chairman Royce, Ranking Member
Engel, and members of the committee for hosting this hearing
and giving me the opportunity to provide testimony on
empowering women in the developing world. I would like to offer
three main messages today.
First, although there has been truly remarkable progress in
alleviating global poverty across the world, the progress of
women has not kept up with that of men. We have a long way to
go toward gender equality in the developing world. For example,
only 39 percent of the total workforce is female, only 38
percent of businesses are female-owned even in part.
Second, all that said, it turns out that a number of
private sector digital financial technologies are helping even
poor women in remote areas join the economy and manage their
money more effectively with profound effects on their economic
status and empowerment.
Third, to date, though the private sector has created and
provided these tools at scale, international aid played a
critical role. In this case millions of digital transactions
each day in poor countries can be traced back to be a small
decision by the U.K.'s international development agency to fund
a pilot of a new idea. Good, data-driven thinking which brings
together government and private sector innovations can bring
big payoffs.
This hearing is aptly titled ``Beyond Microfinance.'' For
many years microfinance was thought to be key to lifting poor
women out of poverty. We now have very strong evidence from
seven different countries showing that it simply does not.
There is now a consensus amongst economists that this method of
putting poor people into debt is not an effective long-term
poverty solution.
But there are new findings suggesting that another area of
finance does empower women: Mobile money. In the U.S., services
like Venmo or Apple Pay are just taking off. So it may be
surprising to hear that Kenya's mobile money system, M-PESA,
has been around for 10 years. It lets people send money to one
another with just a text message, so it works even on the
simplest mobile phones.
And this technology has taken the developing world by
storm. There are twice as many mobile money payments every day
as there are PayPal ones. There are over 400 million accounts
in the developing world, more than half of these in sub-Saharan
Africa alone.
With my colleague Billy Jack at Georgetown, over the past 8
years I have been studying what happened to communities in
Kenya as M-PESA spread across the country. The first thing we
saw was how families deal with financial emergencies. The poor
are never more than one emergency away from financial disaster.
When a child gets sick, you will do whatever you have to do
help them get better. The same holds for Kenyans, but in many
families this meant reducing the amount of food, other basic
necessities, or even pulling their kids out of school to be
able to pay for medicine.
When M-PESA arrived, families could now phone a friend for
help. They could get money from a cousin across the country or
a friend in the city. Then in turn, when that friend had an
emergency, they would repay the favor.
A few years later we looked at the broader impacts of
mobile money. When M-PESA came to an area, it reduced poverty,
it lifted an estimated 194,000 households, 2 percent of Kenyan
households, out of extreme poverty.
When we dug deeper, we found something we are not used to
seeing: The anti-poverty effects were much stronger for women.
In fact, an estimated 186,000 women in Kenya were able to
switch from subsistence farming into business and sales
occupations.
Just giving women more privacy, flexibility, control, and
the ability to manage the kinds of financial risks they face
seems to have been a massive economic boon to them. And all
that from a simple technology. Remember, it doesn't give people
cows or loans or any entrepreneurial savvy that they didn't
have before.
Our results on women's empowerment are now supported by
``fresh off the presses'' work showing that cash grants have
effects on male-run businesses and not on female-run
businesses. But this is in part because even when women are
given cash, often their husbands control where it goes. And in
India, making government welfare payments electronic and giving
women control of those payments by depositing the cash in their
bank accounts improved their economic outcomes.
One key message from the M-PESA story is how it started: An
idea of two employees at the private cell phone company
Vodafone in the U.K., a pilot paid for by the U.K.'s equivalent
of USAID, and a resulting, scalable, highly profitable business
model.
There is essentially no private sector R&D in developing
countries and aid money here acted as crucial R&D capital for
the firm. Supporting these sorts of digital innovations and
technologies will be key to closing the gender gap in economic
opportunities in the developing world.
Thank you again for having me, and I will look forward to
any questions you might have.
[The prepared statement of Ms. Suri follows:]
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Chairman Royce. Thank you.
Ambassador Verveer.
STATEMENT OF THE HONORABLE MELANNE VERVEER, EXECUTIVE DIRECTOR,
GEORGETOWN INSTITUTE FOR WOMEN, PEACE AND SECURITY, GEORGETOWN
UNIVERSITY
Ambassador Verveer. Chairman Royce and Congressman Engel
and members of the committee, thank you for the opportunity to
speak to you today on an issue of critical importance:
Increasing women's economic participation and empowerment in
developing nations.
Mr. Chairman, let me begin by thanking you for your
leadership in focusing on global women's issues. They are in
the vital interest of the United States. Countries with
declining living standards and inequality are more unstable and
pose greater challenges to our own interests and our own
security.
Empowering women and girls is fundamentally a moral issue,
a human rights issue. It is also smart and it is strategic. It
advances our foreign policy as it tackles some of the most
pressing issues that confront the globe and America's
leadership.
This hearing has to do with one of the great challenges
worldwide: How do we grow economies, create jobs, and ensure
inclusive prosperity? Today there is a growing body of
empirical evidence demonstrating the positive impact of
investing in women and girls. From the World Bank, to the World
Economic Forum, from countless think tanks and private sector
analysts, we know that women represent one of the most powerful
economic opportunities the world has ever seen. The McKinsey
Global Parity Report found that closing the global gender gap
could drive more than $12 trillion in growth by 2025 if--and
this is a big if--much more is done to tackle the obstacles
that continue to hold women back.
Micorenterprise development has played an important role in
lifting up women at the bottom of the pyramid. However, for
them to grow out of their subsistence businesses is not easy.
As you have heard, credit is not enough. An intensive package
of high-potential interventions is required.
Studies show that women-run SMEs are accelerators of
economic growth. SMEs occupy that critical space in economies
where jobs are created and economies grow.
Yet, if women are to unleash their potential we must
confront and reduce the barriers they confront. They face
greater roadblocks than their male counterparts in starting and
expanding businesses. Discriminatory laws and customs impede
women's efforts. Violence against women is a global scourge. In
some places women have no rights to inheritance nor property
and very little in the way of legal protection.
Women often lack training, mentors, and networks. Access to
technology, markets, and access to finance, as you have heard,
is particularly challenging. For female entrepreneurs to
unleash their potential, addressing these obstacles will be
essential.
Women are also vital to the agriculture sector, and in many
developing countries they are the backbone of their economies.
Yet subsistence-level women farmers do not have equal access to
resources, which limits their productivity. A seminal FAO
report showed that when women farmers can operate on a level
playing field, including having land ownership, they can
increase their individual yields significantly.
Technology has the potential to revolutionize women's lives
in the developing world by providing critical access to
information, mitigating health and safety risk, and creating
opportunity for financial security and independence. Yet mobile
technology, as essential a tool as it is, is still out of reach
for many poor women. Its greatest impact will be in mobile
banking, which enables women to make the financial transactions
that they need and to keep their money safe. But the genuine
good news here is that strides are being made in digital
financial services that are indeed transforming women's lives.
The challenge we are addressing today is multifaceted, as
must be any solution. No one investment constitutes a silver
bullet. Many development investments are interrelated. Programs
like women's health, education, freedom from violence, and
legal rights are critically important to economic empowerment,
and a Federal budget that drastically cuts these programs will
only shortchange women, but not only the women around the
world, it will also shortchange the interests of the United
States.
I hope that the committee will also urge the administration
to fill the position of Ambassador for Global Issues for the
reasons that I have laid out in my testimony.
Today some of the largest and most farsighted companies
understand that engaging in partnerships to advance women
brings benefits both to society and to companies themselves.
Public-private partnerships recognize that no one sector has
the monopoly on competencies that are required in this field,
nor the resources, but together much can be achieved. And I lay
out ways that companies today are engaged in these partnerships
through value chain sourcing, digitizing financial services,
and so much more.
The United States should continue to catalyze, support, and
participate in impactful and innovative partnerships among many
stakeholders.
Thank you, and I look forward to your questions.
[The prepared statement of Ambassador Verveer follows:]
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Chairman Royce. Thank you. I thank the panelists. And when
we look at your testimony there are a lot of things that jump
out that are really quite surprising.
Dr. Suri, you mentioned your research on mobile phones in
Kenya, I think. Again, what you just said was 186,000 women
made the decision as a result of this new form of employment to
move from subsistence farming to move into business or to move
into sales. And yet maybe you didn't see the same changes with
men, but you saw this enormous shift. You know, I think this is
key. But could you explain maybe a little more of why you think
this occurred?
Ms. Suri. Thank you, Chairman Royce.
So that is exactly right, we did not see men shift
occupational choice or switch their kind of decision of where
their income is coming from, but women did. And that number is
correct, 186,000. So we can't pinpoint exactly why, but we can
tell you kind of the two sort of leading hypothesizes, which
are supported by the other work that was in my testimony.
