Keywords

3.1 Introduction

Women play an increasingly important role in the global economy, yet they lag behind their male counterparts when it comes to labor force participation, and this is a missed opportunity for countries such as Cambodia and Vietnam that are still climbing the ladder of development. Many women entrepreneurs still face limitations in equal access to economic opportunities and institutional support. When their products, be it goods or services, are no longer aligned with domestic market demand or when their domestic market shares decrease due to intense competition from market saturation, they are often forced to seek out regional and international markets to thrive economically. However, women-owned businesses in trade sectors in Cambodia and Vietnam are mainly Micro, Small & Medium Enterprises (MSMEs), while the larger exporting companies are dominated by males and foreigners. In other words, women-led businesses are much smaller in scale, do not produce enough or have the required capacity to compete in, nor penetrate, international markets. Women-led businesses are also clustered around specific industries (for example, retail, textiles, and handicrafts), and are frequently linked with ‘necessity-driven’ firms rather than stable or growth-oriented enterprises.

In both countries, lower value-added manufacturing sectors such as garment and footwear account for the majority of women's labor force participation. In higher value-added manufacturing, such as machinery, electrical parts, and automotive manufacturing, women’s participation rate is insignificant compared to men. So, there is a trend of female employees crowding into the low-paying, low-skill, and low value-added sectors versus the high value-added sectors where male workers dominate. Similar disparities can be seen in the size of SMEs and sector in which they specialize. There are significant disparities in the size and number of female-led enterprises in both the SME and corporate sectors. Female-led firms, when they export, tend to be concentrated in the apparel, handicraft, and fast-moving consumer goods (FMCG) retail sectors. However, as we saw in Chapter 2, despite facing various challenges, women-led businesses create a virtuous spiral as they often hire more women in their businesses.

The current chapter aims to take a deeper dive into the key findings from the survey results of Chapter 2 by conducting a qualitative analysis of the relationship between trade and women's economic empowerment in the case of Cambodia and Vietnam. Its goal is to understand why specific trade sectors and strategies are more conducive to women’s economic empowerment and why others are not. To achieve this objective, the research focused on the following three broad research questions, which were also considered when collecting survey data on SMEs (see Chapters 1 and 2): (1) Why—and under what circumstances—do some trade sectors create more jobs for women than others? (2) To what extent are the jobs created contributing to women’s economic empowerment? (3) What strategies and policies are needed to ensure these sectors work optimally?

The rest of the chapter is organized as follows. The next section briefly presents the research design, while Sect. 3.3 presents more contextual information about the cases of Cambodia and Vietnam, building on what was presented in the previous chapter. Section 3.4 presents the results of the qualitative analysis that was undertaken. Section 3.5 concludes with key recommendations.

3.2 Research Design

Tailored questionnaires for focus group discussions (FGDs), key informant interviews (KIIs), and in-depth interviews (IDIs) were developed to cater to three different segments of the sample pool under investigation: women business leaders, women factory workers, and representatives from trade-supporting agencies.

The research team adopted an iterative approach throughout the implementation of the primary research, whereby refinements were made to the methodology based on additional information or developments that came to light during fieldwork. Based on the preliminary findings of the quantitative survey, the multistakeholder workshops from Cambodia and Vietnam provided feedback on the qualitative research methodology in order to fill the survey data gaps. Moreover, the research team made further adjustments to the research tools after conducting pilot testing with a few respondents. This ensured that the data collection tools were fully appropriate for capturing the information that the research was seeking.

The research team traveled to Cambodia and Vietnam and visited the factories and offices of the respondents to obtain in-depth insights on trade and women’s economic empowerment. The team reached out to trade promotion agencies, women's entrepreneurship associations, and trade unions to assist in recruiting participants for FGDs, KIIs, and IDIs. The qualitative research plan ensured the representation of participants from exporting women-led/women-owned SMEs from different trade sectors.

