Saudi women get into a taxi at a street in the Saudi capital Riyadh on September 28, 2017.
FAYEZ NURELDINE AFP/Getty Images

These legal barriers impose a significant economic cost.

By Rachel Vogelstein
September 28, 2017

Women in Saudi Arabia are rightfully celebrating the issuance of a royal decree lifting the female driving ban that has long symbolized their oppression in the kingdom. This hard-won breakthrough followed more than two decades of activism in the country, from the driving demonstration led by 40 courageous women in the 1990s, to more recent protests in the streets in 2011 and 2013.

This policy shift is animated less by a growing commitment to women’s rights and more by rank economic considerations: As oil prices go down, Saudi leaders have sought to implement a new economic program to shift from an oil-based economy into a modern one, and officials in Riyadh, Saudi Arabia have calculated that growing women’s participation in the labor force will fuel such a transformation.

This is an economic bet that is sure to pay off: In a country where women earn more than half of college and graduate degrees, but only comprise 20% of the workforce, Saudi Arabia has left the economic potential of nearly half of its population on the table.

Yet to improve women’s economic participation in Saudi Arabia, perhaps even more significant than the right to drive is ending the system of male guardianship that remains on the books. Under this legal regime, women are functionally equivalent to minors, unable to open a bank account, start certain businesses, apply for a passport, or travel abroad without the permission of a male relative—all rights that are fundamental to conducting business.

And while Saudi Arabia’s former ban on women drivers long rendered it a global outlier, other legal barriers to women’s economic participation in the kingdom are far more widespread than most recognize. According to the World Bank, women face gender-based job restrictions in 100 economies around the world, from spousal consent requirements for employment, to restrictions on property ownership, to the inability to sign a contract. In some countries (including France, Japan, Madagascar, Argentina, and Pakistan, among others), women are prohibited from performing traditionally “male” jobs or limited to certain hours, reducing their productivity and earnings; in others, women face discrimination in obtaining access to credit, thereby limiting their ability to start and grow businesses. These legal barriers exist in every region of the world, including in developed economies: Russia, for example, forbids women from employment in 456 specific occupations, from driving a subway to woodworking, and gender-based job restrictions remain in legal codes from France to Japan.

Thus, while Saudi Arabia’s driving ban has long captured the world’s attention as a marker of women’s subjugation, thousands of other laws limiting women’s ability to participate in the economy remain in place in nations around the world. As the Saudi government is beginning to recognize, these legal barriers impose a significant economic cost: Analyses from the International Monetary Fund and the Organization for Economic Cooperation and Development have long established a link between women’s labor force participation and economic growth. The private sector has documented this connection as well: One study from the McKinsey Global Institute concluded that closing gender gaps between women and men in the economy—including by eliminating legal barriers to women’s work—could add an estimated $12 trillion in global gross domestic product by 2025.

 

Some may argue that legal reform for women is inevitable, pointing to liberalization of laws in Saudi Arabia and elsewhere as signs of progress driven by economic realities that are impossible to ignore. But in light of the economic payoff at stake, the pace of change remains far too slow: After all, it took almost three decades of activism before the kingdom’s driving ban was removed, and legal restrictions in other countries have been on the books far longer than that. Others may caution that legal reform will go unheeded in countries where strong cultural norms undermine women’s ability to work in certain professions, or at all. However, even where implementation of gender equality laws remains an ongoing challenge, research shows a substantial link between stronger legal rights for women and economic development.

At a time when the global economy is struggling to emerge from an economic downturn that has roiled markets and capitals around the world, we can no longer afford to limit the economic potential of half the population—in Saudi Arabia, or anywhere else. All nations should recognize what the Saudis finally have: Women drive economic growth—and it is long past time for every nation to level the legal playing field and put them behind the wheel.

Rachel Vogelstein is the Douglas Dillon Senior Fellow at the Council on Foreign Relations.

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