So one of them is that what M-PESA mobile money did was
provide extra resilience. So you might have heard the term
``high risk, high return.'' Women weren't taking advantage of
high risk, high return because they were worried about the
downside risk. They were worried that if something goes wrong,
I still need to feed my kids, educate my kids.
And so when mobile money came along and gave them this
protection from the social network, they were able to take
advantage of these high risks, high return opportunities like a
business like sales. So I think that is part of the story.
I think the other part of the story is it gives them
control. A lot of these women actually do have cell phones and
they are able to save on their phones through mobile money, and
it gives them a sense of access and control to what is on their
phone.
And so I think both of those components probably explain
these findings for women.
Chairman Royce. So they exert ownership or they exert
control----
Ms. Suri. Absolutely.
Chairman Royce [continuing]. Over what is one's property.
Ms. Suri. Yes, absolutely.
Chairman Royce. And that is something that men maybe
already have, but now that women are empowered in that way they
basically have a secure property right here, and that lets them
assume greater risk, as you said, which is the driver of
innovation, driver of economic growth.
Ms. Suri. Yes. I like what you said when you opened. You
said something about women controlling their future. I think
this allows women to control a bit more of their future.
Chairman Royce. Another question here, and I will ask the
panel. Developing countries are increasingly coming to
recognize the importance of women's economic inclusion. So we
see countries from Jordan to Kenya, as you pointed out, to
Nicaragua, they have reformed their laws in recent years to
improve women's property rights. But this change takes time.
And we have a Millennium Challenge Corporation here in our
diplomacy that we use for leverage, and we have had some
success in encouraging reforms in exchange for U.S. investment.
And I would just ask the members of the panel here, how can we
encourage more reforms and what should we be focusing on in
that effort?
Ambassador.
Ambassador Verveer. Well, I think that is an excellent
question, Mr. Chairman. And it is true that without the kinds
of reforms and legal protection women are not able to progress
as they might in the economic sphere.
I think what the MCC has done over a longer-term trajectory
as it is organized to do, it certainly has a very strong gender
component to its work and also is holding governments
accountable using the leverage of America's investment, as you
say.
I think the private sector too. Mobile companies, for
example, who go in to ask for expansions of regulatory
opportunities could also be raising issues about women's legal
protections or ways in which women can enhance their standing.
So I think we need a combination of people who talk to
governments, as each and every one of you does when you are on
a codel, or when they are coming here, to raise these issues.
You know, we talk about them as women's issues, but they
are far more than women's issues. They peculiarly affect women,
there is no doubt about it, but they have a great deal to say
about all of society and certainly how economies function. So I
think we should not diminish the aggregation of all of the ways
to influence governments in making the right decisions.
Chairman Royce. And I wanted to ask Ms. Iskenderian this
question too.
Ms. Iskenderian. Thank you, Mr. Chairman.
Just to build on Ambassador Verveer's comments, it is a bit
of a hackneyed phrase, but what gets measured gets done. And I
think one thing that MCC in particular, but certainly any other
agencies that are interacting with nations abroad and
developing countries, can insist that tracking the data,
tracking the number of women that are being served is done.
Only 34 percent of cell phone companies today that are
offering mobile money services even know the gender of their
clients. So we can't even really assess the nature, the full
nature of the problem until we actually know who is being
served, who is not being served, and how they may be different.
We saw, both of the panelists referred to this, huge
improvements in financial inclusion between 2011 and 2014 in
the runup to the Global Findex report. The biggest changes were
in those countries that had specific national financial
inclusion strategies that had specific gender targets. That
would be such an easy thing for us to include in anything that
we require of a government that we are providing funding to.
Chairman Royce. Very good.
My time has expired.
Mr. Engel.
Mr. Engel. Thank you very much, Mr. Chairman.
Ambassador Verveer, let me ask you this. Thank you again
for coming here. I have two questions.
While empowering women economically is certainly in line
with America's values, it is also in America's U.S. national
security and foreign policy interest because it promotes peace
and stability in fragile states. You have done a lot of work in
Georgetown and during your time at the State Department as the
first U.S. Ambassador on global women's issues on the link
between women's economic empowerment and national security.
So I would ask you, in general, how does empowering women
promote U.S. foreign policy, national security, and economic
interests? And what role did empowering women economically have
in Rwanda in terms of economic growth, but also post-conflict
peace and stability?
Ambassador Verveer. Congressman Engel, I think the
connectivity between women's economic agency and participation
and peace and security is one that is increasingly linked and
one that we are recognizing as critically important. And I know
that this panel had a previous hearing in this area of women,
peace, and security, and what their agency represents.
We know that in those societies where the condition of
women is one where they are oppressed and denied their rights,
those conditions often are the first signs of increased
instability and potential conflict. I often feel as though
women are the canaries in the mines. Look at what is happening
to the women and you will have a sense of what is to come down
the pike, if we have the vision and the ability to look at
those conditions and take them seriously.
I think one of the most important elements as we take
hopefulness out of situations where countries are coming out of
conflict is to appreciate that you could have the best peace
agreement, but if the key issues that affect the people on the
ground--and one of the critical ones is their economic future--
are not weighed into those agreements and are not executed in a
recovery process, you are not going to have that long-term
sustainable peace that an agreement hopefully would guarantee.
And in a place like Rwanda, for example, there was a
recognition, and while so many lives were lost, that women had
to play a critical role. Today they comprise some 60 percent of
their Parliament, the highest women's participation in
legislatures in the world. They are active in ministries. They
are active in every facet of the decisionmaking processes in
Rwanda. And I think to some extent, whatever you think of
President Kagame, he has recognized that the empowerment of
women has played a major difference in moving his country
forward.
In my testimony I note one of the projects that I have been
involved in included a private sector company, Kate Spade &
Company, which made a business investment in Rwanda
specifically for business results, but also to empower women.
And what we have seen in the case studies that have been done
on that investment is what a difference it is making, not only
in terms of their business investment, but particularly in
terms of women's economic empowerment and social progress for
those women and their community.
So, again, the link between economic participation,
economic viability, opportunity, and sustainable peace and the
amelioration and the avoidance of conflict go absolutely hand
in hand.
Mr. Engel. Thank you.
Let me ask Ms. Iskenderian this question. What steps do you
believe the administration should take to promote the economic
empowerment of women? How and why should they target women from
poor rural communities just as equally as those living in urban
centers that already have access to the formal economy or
banking? And finally, what good does incentivizing legal and
policy reform do for women from all socioeconomic backgrounds?
Ms. Iskenderian. That is a tall order.
Mr. Engel. And you have 18 seconds.
Ms. Iskenderian. Thank you.
I think just to make one clarifying point, that urban-rural
divide that you mentioned. Yes, one of the very exciting things
about mobile money is that we are able to reach rural
populations that have been so excluded.
But just because a woman is in an urban area doesn't
necessarily mean that she has access to financial services. In
far too many places we still see the formal finance sector has,
for example, very, very high minimum balance requirements.
There is a very strong sentiment on the part of low-income men
and women that the financial sector doesn't really want them.
But I think for women there is also this emotional distance, so
to speak, that they really do not feel respected, their savings
are not necessarily wanted.
But those banks that do make that commitment, that do make
that leap into this new market, find that women are really
excellent clients. They tend to be the savers, their savings
accounts are the stickier savers. They are more willing to buy
cross sold products than men are. They buy more insurance than
men do. Lots of very good benefits.
And so I think to whatever extent this administration can
continue to foster that support specifically from the private
sector. As I mentioned in my remarks, I think there is a great
deal we can do in derisking. We have seen a number of the
development finance institutions from other developed countries
are providing that kind of support, first-loss guarantees, that
first step into a market that supports a private sector player.
But then as they get used to that market, and they see that
this is a good form of investment, that support can be
lessened.
Mr. Engel. Thank you.
Mr. Chairman, before I go back, I would just ask for
unanimous consent to enter CARE's written testimony into the
record.
Chairman Royce. Without objection.
[The information referred to follows:]
******** COMMITTEE INSERT ********
Mr. Engel. Thank you, Mr. Chairman.
Chairman Royce. We go now to Ileana Ros-Lehtinen of
Florida.
Ms. Ros-Lehtinen. Thank you very much, Mr. Chairman, and
thank you to the ranking member, for convening this important
hearing. And thanks to our witnesses for excellent testimony.
With so much going on around the world, the Syria conflict,
the Iranian nuclear deal, North Korea's ballistic missiles, and
everything in between, lamentably we often overlook the plight
of women in the developing world and our role and our
responsibility for helping these women. We know that women in
many developing countries oftentimes face insurmountable legal,
cultural, and religious barriers to becoming the full and equal
members of society that must be their natural right.
Not only is this a travesty for the rights of women, but in
many of these countries when women have the same rights and
access as men, the transition from developing to developed
countries becomes a reality.