For the FGDs, there were a total of 41 participants that were male and female employees from different types of export-oriented factories and companies to understand the employment situation of women working in the export-oriented trade sectors. For KIIs, a total of 4 informants from women's entrepreneurship associations and trade support agencies were interviewed. KIIs explored the overall situation of women in trade sectors as well as validate findings from existing literature. Regarding the one-on-one IDIs with women entrepreneurs, a total of 25 IDIs were conducted to understand the perspectives of women as employers in exporting sectors, and to get insights into their overall entrepreneurship experience (Fig. 3.1). The research team carefully analyzed all of the information and data collected from both primary and secondary sources. For any unclear or contradictory information, the team continuously sought clarifications from interviewees to ensure the credibility and validity of the information presented. The research team also sought constant feedback from TFO Canada and IDRC offices.

Fig. 3.1
An illustration has 4 elements. 1. Relevant literature reviews including trade portals. 2. Focus group discussions including 8 F G Ds with 41 male and female factory workers. 3. Key informant interviews with trade support organizations. 4. In-depth one-one interviews with women business owners in trade.

Research approach

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3.3 Context

The Southeast Asian region is an economic powerhouse characterized by rapid economic growth and enhanced trade linkages, particularly through cross-border value chains (World Bank, 2020). The role of women has been recognized due to their prominence in the textile and garment industry as informal traders and retailers (Asian Development Bank 2013, 2015; World Bank, 2017) and reflected in recent free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP). The female labor participation rate in both Cambodia and Vietnam is high but still lags behind that of male participation. This gender gap in the workforce may be affected by the propensity of women to remain in the informal sector and part-time work because of their caring responsibilities and traditional gender role stereotypes.

The rise of trade as a component of overall economic activity is typically accompanied by a rise in wages and salaries. Workers employed in the formal sector benefit from salary adjustments to a greater extent than informal sector workers. Participation rates in the formal sector remain low for both Cambodia and Vietnam at less than 50 percent (for both men and women) even if they are higher than the regional average. In general, wages accrue faster to those working in the tradeable sector, the most dynamic of which is manufacturing, providing a slight advantage to Vietnam in terms of closing the salary gap over time. The technical skills of women in Cambodia may constrain their ability to participate in highly tradeable sectors in high management positions because the number of women with higher education in Cambodia lags well behind that of Vietnam (Global Innovation Index, 2022). Agriculture, which employs one-third of the workforce in both countries, experiences relatively slower wage growth.

3.3.1 Cambodia

Cambodia's GDP grew at an average annual pace of 7.7 percent between 1998 and 2019, making it one of the world's fastest-growing economies. However, in 2020, the COVID-19 situation had a detrimental impact on three major areas of Cambodia's economy: tourism, manufactured exports, and construction, which together accounted for more than 70 percent of the country's GDP and produced 39 percent of the total paid employment in 2019. The GDP growth rate contracted to 3.1 percent in 2020, its worst performance since 1994. Cambodia underwent a substantial economic transformation in the two decades before the COVID-19 pandemic, achieving a lower middle-income level in 2015, and it aspires to reach upper middle-income status by 2030.

3.3.1.1 Export Performance

Cambodia’s openness to trade has expanded at a steady rate. After joining the WTO in 2004, Cambodia used its preferential arrangements in textiles to carve out an export niche in the production of low-end garments and textiles. This sector became the basis of Cambodia’s export linkages and created a nascent manufacturing sector. Similar preferential trade agreements with the EU allowed Cambodia to expand its agricultural exports. Although Cambodia’s economic linkages into the Southeast Asian region have traditionally been filtered through the political relationships with neighboring Thailand and Vietnam, a ‘balance of trade’ incentive and strategic investments from bilateral donors fostered the growth of trade to the major markets of the US and EU, which have gradually become Cambodia’s major export destinations. The evolution of sophisticated cross-border value chains has allowed Cambodia to rapidly diversify into new exports and create more stable linkages within the Mekong region, while also providing incentives and opportunities for increased trade with the US and EU. Despite the increased sophistication and diversity of Cambodia’s export mix, the garment, textile, and footwear industries still play a major role, that typically favors female employment, meaning that in Cambodia’s case there is a distinct gender component to manufacturing exports.

