Remarks Prepared for Delivery by The Honorable Elaine L. Chao For Empowering Rural Women: A Personal Perspective

March 2, 2012

Thank you for that warm introduction.  Ambassador Kao, thank you for your kind invitation.  Congratulations to you and your staff for hosting such a successful conference on such an important topic.  Please also allow me to acknowledge Mr. Joe Wei, World Journal.  I’m so pleased to be here with my father today, Dr. James S. C. Chao.  Many of you know that I often accompany my father to many events and today I am glad that he is able to be here with me.

Today’s topic “Empowering Rural Women: Addressing the Challenges of Poverty, Hunger and Development” is one that I have addressed often throughout my career, as Director of the Peace Corps and as President and Chief Executive Officer of United Way of America, and of course, when I was Secretary of Labor.  I hope I may share with you some personal perspectives on this very important topic.

Since President Lyndon B. Johnson declared war on poverty in 1964, the U.S. has spent over $17 trillion fighting the war on poverty in our nation.  Yet we still have not “won” in terms of lifting all of our people out of poverty independent of government assistance and will not anytime soon.  About 15% of Americans are classified as impoverished and 46 million Americans are on government food stamps and we have 70 means-tested welfare programs.

Within the U.S. there is some dispute over what exactly constitutes “impoverished,” though the government has a per capital income figure that it adjusts periodically.  In the U.S., the poverty line for a family of four is presently set at $22,314 – a figure that does not factor in all the government assistance programs, such as food stamps.  80% of those defined as poor in the U.S. have air conditioning, 92% have a microwave, one-third have flat-screen TVs.  There is little evidence of systemic or mass poverty-induced malnutrition in the U.S.  Nutrition density, for instance, does not vary by income class.  There certainly are individual cases of severe hardship, especially in the ongoing high unemployment situation we are in.

Still, few in this country can have an inkling of the challenges faced by the poorest in developing nations.

Poverty is calculated differently in different countries.  For purposes of comparisons between nations, the World Bank sets the poverty line at $1.25 a day.  China recently raised its threshold for poverty to $1 a day.  India defines poverty for an urban dweller as $12 per month and $7.50 for a person living in a rural area.

Yet the American experience is relevant to the topic of poverty around the world.  Here, as elsewhere, there is a strong correlation between female-headed households and poverty.  17 million women in America are classified as poor while 12.6 million men are.  31% percent of female-headed households are living in poverty.  Half of all American children living in poverty are in female-headed households.  About 80 percent of long-term poverty in the U.S. occurs in single-parent homes.

It is also noteworthy that the poorest counties in the U.S. are the most rural.  About one third of children living in the rural southeastern U.S. are poor.  There is strong linkage in the U.S. between persistent poverty and degree of rurality.  This is evident in my home state of Kentucky, where the very rural, mountainous region in the eastern edge of the state known as Appalachia has struggled for generations to approach parity with the rest of our nation.  Part of President Johnson’s War on Poverty included establishing the Appalachian Regional Commission – a collaborative effort of the federal government and 13 states to address persistent poverty in this region, one of the most rural regions of our nation.  Tremendous efforts have and are being made there yet still the poverty rate is three times higher than the rest of the nation.

The story is familiar:  lack of economic opportunity for local residents in finding jobs or building a business.  And whether seeking to stay put in hometowns or move away to more prosperous areas, economic prospects for individuals very much hinge on their level of education and job skills.

Poverty is concentrated in rural areas throughout the world.  75 percent of the poor in developing countries live in rural areas, though only 58 percent of the population is rural.  The developing world is expected to become even more urbanized in the future but the poverty problem will remain concentrated in rural areas.  The rural poverty rate overall has declined in the past decade but that is largely attributable to dramatic gains in China.  The rural poverty rates in the developing world remain high and the absolute number of impoverished people is rising.

The heartbreaking incident of extreme poverty in the developing world is of great concern to many Americans in and outside of government, as it has been for generations.  At the same time the U.S. government was declaring war on poverty in the U.S. in the 1960s, it initiated the Peace Corps and other initiatives to help impoverished peoples in other countries.

The American people contribute significant public and private resources to efforts to alleviate poverty in other countries.  This outpouring of concern is expressed through charitable international organizations as well as government aid.  But even after decades and enormous amounts of foreign aid year after year, the global war on poverty remains a daunting challenge and there is still much to learn about what works and does not work.  And the degree to which strategies should vary in different countries and even different communities within the same countries.

For instance, to better help women farmers in developing countries to succeed, which is essential to reducing poverty in rural areas, U.S. aid officials recently announced that they were devising new methods to gauge the level of empowerment of women in agriculture.

Women comprise nearly half the agricultural workforce in sub-Saharan Africa and East and Southeast Asia, yet women’s farm production has not kept pace with male counterparts.  That phenomenon is attributed in significant degree to the fact that women tend to own less land, have fewer rights to the land, have less access to credit and training and have less input in decision-making.

Working with Oxford University and the International Food Policy Research Institute, USAID is finding that there is some variance among nations in regard to the challenges women face in agriculture: control over production, resources, and income; leadership in the community; and use of time.  In Bangladesh, they found that a significant factor impeding women in farming was a lack of authority over land and livestock.  In Uganda, it was time burdens that proved the biggest impediment for women and in Guatemala it was the lack of community leadership.

This research reminds us that while there are demographic factors commonly associated with poverty rates for women in all nations, there are also going to be localized phenomena related to laws and customs that will have bearing on the success or failure of efforts to help individual women and villages.