Preventing half of your population from access to the job
market and thus the financial tools to help promote economic
growth is just unconscionable. It is imperative that we discuss
ways to correct this and that women in developing countries
have access to the tools and the services so they can have an
important role in their countries.
We must also remember that it isn't just the economy to
which they are being denied access, it starts from the time
that they are children. Oftentimes women are not even
registered at birth, putting their future and their well-being
in danger.
That is why I have always been proud to support my good
friend Steve Chabot in his efforts to pass the Girls Count
Act--and thank you, Steve, for that--to ensure that these girls
get birth certificates and are registered.
My goodness, as a former Florida certified teacher, I know
how important education is to all children, but for women in
developing countries before we talk about getting them access
to financial tools, we really need to ensure that they have
access to a real education. That is why I have authored bills
to provide Pakistani girls and women access to scholarships so
they can get the education they require and why I am
cosponsoring Steve's Protecting Girls' Access to Education Act.
For women in developing countries we need to start changing
the fundamental ways in which they are viewed from the moment
they are born if we are ever going to have a chance at their
access to the financial services later on, and that is a tall
task because of the legal and cultural barriers they often
face. Women in about 18 of the world's economies,
unfortunately, including many in the subcommittee that Mr.
Deutch and I head, the Middle East and North Africa
Subcommittee, require permission from their husbands or legal
male guardians to work outside of the home, if they are even
allowed to work at all.
So I would ask the panel, how do you begin to make a change
when so much discrimination is ingrained in the cultural norms
and the societal norms and the values, when women from the time
of birth are not viewed as equal to men? And how can we in the
United States leverage our assistance and our role in the
global stage effectively enough to promote the change that is
needed?
Thank you.
Ambassador.
Ambassador Verveer. Well, Congresswoman, thank you for
those remarks and for your leadership.
It is not all a dismal story. There is certainly a long
road to climb and a journey that women are on all over the
world. But there has indeed been progress, and a lot of
progress has come out of the leadership of our diplomatic and
development efforts, as well as certainly those of others.
And I think one of the key issues you mentioned is
education. It is absolutely fundamental for a girl to be
educated. Malala took a bullet just to make the case that girls
have a right to an education.
It is that megachange component, because we know all of the
things that come out of an educated girl in terms of the
benefits that take place over her lifetime, the children she
raises, the kind of job she has.
Ms. Ros-Lehtinen. Thank you, Ambassador.
Any of the other two?
Thank you, Dr. Suri.
Ms. Suri. Thank you, Congresswoman.
I guess I would say I think there are two parts of this.
Education, I completely agree. I think that is also tied to
financial inclusion. We have some work in Kenya showing that
when we gave households access to loans for these water tanks
where you can store water, the girls went back to school.
So understanding not just attitudes, but what is actually
preventing the girls from going to school, what are they doing,
and how do we try to alleviate those constraints can be
important.
I also want to mention some work on India which is
fascinating, where they required some districts to have a
third-of-women participation in local government. And they
looked at the decisions then that the women made versus the
men. And the women of course have different preferences than
men. They chose different public goods and different
investments than the men. Hard to weigh up which ones are
better or worse.
But what was really fascinating is they also did some
surveys on the ground of people and they saw that people's
views of women started to change when women started to
participate in local government and they saw women making
decisions about what the community needed or not. So I think
that is also something----
Ms. Ros-Lehtinen. Thank you very much. I am sorry, we ran
out of time. Next time.
Thank you. Thank you, Chairman Royce, and thank you, Mr.
Engel, for convening this important hearing. And thank you to
Lois Frankel. I know that she was one of the engines behind
this hearing. Thank you, sir.
Chairman Royce. Thank you very much, Ileana.
Albio Sires of New Jersey.
Mr. Sires. Thank you, Mr. Chairman, for holding this
hearing. And I always have been very interested in this topic.
I grew up in a household where machismo was it. My father would
not allow my brother and I to hang around the kitchen. And I
still remember the day when I was helping my mother make the
bed where he picked me up and he spanked me because I was
helping my mother. He always said that was the woman's domain.
But a funny thing happened along the way. At the age of 11,
my parents and I and my brother, we came to America. My mother
got a job first. All of a sudden, things changed in the house
so completely. My father was in the kitchen helping her because
she came in late. My father was helping out with the wash. And
I always used to tell my father, I said, ``Whatever happened to
all those things that you taught me in Cuba that I shouldn't
do?'' And I think he was kind of embarrassed for the way things
changed. Then later on he got a job and all those things went
down the tubes.
I also remember my first day teaching. I taught in a school
with a lot of Hispanic students and since I was bilingual I was
the chaperone of the school dances. And the principal said,
``You have to come.'' And I used to hang around in a corner
with about 12 mothers who used to come to the high school
dances.
I mean, it is fascinating. And, fortunately, I had two
great college professors. I went to a Jesuit school in New
Jersey which was only men, but when I got there it had changed.
And I had the first woman professor ever and the second woman
professor. They were fascinating and this topic was always
brought up.
But I cannot agree with you more that education and
economic opportunity changes the whole formula. And I think
that is what we should strive for when we want to help
somebody. You know, there are a lot of things that we can do,
but I think education is certainly our economic opportunity.
Because I saw that my mother brought the first check and the
whole thing changed, I mean overnight. And to this day I find
the whole thing fascinating.
So I guess what can we do to continue to provide economic
opportunity for women, because I think that is the only way
that you are going to be able to change it, and obviously
education also, especially in the Western Hemisphere. I think
that machismo is still pretty much alive in the Western
Hemisphere in all these countries. My district is obviously a
very predominant Hispanic district, I represent just about
every country in the Western Hemisphere that speaks Spanish,
and I hear these stories.
And I am concerned with some of these cuts for these
programs for women, you know, how we are going to impact that
in the Western Hemisphere. Sorry to take so much time. But can
you talk a little bit about it?
We will start with you.
Ms. Iskenderian. Thank you, Congressman. And thank you for
that story. It is absolutely what we see on the ground. As soon
as the financial situation shifts a little bit, the dynamic in
the household changes, a lot of other things can change as
well.
I think I just would like to build on some of what we were
talking about with education, because what we see far too often
is some of that really fantastic benefit that we all know about
educating girls gets lost if we also don't prepare them
financially. So part of that education giving them financial
literacy skills.
And what we are seeing in our work on the ground, also
getting a savings account, ideally in their own names, as early
as possible. We have been working with an NGO in Africa that is
graduating 180,000, 200,000 young girls from secondary school
every year, tremendous progress. But they are seeing those
girls married within a year, because they don't have savings,
they don't have life skills. They are not financially prepared
to go out in the world.
Mr. Sires. I always figured that one of the issues that
held my mother back was that my mother was 13 and my father was
23 when they started going out. I always told my father you are
going to be put in jail in America if you did that.
Can you?
Ms. Suri. Yes, thank you, Congressman.
I guess I will just add on some of the stuff that was said
earlier and something that Ms. Iskenderian talked about. If you
look at the mobile money story, the technology and the
innovation was seeded by aid money, by a donor. It allowed the
private sector to kind of derisk what they were doing and
provide a set of tools that affect women.
I think thinking through how we provide that R&D capital
for the private sector and emerging economies is really
important, because they don't have R&D, they don't do R&D
traditionally. But if we can derisk private sector investments
in these countries I think we can get a whole set of new
technologies and tools to women that I think will really
benefit them.
Mr. Sires. I am sorry I ran out of time. Thank you, Mr.
Chairman.
Chairman Royce. Dana Rohrabacher of California.
Mr. Rohrabacher. Thank you very much, Mr. Chairman. And
again I want to point out that the leadership of Mr. Engel and
Mr. Royce have again demonstrated that there are a lot of areas
that we can work together on and that we are choosing issues
like this that are just somewhat out of ordinary. And so I want
to thank the leadership for this hearing today and making this
issue.
I would like some more specifics from you. You are the
experts, and I want to know what countries are the good guys
and what countries are the bad guys. And I guess, first of all,
what countries would you say are on the super good guy list and
what are the countries that are on the super bad guys list?
Ambassador Verveer. Well, I don't know if I would call them
the good guys and the bad guys necessarily. But there are
plenty of rankings today, Congressman, and whether it is the
UNDP's human development rankings or the World Economic Forum's
gender gap rankings.
Take the World Economic Forum. Nobody accuses them of being
a women's organization. And yet they annually look at the
gender gap between men and women on four metrics in any given
country: Health, access to education, economic participation,
and political participation.
Mr. Rohrabacher. Okay.
Ambassador Verveer. And when you look at those rankings,
the Scandinavian countries and others are at the top. And then
keep going down and you find a lot of the countries that are in
the most difficult straits today, conflict ridden, poverty
stricken, capturing the headlines in not the most favorable
way. They are the places where gender equality is clearly at
the bottom.