Cambodia’s trade balance has remained slightly negative for the past few years. Exports are primarily driven by the garment sector owing to lower labor costs. The government recently made progress on G2G new trade deals to boost agricultural exports. For example, major agri-food products like cassava and mangoes are gaining export momentum. In 2019, Cambodia ranked as the 10th rice exporter in the world. Moreover, the Cambodia-China FTA (CCFTA) is expected to enable duty-free access to the Chinese market for Cambodia’s agricultural products. Cambodia has an FTA with Korea, is a member of the RCEP, and is in talks with India, New Zealand, Russia, and other countries.

3.3.1.2 Labor Force Participation

According to the Cambodia Socio-Economic Survey (2019–20), the female labor force participation rate in Cambodia was 84 percent in 2019, higher than its neighboring countries. However, women remain overrepresented in low-paid and low-skilled jobs in informal sectors. Around 90 percent of the workforce in the garment sector is female. Managerial positions are dominated by men, whereas there are more women as service and sales workers. The agricultural sector, the government’s current priority sector for export, employs about 40% of the country’s total labor force whereas women’s share was 45.7% in 2015 (National Institute of Statistics, 2019–2020). General challenges women often face in the labor market include the domestic work and care burden; limited access to economic resources, including credit and financial services; inadequate education and training programs; lack of government services; disadvantages in social protection coverage; and pervasive discrimination in most aspects of employment and work (Asian Development Bank, 2013).

3.3.1.3 Small and Medium Enterprises (SMEs)

Women manage the majority of enterprises, at 65% of total establishments, with majority being micro—the majority of which are unregistered/informal. Women lead or own very few small or medium-sized establishments. More than half (54%) of the people engaged in MSMEs are female (Cambodia Trade Integration Strategy, 2019–2023). SMEs face several challenges, including access to markets, low productivity, a lack of qualified and skilled labor, lack of innovation, and a complicated and relatively costly registration procedure (International Finance Corporation, 2019).

3.3.2 Vietnam

Vietnam’s GDP per capita has increased more than three times in the last two decades and the country transitioned from one of the poorest to a middle-income economy in less than a generation. The economy has grown at an average of 6.3 percent annually since 2000, rapidly shifting from a low-income country to a lower middle-income country, as per the World Bank’s classification. Absolute poverty rates have declined significantly, and infrastructure services have become much more accessible. However, a number of domestic and external challenges remain present, such as the lack of growth in key export markets and continued disruption of global supply chains, prolonged labor shortages, the threat of rising inflation, and growing financial sector vulnerabilities.

3.3.2.1 Export Performance

Vietnam’s ranking of 39 out of more than 160 countries on the World Bank’s trade facilitation index puts it well ahead of the regional average and neighboring economies. The country went through a process of trade liberalization in the 1980s and 1990s as part of its reform policies or Doi Moi. The country now has a vigorous export sector and has exhibited export success across a diverse range of products, including light manufacturing, agriculture, fisheries and services. Vietnam’s major export partners are the US, China, Japan, South Korea and Hong Kong-China, with exports of small electrical goods manufacturing and textiles featuring strongly in the overall export mix.

Vietnam’s trade balance has remained positive for the past few years, and it has used its participation in free trade agreements, beyond ASEAN, as an instrument to ensure increased economic power and financial security. Recent examples include the EVFTA (European Union–Vietnam Free Trade Agreement), CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) and the UKVFTA (UK-Vietnam free trade agreement).

Vietnam’s manufacturing sector accounted for 25 percent of the country’s total GDP in 2021 (Vietnam Briefing News, 2022). As Vietnam transforms into a global manufacturing hub, it has emerged as an effective relocation destination due to the trend towards offshoring from China and nearshoring closer to Korean value chains (also known as the China+1 strategy). Vietnam is well integrated into regional value chains. Goods that are assembled in other parts of the Mekong region can be easily transported into special economic zones and dry ports situated along the Vietnamese border, as well as port and shipping facilities along the Vietnamese coast. Vietnam’s investment in market access infrastructure, including port facilities and roads, give it a strong position in regional supply chains.

