People sit on a set of steps on Orchard Road in Singapore (Photographer: Sanjit Das/Bloomberg)

Asia Pacific Could Leave $4.5 Trillion on Table Amid Gender Gap

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(Bloomberg) -- It might be the most dynamic region in the world but the Asia Pacific isn’t meeting its economic potential, and some of that has to do with gender equality, according to the McKinsey Global Institute.

Targeted policies to achieve more women’s equality in Asia-Pacific economies could add $4.5 trillion to the region’s combined annual gross domestic product by 2025, or 12 percent better than if the status quo were maintained, MGI, the business and economics research arm of McKinsey & Co., said in a report Tuesday.

“Women can help -- and are helping -- to power this engine, making vital contributions to sustaining and enhancing Asia’s growth and lifting more people out of poverty,” the report’s authors wrote. “Yet gaps remain large in many countries in the region on gender equality both in work and in society.”

The researchers estimate that 58 percent of that potential growth would be from raising women’s labor-force participation rate, a quarter from putting more women to work in higher-productivity sectors and 17 percent from boosting women’s work hours.

MGI judged 18 economies in the region for gender equality in work and in society. On the work metrics, the Philippines was lauded for progress, followed by New Zealand and Singapore. India and Pakistan were judged furthest from gender parity in work.

While there are fewer than four women globally in leadership roles to every 10 men, the ratio is only one in four in the Asia-Pacific region, according to the report. On societal metrics, South and Southeast Asia offers a lot of potential for gender parity in digital and financial inclusion, while physical security and autonomy are considered greater worries.

MGI’s calculations focus on supply-side estimates that account for labor-force participation rates by gender and age cohorts, part-time versus full-time work among men and women and employment patterns for men and women across sectors. The authors note that the supply-side approach needs demand-side policies, including those that would help create jobs that attract female workers.

Women account for half of the combined Asia-Pacific population but contribute just 36 percent of the $26 trillion in GDP -- the same as the global share, the report showed.

And while the region as a whole has shown “significant progress” on gender equality over the past decade -- including on maternal health and adult literacy -- much improvement is needed on boosting women’s workforce participation, according to the report. That’s one of five metrics the group used to measure gender equality at work.

While Singapore has shown high marks on this count, boosting female participation to 58 percent in 2016 from 28 percent in 1970, even the city state’s relatively progressive policies haven’t prevented a wide gender gap in areas such as hours worked and productivity.

The MGI authors suggest that encouraging women’s participation in the so-called STEM fields -- science, technology, engineering and math -- and addressing skills shortages should help alleviate Singapore’s gender inequality.

©2018 Bloomberg L.P.

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