Mr. Rohrabacher. Are there any poor countries--we are
saying poor countries versus rich countries then--are there any
poor countries that have a really good record on this?
Ambassador Verveer. That is a very good point, because if
you look at the WEF's rankings you will find some anomalies in
there, countries perhaps in Latin America and Central America
or in Africa, because they are looking at the gap based on what
they have. And as they are closing the gap within the context
of that country they are making progress.
Mr. Rohrabacher. Okay. Give me some specifics.
Ambassador Verveer. I don't have the rankings in front of
me, unfortunately.
Mr. Rohrabacher. There are some good guys at the lower end
of the scale, a lot of bad guys. One of the reasons that their
countries are poor is because they have oppressed women. And I
think that it is very clear that if you oppress women you are
oppressing one half of your population and thus you are cutting
yourself off from a lot of economic activity.
But do you have some names for me?
Ambassador Verveer. Well, you know, several years ago the
Arab Development Report was published and it has been since
updated. Arab intellectuals wrote that report. It had
considerable impact in the region because one of the clear
indices of why they were not progressing economically in ways
that they should was the state of women's conditions.
Mr. Rohrabacher. Sure.
Ambassador Verveer. Lack of education.
Mr. Rohrabacher. I understand. I am trying to get a little
less philosophy out of you and some more specifics.
Ambassador Verveer. Well, I am talking about the region.
Mr. Rohrabacher. Okay. Give me some names of countries. Do
we have any names of country? Give me a name of a couple bad
guys we should have on our list and say, ``Hey, why do you
treat women that way in your country?''
Ambassador Verveer. Look at the situation in Pakistan, for
example.
Mr. Rohrabacher. Okay, Pakistan.
Ambassador Verveer. Or the situation in Yemen.
Mr. Rohrabacher. Okay.
Ambassador Verveer. You know, these. And then look at the
state of those countries. Certainly at the bottom in terms of
equal opportunity and----
Mr. Rohrabacher. Thank you, that is what I was really
looking for, Pakistan and Yemen. Of course, let's keep that in
mind when we are dealing with those countries.
By the way, let me just note women's role in the military
in various places. The Kurds and the Israelis seem to have
women playing a major role in the security of their country.
Are there countries, other countries like that, that we can--
the United States has really increased the role of women in our
military. Who are the good guys and bad guys in terms of
utilizing women within their government and their military?
Ambassador Verveer. You have raised another critically
important issue, the participation of women in the security
sector. I think there are some seven or eight ministers of
defense now in the European countries who are really moving
this agenda forward. As you mentioned, we are making some
progress.
It is still a significant problem in U.N. peacekeepers, for
example. There are very few women in the ranks of peacekeepers.
Yet a major part of their mission is the protection of
civilians, and it is often women who are in the most difficult
straits in the places where they are keeping the peace.
In military service and in police service, whether it is in
Afghanistan or other places of conflict, to raise the
participation of women.
Mr. Rohrabacher. Well, let's just note--Mr. Chairman, thank
you. And we note here that on Capitol Hill it was a female
police officer that saved the lives of several Members of
Congress who were under attack.
Thank you very much, Mr. Chairman.
Chairman Royce. Thank you, Mr. Rohrabacher.
Ami Bera of California.
Mr. Bera. Thank you, Mr. Chairman.
I was listening to my colleague, Albio Sires, talk about
his upbringing. When I think about my own upbringing in an
immigrant household, both my parents worked, but my mom had
multiple jobs, making sure me and my two older brothers got
ready for school, making sure that we had something to eat,
making sure that we did our homework, and the importance of
empowering women to be kind of that glue.
I would like to ask a couple questions. I think, Ms.
Iskenderian, you talked a little bit about kind of going
cashless. India is doing a pretty interesting experiment right
now. And maybe it is not an experiment, it actually seems to be
going fairly well. And I would be curious about the thoughts of
going to this cashless economy and digital economy and the
impact that has both bringing women, but bringing everyone into
the traditional economy.
Ms. Iskenderian. Yes, it is truly remarkable, Congressman,
what India has been able to accomplish, and the government has
really just driven financial inclusion. They have, as I
mentioned in my remarks, instituted this biometric system. So
everybody has a thumb print, and that has been available to men
and women alike.
There are some things that we would love to see changed in
this, because when the government is then looking at financial
inclusion they are looking at household financial inclusion.
And so we don't always know, but when we dig into the data that
typically means that the husband has taken that biometric
information and opened the bank account rather than the wife.
But not in all cases. And we are very excited about the
opportunities. You probably heard recently about the
demonetization. India took several currency notes out of the
system. It was particularly difficult for women who still were
operating in cash and didn't necessarily have access to the
technology for a variety of reasons, including cultural and
social reasons. They didn't own the cell phone.
So we are eager to make sure that women are not left behind
in this exciting move toward the cashless economy.
Mr. Bera. Dr. Suri, did you want to add?
Ms. Suri. Yes, I am happy to add, and thank you for that
question. I will mention a couple of things on the digitization
in India which, like Ms. Iskenderian said, has been impressive.
When they started off I really didn't think they would succeed
at giving most of their population a digital identity.
I think there is a bunch of research now showing great
gains to this. One has been as they digitized people's identity
they digitized a bunch of the social welfare programs from the
government. And this has dramatically reduced corruption in the
government because you can't have fake people anymore in the
system and I can't sign up Ms. Iskenderian and pay her on the
side. So you see a reduction in corruption.
And then, accompanying that, we have seen some luck where
when women earn the money off the workfare programs, if it is
tied to a bank account that they have that is theirs, it
increases their labor force participation and their earnings.
So I think it can't be just digitization on its own
because, as Ms. Iskenderian said, that doesn't mean necessarily
financial inclusion in the way we think about it for women and
financial use. But when I can tie that digitization to now
financial tools and other things, then you do see this benefit
for women.
Mr. Bera. Ambassador.
Ambassador Verveer. Thanks, Congressman.
You know, one of the things that has always affected me
traveling throughout the developing world is how terrified
women are that the meager earnings that they may have will not
be safely kept, because either it will be taken from them
within their household or through bribes of one kind or another
that they have to pay for essential needs. And this overriding
concern is something that I think these changes that we are
talking about this morning begin to really address in a serious
way.
And I think today you see more and more of the governments,
as Dr. Suri said, taking their welfare payments, many of them
targeted to the woman, for education and health and essential
needs of her children, and, increasingly, that is coming in a
card. It is digitized in a card.
So the cash is gone. She can't be targeted in the way she
is used to being targeted and vulnerable. The corruption, as
Dr. Suri said, begins to be addressed, and that is serious
problem everywhere, as we know. And she goes with that card to
get the essential items that she needs for her family.
So this is revolutionizing that great fear that most poor
women have in keeping their earnings safe.
Mr. Bera. Great. Fantastic.
I yield back.
Chairman Royce. We go now to Joe Wilson of South Carolina.
Mr. Wilson. Thank you, Mr. Chairman.
And thank each you for being here today. This really has
been fascinating to hear. The cell phone use in Kenya--how
incredible, how positive.
And, Dr. Suri, the House of Representatives, with the
bipartisan leadership of Chairman Ed Royce and Ranking Member
Eliot Engel, has a long history of promoting women's economic
empowerment in developing countries through various pieces of
legislation, including funding for microenterprise development
programs focused on women entrepreneurs and last Congress'
Global Food Security Act, which supported improved property
rights and technical assistance for female farmers.
In a time of limited resources, where should we be focusing
our efforts now? Where can we get the best return on our
investment?
Ms. Suri. Great. Thank you, Congressman, for that question.
I think I would echo something Ms. Iskenderian said earlier
and something I have said already. One is measurement.
Measurement, measurement, measurement. We are still figuring
out what works effectively and what works best, and I think
trying to encourage measurement.
You know, we talked about property rights and how people
have changed laws around property rights. Changing laws isn't
enough because it might not actually be implemented, right? And
so understanding whether those laws have actually trickled down
to changing women's rights for inheritance is important. I
don't think we have an answer to that.
So I would say measurement is really important. Evaluation.
Understanding what works and then investing in the things that
work is really important.
And this ties back to what I was saying earlier. There is
not a lot of R&D capital-type stuff in these countries. And so
trying to be the provider of sort of the risk investment and
the measurement, kind of let's figure out what works and then
invest in that, allows us to kind of use that capital very
effectively, and then the private sector can build on sort of
the things we are finding.
So that is where I would see it.
Mr. Wilson. And we would look forward to, each of you, on
any legislation that we pass, for your advice on what we can do
better.