3.3.2.2 Labor Force Participation

The Labor Force Participation rate in Vietnam is higher than in all the members of ASEAN. Vietnam has one of the highest female labor-force participation rates in the world, even if it is still lower compared to men. Moreover, the country’s economic development is mainly driven by labor-intensive industries with low wages. The high adult literacy rate contributes to the high labor force participation rate in Vietnam. Women mostly work in low-paying jobs in export-dependent factories, and they account for 80 percent labor in the textile and garment industry. According to Vietnam Labor Force Survey 2019 by the General Statistics Office (GSO), the gender pay gap stands at 13.7% favoring men.

3.3.2.3 Small and Medium-Sized Enterprises (SMEs)

SMEs are vital to Vietnam’s economic growth, and within the SME sector (excluding micro-size enterprises), women own 24 percent of the total active enterprises, making up a significant part of the overall SME contribution to the national economy. Women face challenges in accessing credit loans, tax filing, technical skills, market expansion, access to legal advice, human resource development, and transforming family businesses into enterprises (UNESCAP, 2019).

3.3.3 Comparative Analysis

Due to their geographical proximity, Cambodia and Vietnam share similar cultural norms and traditional gender practices. Hence, the gender-specific barriers and economic contributions of women’s employment in trade sectors are found to be similar in the two countries. For example, traditional gender-role stereotypes still play a significant role in the job distribution between men and women in the workplace, market, government structure, and societies. As a result, the constraints that women face in accessing economic resources are similar as well.

In both countries, informality can provide an upper limit on growth. Informality is a function of size: micro-SMEs are typically family-run ventures, sometimes operating from a storefront at the family home. These enterprises lack formal registration, even at the village or commune level. Their size and informality place constraints on the ability of these businesses to access the SME capital market, formulate business plans, or link onto the value chains that have become the foundation of trade and growth across Southeast Asia. In both countries, the explicit inclusion of provisions for women-led exporting firms still remains a necessary gap to address, and there is still a disconnect between women entrepreneurs and policymakers when it comes to information sharing. The majority of women-led enterprises are still not aware of the existing policies or trade opportunities they could tap into in both countries. Similarly, many female workers and employees lack the necessary information regarding their labor rights and protection mechanisms.

The key differences between the two countries are around the extent to which government policies are put in place to support women as both employees and employers, with Vietnam performing slightly better. For example, some of the gender-smart policies of Vietnam include the integration of gender into Free Trade Agreements, plans for gender equality in school curricula, and government’s tax and loan incentives for women employment and women-owned SMEs. It should be noted, however, that these policies have not yet been fully implemented in practice. On the other hand, Cambodia is focusing on promoting basic rights of women and educating the public on gender issues, as well as the introduction and enforcement of anti-discrimination legislation to remove cultural, social, and institutional barriers.

Vietnam’s economic growth strategy is driven by a more balanced and diversified portfolio of exports with a slightly higher level of women’s employment in other traditionally male-dominated sectors such as IT and digital-oriented industries, as well as professional services sectors that require a higher level of skills and education. The increasing demand for labour in STEM sectors also mean that the number of women receiving STEM-related education and training, and working in the relevant industries has been increasing. Similarly, Cambodia has also recently initiated its strategic plan to diversify its light manufacturing towards higher-value products, such as electrical appliances. For this reason, progress has been made in providing technical and vocational training courses in order to address the shortage of skilled labor, however with little participation of women in the training. Overall, both countries still have a lower number of women employees compared to men employees in high value-added export-oriented industries.

