In Lebanon, like in many parts of the world, women-owned businesses face significant challenges. Public procurement—a major market segment representing up to 30% of GDP in some developing nations—has the potential to be a game changer for women if leveraged effectively. This blog explores how Lebanon’s recent efforts to implement Gender-Responsive Public Procurement (GRPP) can empower women and drive economic growth.
What is Gender-Responsive Public Procurement?
Gender-Responsive Public Procurement (GRPP) involves structuring government purchasing practices to promote gender equality. Since the state is the largest buyer in any economy, it has substantial power to influence markets. By integrating gender-sensitive policies into public procurement, governments can enhance competition, stimulate market growth, and support women’s entrepreneurship. The goal is to ensure that women have equal access to opportunities in the procurement process, helping to combat discrimination and foster economic empowerment.
Why is This Important?
Globally, public procurement is a massive economic force. It accounts for approximately 12% of GDP in OECD countries and up to 30% of GDP in many developing nations1. However, women-owned businesses receive a disproportionately small share of this market. For example, women-owned businesses receive less than 1% of large corporate and government procurement spending worldwide. In the European Union, women-led businesses secure only 5% of public procurement contracts, despite making up a significant portion of the small and medium enterprise sector.
Evidence shows that increasing women's participation in the workforce correlates with reduced poverty rates. Additionally, GRPP can drive business growth and offer new opportunities for women-led enterprises. If fully implemented, gender parity in procurement could add up to USD 28 trillion to the global GDP by 2025.
Lebanon’s Current Situation
Lebanon's economic landscape has been particularly tough on women. Female labor participation is low, standing at just 25% as of 2019. Women-owned businesses constitute only 9.9% of the country's firms, significantly below the regional average of 21% and the upper-middle-income country average of 37.1%2. The recent economic crisis has exacerbated these issues, with women experiencing higher rates of job loss and income reduction compared to men.
Public procurement presents an opportunity for women-led businesses, but the process is fraught with challenges. Women-owned businesses globally capture less than 1% of large procurement contracts, and Lebanon is no exception. Often, government contracts are awarded to large, politically connected firms, sidelining smaller and women-led businesses3.
The New Public Procurement Law (PPL) 244/2021: A Step Forward
Lebanon’s recent ratification of Public Procurement Law (PPL) no. 244/2021 marks a significant milestone for women’s economic empowerment. This law aims to reform public procurement practices by promoting fair competition and creating more opportunities for small and medium-sized enterprises (SMEs) and women-led businesses.
Key features of PPL 244/2021 include:
Support for SMEs: The law simplifies the process for SMEs to participate in procurement by breaking down large contracts into smaller units.
Incentives for Local and Women-Owned Businesses: It provides incentives for local production and women-led enterprises, including the possibility of setting aside a percentage of contracts specifically for these businesses.
Establishment of the Public Procurement Authority (PPA): This new regulatory body will oversee procurement policies, ensuring they are progressive and inclusive, and will manage the central electronic platform with open contracting principles with reliance to gender-disaggregated data to monitor participation of women-led businesses and inform policies.
Turning Policy into Practice
While PPL 244/2021 sets an ambitious framework, effective implementation will require several practical steps:
Define and Track Women-Led Businesses: Establish a clear definition of women-led businesses and create a registry to track them.
Facilitate Access to Information and Training: Provide training for women on procurement procedures and ensure transparent access to information.
Encourage Financial Support: Work with banks and financial institutions to offer credit and support to women-led businesses.
Monitor and Evaluate: Use gender-disaggregated data to track participation and address any barriers through policies and practices.
Building a Supportive Ecosystem
To ensure the success of PPL 244/2021, creating a supportive ecosystem is crucial:
Transparency and Data Access: Implement open contracting principles and use gender-disaggregated data to monitor procurement practices.
Engage Stakeholders: Foster partnerships with business associations and civil society organizations to support women-led businesses.
Align Policies: Ensure that GRPP aligns with other national policies and initiatives to reinforce its impact.
Conclusion
The ratification of Law 244/2021 is a significant step towards integrating women into Lebanon’s public procurement process. It lays a solid foundation for increasing women’s participation in the economy. However, to ensure its success, effective implementation and ongoing support are essential. By defining women-led businesses, facilitating access to information and finance, and fostering a transparent procurement environment, Lebanon can transform its public procurement system into a powerful tool for gender equality and economic growth.
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Editor: Carl Rihan