A side issue is that I have seen other organizations, like
the International Association of Credit Unions. I was present
in, of all places, Novosibirsk in Siberia, and it was so
encouraging to me to see the establishment of credit unions
where microloans were made to women to sell cosmetics door to
door. At that time, in the late 1990s, that was utterly
revolutionary in post-Soviet Russian Federation. So, over and
over, so much can be done.
And, Ms. Iskenderian, widespread lack of official
identification in developing countries disproportionately
affects women and girls, without which it is hard for them to
obtain even basic services such as a bank account. This
committee has passed legislation, the Girls Count Act, to
promote birth registration for girls in developing countries.
But for these women who do not have a birth certificate or
other official identification, what are some of the new
technologies that are helping them to gain access to important
financial tools?
Ms. Iskenderian. Thank you, Mr. Congressman. And thank you
very much to the committee for having supported that
legislation.
The lack of a birth certificate just stops a woman's
progress right out of the gate, literally. So as we were
referring earlier, the biometric identification tool is very,
very exciting.
And we are excited that there is going to be sort of
further south-south cooperation. India is now sort of going on
the road with their technology. We do quite a bit of work in
Nigeria where they have a similar technology. But where India
has literally a palm-sized piece of technology that they can
take out into the field and get the fingerprint. In Nigeria the
machine is like the size of this table. So getting the
technology right even with that great idea is absolutely
critical.
As I also mentioned in my remarks, something that is really
not a technology, but something as simple as reducing Know Your
Customer requirements for somebody to open a bank account with
a cell phone photo, basic identification.
In Nigeria there is a 150-page questionnaire that you have
to fill out regardless of what you are trying to do with that
bank account. When they instituted Know Your Customer
requirements that were tiered to open simple savings accounts,
you not only saw financial inclusion dramatically increase, but
you saw the banks, the private sector banks, going in. It was
now affordable for them to serve these customers because they
didn't have those heavy documentary requirements.
Mr. Wilson. And thank you for highlighting where it is
working and also suggesting changes where certainly technology
could be better.
Thank you. And my time is up. And, again, thank you so much
for all of you being here today.
Chairman Royce. Lois Frankel of Florida.
Ms. Frankel. Thank you, Mr. Royce and Mr. Engel, for this
hearing today. Terrific.
Thank you to all of you. And thank you for all your work.
I am going to assume that you all agree that the President
needs to fill this position of Ambassador of Global Women's
Issues as soon as possible. That is something you all agree on.
Yes. Okay. Yes, you are all shaking your head yes.
And Representative Torres asked me to associate herself
with some of these remarks I am going to make and some of these
questions.
Thank you for your talking about trying to connect women to
technology and to cell phones. But I think you would all agree
that a cell phone is not a replacement for an IUD or birth
control pill, access to healthcare. It can help, I guess, get
you the money, right?
A couple points that I would like you to touch on here are
for women to be productive, they cannot just be reproductive,
correct? Yet, we have seen this administration expanding the
global gag rule, zeroing out funding for family planning,
cutting off funding for the U.N. Population Fund.
And, listen, I am not just talking about abortion, okay?
That is controversial. Let's just talk about someone being able
to plan their families. I would like you to touch on the impact
of women not having full access to healthcare and being able to
plan her own family, how that affects them economically.
And the second thing I would like you to touch on is, we
have heard some talk about a new World Bank fund. We are giving
$50 million to it. I would like you to relate that to your--a
woman's fund, yes. I would like you to relate, if you can, that
to your discussion.
Ambassador Verveer. Well, thank you, Congresswoman.
I couldn't say it better in terms of the critical nature of
how these investments in women are interrelated. Think of any
American woman. If she doesn't have access to family planning,
for example, if she voluntarily wants access to family planning
to be able to conduct her life, take care of her children, give
them the best that she can provide, and succeed in her work,
then she is constrained. She is severely constrained.
A poor woman's problem is that much greater. I have been in
so many settings where women--one woman I remember vividly,
five girls, five boys. She said to me, ``This is too many
children. I can't take care of them. I don't know what is going
to happen to them. We have nothing.''
It is so significantly entwined with their futures, with
their economic viability, with how they take care of their
families. You can't work if you are sick. You can't work if you
are so constrained. So that goes without saying, as far as I am
concerned.
In terms of the women's entrepreneurship initiative that
Ivanka Trump has been associated with and that is part of this
World Bank partnership, I think it is a good thing. It provides
loan guarantees which we have seen work significantly. Ms.
Iskenderian has talked about ameliorating risks, for example.
Banks will not make these loans to women, small businesses, or
medium-size businesses unless, frequently, there is a guarantee
that they won't lose everything on that loan.
And this is supposed to, with the Bank's work, involve
training as well as other aspects of financial support and
related supports. And there have been commitments from other
governments as well.
But the point is, that is a good initiative, but if in
isolation we cut everything else, then what has it achieved?
And I think that is what we have to keep in mind. We can't just
do one thing and expect magical results. We need to understand
the complete person in these cases, what she represents, what
she represents for her country, what is in our vital interests,
and make decisions accordingly.
Ms. Frankel. Thank you.
Ms. Ros-Lehtinen [presiding]. Thank you, Ms. Frankel. Thank
you.
We will now turn to Mr. McCaul of Texas, the chairman of
the Homeland Security Committee.
Mr. McCaul. Thank you, Madam Chair.
And thank you for being here today, all three.
I remember several years ago reading a book called ``Inside
the Kingdom: My Life in Saudi Arabia,'' written by Carmen Bin
Ladin. She is a European woman who married into quite a family
that everybody knows about today. But she talked about 1979
particularly and how life was in the kingdom before the
Ayatollah came into power in Iran and changed the entire region
and then how life was after that event in 1979. And we all know
it changed Iran, but it also fundamentally changed the Arabian
Peninsula and Saudi Arabia, really rolling back time as it
pertained to women.
And, of course, the dress came back with the burqas and
women were no longer able to drive in the kingdom and were not
able to go outside, only at certain times, couldn't go into
certain premises. Just highly restricted, very oppressive
society. And it is very sad to think the direction it was going
before 1979 and where it is today after 1979. I have had the
opportunity to visit, as many Members have, Saudi Arabia and I
have seen that oppression. It is very dark. I have seen that
firsthand.
I have seen that same oppression in Afghanistan, just a
little different color of burqa. It is more of a beautiful blue
color. Pakistan, as you mentioned. Yemen. And it is a change in
their laws, but more, I think, a change in their culture.
And I guess my question, and it is a very basic one, is how
do we change that? How do we change that fundamental culture so
we can lift that oppressiveness off of these women?
Ambassador.
Ambassador Verveer. Well, it is a very good question,
Congressman, and I think it is a critically important question.
Because we know that you need heat at the top. You have to
change laws. You have to respect human rights. But you need
heat at the bottom. And that comes from the people and their
mindsets. And the mindsets, whether it is the Wahhabists and
what they are perpetrating or whether it is customs saying this
is how it is, it puts women down and really in many ways
affects their human rights deeply.
But there are a number of examples today where these
norms--culture can change. But you have to work at it. And you
do need heat at the top and you need heat at the bottom.
And, for example, this issue of female genital mutilation,
FGM, it is a horrific custom that many go through, many women
go through, because it is about their future. If they don't,
their future is inhibited in significant ways.
But where there have been efforts, and they are documented,
and there are successes every day. For the community to come
together and understand what this does in terms of harming the
health of the woman, potentially meaning maternal death in
terms of childbirth, the consequences are huge.
It takes village fathers, it takes imams, it takes the men,
and the community coming together, and in place after place
norms have changed. The norm went from FGM to the health of the
woman. It takes time, but we have to work at it. And education
is a critical element in all of that.
Mr. McCaul. And I know the young Saudi crown prince who
will be the king one day has a more progressive point of view
with respect to this and with respect to the role of women in
his society, and hopefully that will provide a change as well.
Are there any other examples of a fundamental change in
some of these countries that has made a difference in the lives
of women? Perhaps the other two witnesses.
Ms. Iskenderian. Thank you very much for the question,
Congressman.
I would just refer to some work that we are doing in
Pakistan currently with a mobile company, mobile cell phone
company that is offering financial services. And we went in,
actually, as a group of Western women, feeling pretty
unambitious or we didn't think we would be able to really
achieve very much.
But the company was seeing real change in youth dynamics
and the generational dynamics, that, yes, it was difficult for
unmarried girls to have access to cell phones, fathers really
were not comfortable with their girls having cell phones, but
since so many of the husbands of slightly older women had grown
up with phones and they wanted their wives to have that access,
we saw a real change and a real opportunity for----
Ms. Ros-Lehtinen. Thank you so much.
Thank you, Mr. McCaul.
Mr. McCaul. Thank you. And sometimes I have to ban cell
phones from my teenage daughters every now and then.
Ms. Ros-Lehtinen. And now we are pleased to turn to
Congresswoman Tulsi Gabbard of Hawaii.