There are also marked differences between the educational opportunities available to women in Cambodia and Vietnam that have important ramifications for job outcomes. In Vietnam, where the economy is more advanced and institutions are better established, women are better represented in management positions. In Cambodia, on the other hand, women feature strongly as the owners of micro and small-level businesses while they are largely absent from ownership and management positions at the median and corporate level.

3.4 Key Findings from Qualitative Analysis

The qualitative analysis was conducted within the scope of the three key research questions: (1) Why—and under what circumstances—do some trade sectors create more jobs for women and others do not? (2) To what extent are the jobs created contributing to women’s economic empowerment? (3) What strategies and policies are needed to ensure these sectors work optimally?

3.4.1 Modalities and Conditions for Trade Sectors to Create Jobs for Women

3.4.1.1 Cambodia

Cambodia's export-driven development strategy has centered primarily on garment and footwear manufacturing, which account for roughly 70 percent of the country's exports. A cheap and abundant labor force of young women make up 90 percent of employees and give Cambodia’s manufacturing sector a competitive advantage (Asian Development Bank, 2013). Moreover, our review of the literature also shows that the overall integration of gender perspectives into Cambodia's economic development strategies has made some progress. On the other hand, according to the survey data collected for this project and other data sources, only a small proportion of women-owned enterprises engage in export activities and are highly concentrated in certain specific sectors. To this end, the qualitative research explored the challenges and limitations that both female employers and employees face in trade, especially in export-oriented sectors.

  • Traditional Gender Role Distributions and Stereotypes

Given that the majority of female employment within the export-oriented sectors come from textiles and apparel industries in Cambodia, we examined where and why exactly women are involved in the value chains. Women are typically employed in various production stages of clothing and footwear manufacturing, namely pattern making, embroidery and screen printing, thread cutting, sewing and tailoring, spot cleaning, buttoning, and packing. Both employers and employees commonly believe that women are better at performing such activities. At the same time, men are less likely to engage in occupations that require such activities, because they can earn more from other jobs, and some even dislike these tasks. This may be linked to how traditional gender roles are distributed between men and women in society. Therefore, as can be seen in the following quotes from our FGDs, traditional gender norms contribute to women employees being significantly overcrowded in the textile and apparel industries:

Most factories hire women, and it's rare to see men working in garment factories. In our factory, men work at the knitting tables. They cut the hard fabric to the right length and size, and then send it to the tailoring tables where women work. (A female garment worker)

No, I don't want to do the sewing job that the women at our clothing factory do. It's boring and needs to be paid close attention to. No other man wants to work in the sewing and tailoring section. (A male garment/textile worker)

Societal expectations also often influence the experiences of women entrepreneurs. Married women interviewed often reported having only one chance with family support whereas men are naturally expected to persist until they succeed or decide to give up on their own. The internalization of women as a caregiver or housewife is still deeply rooted and ingrained in the society. This places increased pressure on women to succeed in their business and in turn, they are less aggressive than their male counterparts when it comes to taking business or financial risks to scale up or enter unfamiliar industries.

Some women entrepreneurs, find handicrafts or weaving products an easy business for export, whereas male entrepreneurs would seek larger investments for furniture or automotive parts trade. (A key informant)

  • Gender Bias and Preferential Criteria Set by Employers

Motherhood-related discrimination against female workers is prevalent across the trade sectors. Both employers and employees interviewed agree that it is a normal practice for employers to prefer unmarried job applicants or those with more than two or three children to avoid maternal-related leave absence. This is because Cambodia labor law permits three to six months of maternity leave, which creates a challenge for SMEs with limited resources as they must find a replacement to fill the vacancy temporarily. As a result, some businesses prefer male employees for jobs that are deemed appropriate for both genders, unless a job is considered a traditional role for women.

It is sometimes financially unaffordable for SMEs to train and invest in temporary employees, that’s why we have to apply the gender-based discriminatory criteria during the recruitment process. (Women business owner)

However, there were also many businesses that prefer women employees for a variety of reasons, due to “trustworthiness, accountability, a greater sense of ownership in the business, and the sensibility of women at work” as opined by the women employers interviewed. This shows that there is a prevalence of gender-specific discrimination or preferential treatment, prejudices, and attitudes among employers, each of whom has their own unique reasons and justifications for doing so.