There are many exciting efforts underway that will transform the prospects of many impoverished women and, hopefully, the societies they live in.  One such effort, supported by the Gates Foundation and the Rockefeller Foundation called the Alliance for a Green Revolution in Africa, is seeking to dramatically improve agricultural production in Africa by providing resources to smallholder farmers – the majority of whom are women.  Through access to better seeds and soil, markets, financing, information, storage and transport it is believed that Africa can develop an efficient and sustainable agricultural system that would feed its people and boost the economic prospects of smallholder farmers.  By 2020, their goal is to have doubled the income for 20 million shareholder families.

Among their strategies for aiding these shareholder farmers is the use of micro-financing.  In Tanzania, only 6 percent of the population has access to loans.  Business people and farmers in any nation – rich or poor – will attest to the difficulty in surviving, let alone thriving, without access to credit and other financial services.  The agricultural sector in Tanzania – upon which women are so dependent for survival – has accounted for only 1 percent of loans there, despite employing 80 percent of the workers.

Microfinancing or microlending is, as the terms suggest, the practice of lending small amounts – a hundred dollars, perhaps, or a bit more or less – on a wide scale has been one of the most promising developments in alleviating poverty in recent decades.  The phenomenon is most often attributed to the advent of the Grameen Bank in Bangladesh in 1976 and its practice of offering small loans to impoverished people in rural areas, with particular focus on lending to women.  The program yielded some notable successes in enabling poor women to start small businesses.  The idea spread and expanded to include other financial services such as savings accounts and insurance.  Non-profit and for-profit microfinancing institutions proliferated and the United Nations declared 2005 the ”Year of Micro-credit.”

The microfinancing movement has not been without problems and detractors.  It expanded rapidly and lending practices vary, sometimes with tragic result for women who have become mired in debt and been hounded by debt collectors.  And while there are individual success stories, measurements of effectiveness in having a broad impact on reducing poverty are difficult and inconclusive.

Perhaps expectations for microfinancing were too high.  Even in developed countries, most of the labor force earns a living as employees.  And even where educational levels, infrastructure and other institutional support for small enterprises is considerable, starting and sustaining a business is difficult and the failure rate is high.  But we still place a high value on the worth of attempting a successful business.

Microfinancing is not going to be a panacea for ending poverty, but nothing is.  Microfinancing can be and is in some places an important means of fostering economic opportunity.  Studies of the effects of microfinance have served to highlight the essential truth that there is no magic solution to poverty and certainly not in rural areas where there can be so many obstacles.

For farmers and small businesses to succeed, they must have not just capital but skills.  Entrepreneurial skills.  There must be a market for products and they must be accessible.  They must be able to get their products to market and that requires forms of transport and roads.

For whole nations and regions within nations to improve the standard of living there must be macroeconomic policies in place which foster growth.  That, of course, must include international trade.

There are unique challenges in making a living in agriculture everywhere in the world and they are particularly concerning in trying to help poor women in rural areas of developing nations.

Broadly speaking, we know that education is key to success in all countries, rich and poor.  Illiteracy remains a huge impediment to reducing poverty rates, especially for women.  Nearly a billion adults in the world are estimated to be illiterate.  Two-thirds of them are women.

Without the ability to read and write and do basic arithmetic, these women are going to be forever trapped in very low-skilled jobs, if they can even find one.  And it would be very difficult to grow a business or operate a farm hampered by illiteracy.

Twenty years ago, I was Director of the U.S. Peace Corps and witnessed many efforts big and small to help impoverished people around the world.  One of the accounts that has stayed with me is of a Peace Corps volunteer’s experience involving their attempts to help women build their small businesses.  This volunteer had a master’s degree in business administration and was eager to apply her sophisticated MBA knowledge in helping women she met in the Togolese Republic increase their fruit and fabric sales in the local marketplace.

These rural women advised this Peace Corps volunteer that what they most needed in order to expand their businesses was to learn how to read and write numbers.  And so she taught them basic mathematics.

In the U.S., the correlation between education and prosperity has been brutally evident in this recession.  The unemployment rate overall is more than 8%.  For Americans with at least a bachelors degree it is about half that high – at 4.2%.  The unemployment rate is twice as high for those with only a high school degree.  The unemployment rate more than triples – to 13.1% – for high school dropouts.  Illiteracy is a tremendous hurdle to overcome in any country – 70% of Americans with the lowest literacy skills are unemployed.

Literacy is also associated with early marriage and high fertility rates, which are closely linked to poverty.  One thing women around the world have in common is that they bear the brunt of the burden of raising children.  The responsibility of having children consumes resources that the poorest women have little of to begin with and child-rearing expends enormous energy and time which makes it even harder to work – on farms or in jobs.  In the U.S., a child born to an unmarried teen mother has a 27 percent chance of growing up in poverty.  This remains a serious problem in this country and we have far more resources to help women in terms of child care and other services than do women in impoverished countries.

The war on poverty, in the U.S. and abroad, has proven more difficult and protracted than imagined or certainly hoped in the 1960s.  But gains have been made, lessons have and are being learned and new approaches are being explored.  What is clear is that our efforts must be sustained, they must be comprehensive and they begin with us, as individuals, helping in any way that we can—through donations, individual acts of volunteerism, and government service —to support organizations that are addressing the many facets of poverty.

We have a wonderful program scheduled for today – I know the speakers who follow will give insight and valuable information on lifting the plight of women in rural communities – empowering them to build better lives for themselves and their families.

Thank you for being here today and for your interest in learning more about and hopefully participating in the global efforts to help those less fortunate from a lifetime of poverty.
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