Ms. Gabbard. Thank you very much. Thank you for the
important work that you are doing and for being here to really
add to this important discussion today.
I would like to touch on a couple of things with regard to
the use of mobile money and M-PESA in Kenya, but how it is
shown to be less effective in other countries. I think recently
M-PESA was shut down in Albania, affecting nearly 250,000
users.
So if you can talk about what are some of the barriers that
still exist, and how you recommend public-private partnerships
to break through this. Why does it work in places like Kenya
and not in places like Albania?
Ms. Suri. Sure. Thank you for that question, Congresswoman.
So I will say a couple of things. One is that we are now
seeing results out of Bangladesh that find the same sort of
financial resilience effects we were finding, which is brand
new work out of Bangladesh. Similar results in Tanzania. And we
are replicating in Uganda. So in a few months I will be able to
tell you the results for Uganda.
You know, I think one key component of mobile money and why
it has worked in Kenya is actually the business model. They
knew when they did this pilot that was funded by the British
aid organization that people wanted to use this technology to
send money across distances, right? The people who invented
this thought it was for microloans: Oh, this will be a way for
people to pay off loans.
Turns out very few people have microloans in Kenya, and
they didn't want it for that. They wanted it to send money 200
kilometers because there was no way to do that. And so they
rebranded the product, number one.
And, number two, they realized, like, I can't just have my
cash in, cash out points be in the city. If I have them only in
the city, no one is ever going to use it. I need cash in, cash
out points everywhere.
So the private company invested in this network of agents
to cash in, cash out, that when they started was already four
or five times the size of the banking infrastructure. Today it
is 130 times. A cash-out agent is about half a kilometer, you
know, 5, 10 minute walk for almost every Kenyan, for the
average Kenyan.
So that business model of needing to be everywhere rather
than in the cities was really, really key to this being
successful. A lot of people who have copied it don't think
through the business model. They think through the technology
and say, oh, I can copy that technology, but they think, oh, I
am a banker, I am going to start in the capital city and see
how it goes before going anywhere. But if you do that, you are
going to restrict the entire purpose of the technology.
And so I think people haven't quite picked up on the
business model is one, and how crucial that business model is
to the success of what the technology is meant to do. And I
think the U.K. aid pilot allowed them to realize that what we
were thinking is wrong and we need to do something completely
different. So that is one aspect.
I think the other is kind of investing heavily in the
platform that develops this technology. So talking about the
risk investment is, I think, important here too.
So those are the two, I think, big success cases. And there
are countries that are not allowing it regulation-wise. You
know, they are worried it is sort of outside the formal banking
system and what does this imply. And so I think there have been
some agencies trying to take the Kenya example and regulators
from Kenya around to talk to people to try and get them to
understand what are the right sorts of regulations you need to
have in place to avoid money laundering and to avoid the risks
that you traditionally think of in the banking system.
Ms. Gabbard. And my next question was about collateral. I
think a couple of you have mentioned that as one of the
barriers for women, in particular, that has to be overcome with
regards to property rights and other things. So if you could
expand a little bit about how that barrier is being overcome.
Ms. Iskenderian. Again, thank you very much for the
question.
As I mentioned in my remarks, we are very excited about
this growing trend of movable collateral registries that we are
seeing. Fifteen countries in Africa alone are going to have
movable collateral registries coming online in the next 2 to 3
years.
In China, when they implemented a movable collateral
registry, they allowed accounts receivable, things that we take
for granted in our banking system, to be used as security
against a loan, we saw a massive increase in SME lending, two-
thirds of which was to women. So being able to have access to
other forms of security is really critical.
We are also seeing some exciting fintech solutions where we
are providing alternative credit scoring. The ability to track
behavior, track payments, track interactions, transactions,
digitally is allowing us to have algorithms that do track to
creditworthiness.
Ms. Suri. I will just add one bit. I think the other way to
fix some of this is to provide loans that are for assets.
Ms. Gabbard. Right.
Ms. Suri. So some of the work we did in Kenya, we gave
loans for a water tank. And some people like to have cash. And,
like, no, no, it is for the asset, and the asset is the
collateral. And that allows them to get a loan for an asset,
and then you can recollateralize that asset once it is paid
off.
Ms. Gabbard. That is great.
Ms. Suri. And so I think that is another way to do it, is
to say let's do mortgage-style lending. It is not a mortgage
because that is a big amount. But even for a $200 asset, let's
structure it where the asset is collateral.
Ms. Gabbard. Great.
Ms. Suri. And that allows you to then keep that collateral
once it is paid off and recollateralize.
Ms. Gabbard. Thank you so much.
Ms. Ros-Lehtinen. Thank you, Ms. Gabbard.
We turn to Congressman Scott Perry of Pennsylvania.
Mr. Perry. Thank you, Madam Chair.
Thank you, ladies, for being here.
I am fascinated to a certain extent, Dr. Suri, by your
story in Kenya. I have two daughters. And I haven't been to
Kenya. I have read, of course, and I can only imagine the
culture, right, and how if the woman, even though she might
have the money, if she has it physically, where the man might
take it and control it, et cetera.
So in the greater context, though, we are going to spend
about $35 billion on foreign aid this year, right, the United
States taxpayers are going to spend that. And I have this study
from the GAO regarding how the different agencies are doing,
how they spend their money, and the efficacy of the goals. It
is pretty sad.
For instance, DoD, of the high quality, generally met all
applicable criteria, zero. Zero. Now in that context, it is
DoD, right? I would contend that this should not be DoD's
mission, right? But, apparently, people contend it is, and we
have sent money to them and they get pretty poor results. But
even at the State Department, they are up to a whopping 4
percent. USAID does a little better at 26. Millennium Challenge
Corporation, believe it or not, 44 percent.
So I guess my question is--and one of you, I don't know if
it was Ms. Iskenderian or Dr. Suri, said if you measure it,
that is the key. Well, somebody is measuring it here, but I
don't know that we are making the changes that we need to based
on the measurements.
So for each of you, your top three policy recommendations
for us policymakers to make a difference so that so we change
this zero to something meaningful. And if it means DoD doesn't
spend any of this money and it is sent to the Millennium
Challenge Corporation, so be it.
But you are the alleged--you are here because of your
expertise, right? So we are looking for some answers from you
on how to do the job better than we are doing, which is
apparently abysmal, if you look at the GAO study. So anybody
care to venture?
Ambassador Verveer. Well, I will start.
I think, given this hearing, one of the critical things in
government that doesn't happen is to look at the gender
influence, if you will, integrating gender into these issues.
A lot of these issues aren't women's issues. Take farming,
agriculture productivity. We know that women farmers, for
example, often are the backbone of their economies, where there
are ag economies, and often comprise the majority of the small-
hold farmers. Yet, when we have ag policies, do we integrate
that consideration in terms of what women need as opposed to
male farmers? Those are often different needs for productivity.
If we did bring those issues to the table, into our
consideration, we would have dramatically different results.
And with food policy and food security issues, it is
critically important to do that. And we have seen from the
studies that have been done that where this is a major
consideration, you have outcomes that are different.
Mr. Perry. Okay. That is fair.
Ambassador Verveer. Another one is----
Mr. Perry. I want to be quick.
Ambassador Verveer [continuing]. Measuring and evaluation.
And it is data. We talk about data. It is the cat's meow. It is
something we should all be doing. But we are not willing to pay
for data collection. And I think that is a very big issue in a
lot of the grants that are made and in decisions.
Mr. Perry. Okay. What else you got?
Ambassador Verveer. Another one is looking at the evidence-
based case, what is working and what is not working, and quit
repeating the mistakes, and scale what is scalable.
Mr. Perry. So just in that point, we are going to need some
help from outside organizations because, for instance, I have
to tell you that when you go to cut some of the money going to
DoD for these programs, can you imagine the panoply of names
that we are all going to be called around here if we say one
cent less for X? That is where we need your help, to point out,
look, this is not effective, it is nothing personal, but let's
spend the money here. We will do the same mission, but somebody
else does a better job.
Yes, ma'am.
Ms. Suri. So I would say three things. R&D, we do not do
enough about learning what works, and testing and
experimenting. You know, the Poverty Action Lab that I am
affiliated with at MIT is doing this with policy. Let's go
experiment and see what works. Think of the title of this
hearing, microfinance. We thought this was the silver bullet
for women. Turns out, it doesn't do that at all.
Mr. Perry. Right.
Ms. Suri. We have now seven studies.
So I think really doing what R&D would do, which doesn't
exist in developing countries, not just measure, but evaluate,
test, experiment.
I think working with the private sector. The private sector
in developing countries is showing an ability to scale in a way
that others don't have. Mobile money is scaling across the
developing world faster than most things. And so seeding kind
of innovation in the private sector, I think, can get you lots
of gains.