  • Lower Access to Digital and Technological Skill Training Amongst Women

Another explanation as to why most female employees are concentrated in the garment and footwear manufacturing is the lower requirements of skills and education for the job. Women employees reported they lack the necessary skills for higher-paying sectors that are dominated by men, such as digital and STEM-related export industries, despite the country’s attempt to compete in the 4th industrial revolution and digital economy. This is partly explained by the gender disparity in the attainment of digital and technological-related higher education and vocational training schools. According to the NIS economic survey, men receive more technical and vocational skills training than women in Cambodia. Moreover, men account for 84% of enrollment in computer science and STEM-related higher education (Cambodia Development Resource Institute, 2021).

Furthermore, the vocational schools and apprenticeship programs are not explicitly designed for women who must also do household tasks and childcare outside of their working hours. Furthermore, Women Development Centers (WDCs) with vocational training facilities, run by the Ministry of Women's Affairs’ Provincial Departments, primarily offer traditional training programs such as weaving, handicraft production, hairdressing, tailoring, and food processing.

The majority of the workforce in electrical and industrial parts factories are men. It is a highly skilled job with significantly higher compensation than workers in garment/textile factories, but sadly, only men have the expertise. Women should also engage in technical vocational training. (A female business owner)

This shows that the currently available vocational training schools are still limited to traditional skills training for women, making it difficult to meet the labor market demand. The types of skills training do not sufficiently prepare women to enter into higher-paying job sectors that have been primarily occupied by men, nor are they sufficient for women to be successful in pursuing self-employment. This signals the need to offer girls and women with low literacy the less traditional skills such as digital and technological related vocational training.

  • Physical Safety, Security Concern, and Limited Labor Market Information

Many female workers choose to work in factories closer to their homes out of concern for their safety when commuting between home and factories, as factories are often located in an industrial zone outside cities. As a result, women workers have less job bargaining power due to limited job alternatives available for them as well as less chance to work in male-dominated workplaces.

We prefer to work in factories where the majority of workers are women because we can travel between our homes and factories in groups with other female coworkers and we feel more comfortable and protected at work as well where there are more women. (Women employees at FGDs)

According to the FGDs and KIIs, there have been numerous incidents of sexual harassment cases reported at female-dominated factories in the economic trade zones. Participants repeatedly shared that both the employers and responsible authorities often fail to take satisfactory actions against the perpetrators. The trade unions seem to need a greater level of government support and autonomy in order to fully exercise their function as the mediator between employees and employers, as well as the body that can effectively protect trade labor rights. Additionally, women factory workers’ ability to access labor market information, especially for illiterate ones, is essential. Due to their inability to read, the lack of job information has become one of the reasons why they would stay at one workplace for a long time, with limited personal or professional growth pursuits.

  • Limited Suitable Financial Products that Meet their Business Needs

Despite the availability of trade credit and supply chain finance solutions in Cambodia, many women-owned exporting SMEs still struggle to find the type of capital products that meet their specific needs. Lack of information on available SME credit and trade finance options, low financial literacy, unfavorable repayment terms, high interest rate, costly commission fees, time poverty for preparing a competitive business plan and complex paperwork requirements are some of the key barriers that hinder women-led SMEs from utilizing the available financial services. The easiest source of financing is microfinance, however, the micro size and repayment terms do not serve their business needs, particularly their bigger and flexible cashflow needs for export.

MFI loan products are too small for many exporting women entrepreneurs, while traditional bank loans are either too big, the borrowing costs are also too high for the profit margins, or the repayment terms are not suitable for the business nature. (Women entrepreneurs in Cambodia)

Instead, many women entrepreneurs reported they prefer to start small from scratch with their own savings rather than on a larger scale with external financing. As mentioned previously, only a small percentage of women-owned businesses in Cambodia are involved in export activities, and those that are, are heavily concentrated in specific industries. On the other hand, some participants also reported that the lack of financial capital was one of the reasons they do not export as they need a larger scale to be able to export. This shows that women greatly hesitate to take financial risks from external sources, even if it means expanding their business or accessing potential benefits of exporting. Certain participants express hesitation when it comes to selling their ownership shares to equity investors due to their desire to maintain complete control over the management and operational aspects of their business. Similarly, some individuals are not inclined towards borrowing loans as they are apprehensive about the associated pressures of repayment obligations according to the agreed contractual terms. These factors may stem from a lack of comprehensive understanding and detailed information regarding the cost-benefit analysis of financing strategies for their business expansion. Interestingly, the fear of losing their collateral assets in the event of business failure is another significant concern and a primary reason why many women avoid pursuing capital loans.

  • Market Saturation Hinder Business Growth and Diversification

Both exporting and non-exporting firms led or owned by women in Cambodia are concentrated in similar industrial sectors, which makes the competition fiercer or quickly lead to market saturation. Specifically, women-owned SMEs are concentrated in fashion and apparel, beauty salons and cosmetics, handicrafts, and food industries (National Institute of Statistics of Cambodia, 2012). Moreover, many women entrepreneurs commonly choose the same type of business that they can run from home to balance household responsibilities. This often limits their options for the type of business or industries they are involved in, and causes them to remain micro-size without growing into SME level. Subsequently, they have fewer opportunities for business growth, due to the crowded sectors in which they compete, less time to devote to their business growth due to caring responsibilities, fewer opportunities for personal development, and reduced business networking activities.

Even though we may not be directly engaged in household chores or caregiving responsibilities, we still take charge of making decisions regarding the daily management of the household and oversee the activities of dependent family members, such as children and elderly individuals. As a result, we have limited time available for the growth of our businesses, personal development, and engaging in social networking activities. (Women entrepreneurs)

3.4.1.2 Vietnam

Similar to Cambodia, the study examined the reasons behind why, and under what circumstances, some trade sectors create economic opportunities for women and some do not in Vietnam.

In 2021, Vietnam's exports doubled as competitive minimum wage and low costs of utilities boosted foreign direct investment in the manufacturing sector. Vietnam's main exports are telephones, mobile phones and parts, textiles, computers and electrical products, shoes and footwear, machinery, and fashion accessories (OEC, n.d.). The women-led SMEs that we talked to often noted that they struggle to find skilled workers for jobs requiring technical skills within the specific industry they are in, especially when many workers decided to go back to their native provinces to be with their family during covid-19. Particularly, the factories located outside the capital city as well as the limited SME budget for human resources make it difficult to find affordable skilled workers who are willing to reside and work in the industrial zones outside the city.

  • Jobs that Require Physical Strengths

Due to the physical strength requirements, certain jobs are explicitly reserved for men according to the female employers interviewed. For example, supply chain companies reported that male employees are mainly hired for warehouses, transportation, and distribution points, while women are placed at packaging and customer service counters. Moreover, due to physical security concerns for women employees, jobs that require overseas travel or night shifts are mainly reserved for male employees as reported by the women employees.

Certain export industries such as overseas logistic companies, furniture, and machinery manufacturing companies also employ a significantly higher number of men than women due to the physical strength requirements of the job.

Only 10% of total workers are men in most garment/textile factories and they all are either machine mechanics or fabric cutters. Due to the nature of work that requires more physical effort, the salary is higher than for the female workers. (A male factory owner)

Our specialty coffee processing for export requires a lot of physical labor and being near the fire heat. We allow anyone that wants to do the job regardless of their gender. But the female workers choose not to do it because the tasks are too tiring for them. The solution would be to adopt advanced technology so that we can train and hire more females. However, that is too costly for my business size. (A female business owner)

As the previous quote shows, many of the obstacles that women face can be overcome with the use of technology and digital equipment, making it easier for women to engage in the workforce, and successfully navigate transitions as automation becomes more widespread. However, this often comes with a big financial investment which is often unaffordable for small businesses. The limited availability of affordable loan products for technology equipment investment for SMEs also exacerbates this challenge.