Mr. Perry. I am sorry. My time has expired. I am happy to
talk to you afterward. Thank you.
Ms. Ros-Lehtinen. Thank you so much. Thank you.
Now we are pleased to turn to Robin Kelly of Illinois.
Ms. Kelly. Thank you, Madam Chair. And I want to thank the
chairman and ranking member for holding this hearing on
empowering women in the developing world.
This is a multifaceted issue that is particularly important
to me. That is why Congressman Chabot and I introduced H.R.
2408, the Protecting Girls' Access to Education in Vulnerable
Settings Act. Giving women and girls access to quality
education not only increases their economic potential, but it
is directly related to conflict prevention and reducing gender
gaps.
Already, one in five girls in developing countries who
enroll in primary schools never finish. And I am concerned this
Trump budget, unfortunately, will drive more women and girls
out of school as a result of very concerning cuts to foreign
aid.
USAID found that when 10 percent more girls go to school, a
country's GDP increases on average by 3 percent. Education
provides a multiplier effect. When women and girls are more
educated, they have greater decisionmaking power in their
households, are less likely to be recruited by extremists, and
have healthier and better educated children.
Before I ask my question, I will say, someone asked who
were the good guys and the bad guys. And as the past chief of
staff to the Illinois State treasurer and the current co-chair
on the Caucus of Black Women and Girls, I do feel that the
United States of America needs to look at itself too. It is not
just in developing countries that there is work to do. We have
a lot of work to do here.
But can you suggest the best leverage, how can the U.S.
best leverage foreign aid money into programs that help women
become more financially secure so that people do feel
comfortable with the money that we are spending and we are
giving to these countries and programs?
Ms. Iskenderian. I would reiterate my fellow panelists'
focus on data, on monitoring and evaluation, and let's stop
making the same bad investments and really start scaling the
ones that do work.
The other thing I would really add, though, is, again, that
focus on the private sector. One of the things the United
States does do very well domestically is on procurement and
requiring a diversity in procurement policies. We should be
doing that more with both our own private sector that is
working in developing countries and that are getting government
funding to do that, as well as encouraging the private sector
in those countries itself to diversify their procurement.
Having those women-owned businesses that we have been talking
about in the supply chains of those companies can make an
enormous difference and they have tremendous difficulty
accessing finance.
And then I am just a very big fan of OPIC. And it is a
program that gives back to the U.S. Treasury rather than only
taking. And there is no gender mandate that is explicitly in
the OPIC program. And I think there could be, again, a lot of
private sector and a great deal of leverage there.
Ms. Kelly. Anybody else?
Ms. Suri. Yes. Ms. Iskenderian said it well. I would
reiterate just evaluating and really truly understanding what
works is very critical. And investing in that knowledge base
will help everybody across the developing world. And so I think
investing in the knowledge base of what works and what doesn't
work, which is so underinvested in in developing countries, is
essential.
And Ms. Iskenderian mentioned OPIC. I will say thinking a
little more innovatively about how aid organizations can invest
and work with the private sector is key.
If you look at Norway, the government has a--it is hard to
say this--the government has a private equity fund, Norfund,
right, completely private equity, Silicon Valley style, does
investments with returns. And they are playing around with what
their role should be and how they should structure that role.
And I think it is interesting to see how that will evolve over
time and whether that is an interesting model. But I think
thinking of innovative models of how to structure our
interactions is important.
Ambassador Verveer. Well, just very quickly, we are all
singing from the same hymnal. But I think in terms of the
private sector, there is some really impactful, innovative work
going on using supply chains and value chains, and government
participating in some of these collaborations in ways that we
have talked about and haven't talked about, which I think is
critically important.
And then I would say incentives, incentives to change
behavior. You talked, Congresswoman, about education. What does
it take to keep that girl in school? How do you affect the
families that often want to push them into a child marriage,
say? So incentive policies that help us do what we are
intending to do.
Ms. Kelly. If I would say to you, can you think of a
program right now that you would tell us we should not repeat,
do you have programs in your mind? You don't have to tell me. I
just want to know.
[Nonverbal response.]
Ms. Kelly. Yes, you do. Okay.
I yield back.
Ms. Ros-Lehtinen. Thank you so much, Ms. Kelly.
And we turn to Mr. Donovan of New York.
Mr. Donovan. Thank you, Madam Chairwoman.
You have identified, outlined, and vividly described what
the issues are. I appreciate that for someone who is trying to
understand it.
I have one question. It is actually in two parts. And I
open it up to the panel.
A lot of the things that you have identified as the
problems are caused by countries in which we don't create their
laws and we don't support their culture and how they treat
women.
What influence could the United States use, since we can't
change their laws--and I think some of my colleagues hit on
this peripherally--what leverage could we use to encourage
countries to change those laws besides appropriations? Our
Appropriations Committee will do that.
But what kind of policies, what kind of things could we do
to influence some countries to change either their laws or
their cultures on how they treat women?
And the other thing, the other part of my question would
be, what laws could we propose? What could this committee do in
order to advance--I won't even say advance--get up to speed of
how the cultures treat the female populations of their
countries?
Part of my great interest in this is I have a 2-year-old
daughter. So women's interests have really--they have always
been an interest of mine. And I don't want to say, Madam
Chairman, because I am interested in women. But it has always
been a concern of mine, the equality of women's rights in our
country, but now that I am on Foreign Affairs and I am seeing
the disparity in how women are treated in other parts of our
world.
I would just like your expertise in how, again, our country
can influence or encourage or use our leverage to advance
women's rights elsewhere. And then what can this committee
actually do? And I just leave it in any order to the panel as a
whole.
Ambassador Verveer. Well, I will kick it off by saying one
thing that has always impressed me is not the lecture from the
West so much that makes the difference, but our ability to help
raise up the voices within the country who want this kind of
change--women who want family law reform who cannot only
succeed at doing it when they come together, but actually help
their sisters in other countries who are in the same kinds of
cultures and wondering how do we get there.
Mr. Donovan. As you said before, pressure from the bottom?
Ambassador Verveer. Well, bringing women together so that
the best practices in one place can be understood and applied
in ways that are appropriate to the other place, validating the
efforts and enabling others to benefit from those best
practices.
Ms. Suri. Thank you for that question. It is a hard
question.
I guess I would just say that it is not just laws, because
in a lot of these places you can set all the laws you want but
whether they are actually adhered to is a different matter.
And so I think, as Ambassador Verveer said, like thinking
how we actually get the perception of women changed on the
ground is kind of key, not just the laws. So as women start to
participate more and more, it seems that the attitudes start to
change.
So the example I gave was from India where a regulation
required women to be part of local government, very low-level
local government, and it didn't change expenditures, but it did
change people's perceptions that women were good
decisionmakers. The men were more likely to think that.
So I think kind of thinking through not just what laws, but
how do you actually change things on the ground, that when the
laws come in they actually will have impact, is probably
important as well.
Mr. Donovan. The Indian Government changed that law. We
can't control what laws the Indian Government passes. So I am
trying to figure out how could we influence.
Ambassador, I think your comments are pertinent to that.
What leverage could we use?
And then, again, if there is something that this committee
could put forth.
Ms. Iskenderian. I would very much echo Ambassador
Verveer's use of best practice. The best learning is peer
learning. And it is often very difficult for people to hear an
American voice suggesting something, and hearing another woman,
another company, another bank from a developing country talk
about their experience.
We have done some amazing work in Jordan in microinsurance
that has benefitted women's maternal health tremendously over
the last 3 years. The insurance company we work with just came
back from Egypt where they were spreading the gospel. Private
company. It wasn't a government program at all. Whereas in
Egypt, the government had requested this private company to
come and explain how they had gotten this product to work so
successfully. And that is going to be so much more powerful
than anything that we could say.
You know, I would also just say we have a very loud or
could have a very loud voice in international fora that I don't
think we always use. In the subject of financial inclusion at
the G20, we are not advocating for any of these issues as a
government. We are very focused on issues about antiterrorism
financing, money laundering, all of which is very, very
important. But we don't even add this as an issue that we are
standing with those other 19 countries and advocating for.
Mr. Donovan. There might have been an opportunity missed
there, yes. Thank you very much.
I yield whatever little time I don't have left back.
Ms. Ros-Lehtinen. Thank you very much, Mr. Donovan.
And we now go to Congressman Chris Smith of New Jersey,
chairman of the Subcommittee on Africa, Global Health, Global
Human Rights, and International Organizations.
Mr. Smith. Thank you very much, Madam Chair. And I do want
to thank Ed Royce and Eliot Engel for calling this important
hearing.
Ambassador, it is so great to see you again. And welcome to
our other very distinguished witnesses.
Just a couple of points because so much has already been
said. And I got here very late to ask my questions. But I would
like to comment on the shift. And maybe you might want to
comment on it as well.
I have written two laws on microcredit financing, targeting
the poorest of the poor, reauthorizing the funding. But that
has changed dramatically and radically, as you know better than
anyone else. Where we used to rely on donor support, obviously,
and you have all testified to this, USAID says that more than
half of the financing provided by microfinancing institutions
now comes from deposits, as you know so well, with much of the
remaining from private capital.
And, again, I think my good friend from Staten Island made
a very good point. What can we do to accelerate that or to keep
that trajectory so that more people are reached?
CARE points out that women still lag behind men in access
to financial services by 7 percent worldwide, 9 percent in
developing countries. So that disparity and gap must be closed,
I would note.
And your points about cell phones were excellent. You all
made very good points about that. When we were going and doing
our part to try to resource the Ebola crisis, one of the
biggest takeaways was how cell phones were the bridge between
best practices, including what do you do if somebody passes?
Don't touch the body. That was all being sent out via cell
phones. Radio was there. Cell phones were the dominant medium,
if you will, that were used there.
Financial inclusion, obviously that is extremely important
as a driver. You might want to speak to that.
And finally, today, in about 2 hours, the Frederick
Douglass Trafficking Victims Prevention and Protection
Reauthorization Act, a bill that I have introduced, joined by
my good friend and colleague Karen Bass, Ileana Ros-Lehtinen,
Chairman Royce, Ms. Frankel, and others, will be on the floor.
And we have new language in this. Besides reauthorizing the
TVPA of 2000, 2005, the International Megan's Law, and the
William Wilberforce Act, to the tune of $534 million over 4
years, it will do a number these best practices of training
procurement officers, so that they know what to look for in
trafficking.
And you might speak in a parallel way, because I think
poverty is still one of the major drivers behind trafficking,
how we might also get procurement officers and others, because
we buy an awful lot in this country, to be more aware of how
they could be helpful in this important and noble battle as
well.
Ambassador.
Ambassador Verveer. Well, thank you, Congressman Smith. It
is always good to see you. And thank you for your leadership on
so many issues we mutually care about, whether it is son
preference or human trafficking.
On the trafficking piece, I think the supply chain is a
really important issue, and it has been manifested in other
ways. But the work that is being done to understand where
slavery is injecting itself and what end products have utilized
and tapped that in terms of undermining people's human rights I
think is a very important piece.
And as you have so well stated, trafficking would not be
the multibillion-dollar criminal industry it is today if people
had economic viability. Traffickers prey on people who are
desperate to come out of the straits that they are in, and they
are coerced and conned, and we know what happens.
So I think this is a very important piece. You have been on
this issue a long time. This is another critical element as far
as I understand.
And, quickly, on the cell phones, we have talked a lot
about the financial transaction side of it. But your point
about Ebola is one point I don't want us to miss, which is the
critical information, health information, inventory information
on product lines, how to move them, information for women to
protect themselves from violence, a lot of that is happening
through the cell phone today. That is why it has become such a
critical tool, particularly for poor women.
Mr. Smith. Thank you.
Ms. Suri. I will just add on the cell phones. I think
Ambassador Verveer is absolutely right. There is lots of
evidence that people are able to manage also their health lives
better with cell phones. You can remind them to take medication
that has to be taken continuously, and they do, and they
respond to it.
In all sorts of ways cell phones are such a big part of
people's lives in the developing world that they really weren't
here at the same sort of level of development in any way.
And I think they are critical not just to that, but also we
did a bunch of work on the Ebola crisis when it was happening
in Sierra Leone and we wanted to track the economic effects it
was having and whether women were pulling away from health
services because they were worried about catching Ebola. And we
did all of that data collection by cell phones, because we had
been working in Sierra Leone for several years, we had people's
phone numbers. And we ended up being able to trace out,
literally every month we were running a quick survey of a few
thousand people in Sierra Leone to track what was happening and
how they were responding.
And so I think not just in terms of good for people, but in
terms of also being able to understand crisis situations, they
have been very useful.
Mr. Smith. Thank you so very much.
Ms. Ros-Lehtinen. Thank you so much.
And now we turn to Ambassador Wagner of Missouri.
Mrs. Wagner. Thank you, Madam Chairman, for hosting such an
excellent hearing.
As a woman on both the Financial Services and the Foreign
Affairs Committees, I am highly concerned about women's
economic empowerment. And I very much appreciate your
testimonies. Far too many of the world's women live in the cash
economy without access to financial markets and services.
Dr. Suri, I had a chance to read some of your work on
financial services innovations that improve financial
inclusion. I was particularly interested in your National
Bureau of Economic Research paper published last fall which
cited the importance of equipping commercial savings products
with features that guide clients toward better financial
planning, from text messages that remind people to save to
automatic withdrawal of savings from paychecks.
Tell me, how can the private sector, Dr. Suri, in
developing countries improve how the poor are saving?
Ms. Suri. Thank you for that question, Congresswoman. It is
a great question.
I think the private sector is starting to innovate a little
around financial tools, but they are worried about risk. The
financial systems are small, not that concrete, not that
stable. And so I think they are worried about risk. So they do
experiment a little, like with savings accounts, as you saw
from our work.
But I think encouraging them to provide a variety of
products. I think what we have learned from microfinance is one
hat doesn't fit all. I don't walk into the bank and there is
one savings product and one credit product. There has to be a
variety that meets different types of people's needs. And so I
think trying to encourage the private sector to innovate around
the types of products is one.
And then we have talked about this bit before, is kind of
helping them deal with that risk a little. If they are really
worried about risk, can we derisk some of the things they are
doing so that they are less worried and can invest and innovate
more?
And then, I think also doing the research piece around what
works and what doesn't work. You know, that piece is really
about, how do we think about what works in the financial tool
set for people in developing countries? And I think we need
that knowledge to be able to then go to the private sector and
say, look, this didn't work, don't do it, the same way we were
talking about earlier here. We can bring knowledge even to the
private sector to show them what is working and what is not
working.
Mrs. Wagner. Thank you. I appreciate that.
Ms. Iskenderian, I appreciate your leadership at Women's
World Banking. I had the opportunity to look at your
partnership to create Jordan's first health microinsurance
product to directly address hospitalization costs. I learned
that many existing health microinsurance products in Jordan
exclude pregnancy and prenatal care.
Do you find that this is the case in many parts of the
world? And how can policymakers encourage the launch of
microinsurance products that better support pregnancy care?
Ms. Iskenderian. Thank you, Ambassador.
That was not just a factor we see in Jordan, I am afraid,
but in many countries. Insurance companies don't want to insure
a risk that they know is going to actually happen. When a woman
gets pregnant, we know what the outcome of that is going to be.
So we, unfortunately, have found in many cases that that is an
exclusion.
Part of the reason why this product has been so successful
in Jordan, and we have now replicated it in six other
countries, is that we do not exclude maternal care. We found
that that is the one time in a woman's life that she will
prioritize her own health over her children's or her spouse's
or other family member's. And so it is both a good sales
technique in the way that you can convince a woman to take on
that insurance if she sees it meeting a need that she
expresses.
It was interesting, in Jordan, we even saw women who were
sort of outside child-bearing age find that that organization,
the organization offering the insurance, if they had identified
that need and recognized that as something that should be
insured----
Mrs. Wagner. So do you see those markets opening up at all,
Ms. Iskenderian, I mean, in terms of maternity and prenatal
care, and more across the world you are seeing it happen?
Ms. Iskenderian. We are. Microinsurance is just still a
drop in the bucket in terms of what is needed. Again,
technology is really very helpful because we are bringing the
cost of those very small policies down. But I think there is a
recognition and there has been quite a bit of research, women
do buy more insurance around the world than men. If you are
going to appeal to women you have to meet their needs, and
maternal healthcare is right at the top of that.
Mrs. Wagner. I think it is. And whatever we can do as a
country and a society to make sure that we are encouraging
policymakers to make that more readily available across the
world I think is very, very important.
I believe, Madam Chairman, that I have run out of time.
I have a wonderful question for you, Ambassador Verveer,
but I will have to submit it in writing.
So I yield back. Oh, Mr. Chairman. I am sorry.
Chairman Royce [presiding]. Thank you, Congresswoman.
Well, let me thank former Ambassador Wagner, but also thank
every member here of the panel for taking time out of your very
busy schedules to come here today to testify on this subject,
because I think this is going to be very helpful to the
committee as we continue our work to try to accelerate economic
growth in these societies and promote global health and
stability by focusing on this issue, by focusing on ensuring
that the women who serve as the backbone of stable societies
are not left behind and have the tools necessary to further
progress in this area.
So thank you all very much for your work in this area and
your testimony.
Ambassador Verveer. Thank you.
Chairman Royce. And we stand adjourned.
[Whereupon, at 12:04 p.m., the committee was adjourned.]
A P P E N D I X
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