  • Gender Bias in Employer Preferences and Hiring Criteria

Similar to Cambodia, several Vietnamese enterprises also prefer male employees for positions that are appropriate for both genders, unless the position is a typical female role. Vietnam's maternity regulations are employee-friendly, with various provisions in place to safeguard employees both before and after childbirth. For example, employers must allow pregnant employees to get regular health checks, six months of paid maternity leave before and after childbirth, 10–50 days of leave for miscarriage or abortion, and other benefits. This is often a burden for SMEs with limited human resources to find and train temporary workers to fill in the gap. Aside from the difficulty of finding someone, training temporary employees is often costly for them. As a result, SMEs frequently use gender-based discriminatory practices throughout the recruitment process.

Women employees usually have a lot of distractions at work because of their family matters. Sometimes I feel bad if I don’t allow my employees to take leave when their babies are sick at home but my business really suffers when I do. Because of my business size, even one day's output of one employee makes a big difference to meet my client’s orders. I rarely see the male employees ask for leave because of their baby because they expect their wife to take leave and take care of it. (A female business owner)

  • Limited Access to Market Insights of Unfamiliar Industries

Women entrepreneurs tend to stay in the same types of business or sectors where they can obtain market information from their peers, as well as spend a substantial amount of money on outsourcing marketing activities. As a result, they are unable to invest in other areas of business growth, such as providing decent working conditions for their employees. Many women-led SMEs also spend a significant amount of money on business development and management consulting services to improve the financial system and access to information and legal document processing. They stated that training courses and capacity building programs of government initiatives are too broad and do not meet the specific need of many women-led exporting SMEs.

I don’t know how to do market research but I was told it is important for my business. So, I ended up spending a significant portion of my capital to hire a marketing consultant. Only if I could just easily browse the information, I needed by myself, I would be able to use that money to scale up my business, and it would have grown faster. (A female business owner)

  • Lack of Women Mentors and Role Models in Male-dominated Fields

The lack of female mentors/advisors and the lack of female sectoral-network connections often hamper women entrepreneurs from entering male-dominated sectors, such as manufacturing and exporting electronic devices, machinery electrical parts, bicycles, gem/stones, and agricultural commodities. As a result, women often end up choosing the products/services that they are familiar with or know the best. In those industries where high-level business is dominated by men, it is difficult for women to succeed without someone guiding them.

It is so difficult to do an IT business and competing with men-led businesses because sometimes I feel like I don’t belong to this industry. Many times, I wish there was another female that I can go and talk to. Someone who knows exactly what I go through and knows exactly about my struggles as a female entrepreneur in this industry. Unfortunately, there are not many women players. As a female, you really have to be assertive and tough to survive. (An IT business owner)

  • Lack of Women as Suppliers in the Value Chain

Women-led exporting SMEs in the agriculture sector reported that they typically source raw materials and inputs and that most of their direct suppliers are men. Even in a family-run business, women typically defer the responsibility of dealing with buyers to their husbands or the man of the house, as they perceive it to be a traditionally male responsibility. At times, the women entrepreneurs may find it difficult to engage with a men-only trade environment. As some respondents explained, they feel disrespected as women and the male suppliers would often prioritize to meet the demand of their men-buyers while failing to meet the agreed-upon quantity ordered or delivery date with the women-buyers. They regularly have to argue and act masculine in order to prevent the male suppliers from defrauding or cheating. They believe that only when they are verbally aggressive or assertive, their orders are adequately responded to in a timely and respectful manner. Female business owners stated that they would like to deal with, and see more, female suppliers in the markets. Therefore, there is still a significant gender gap in the supply chain and supporting women as suppliers in the agricultural sector is an untapped potential for trade-supporting agencies and the government to support women-exporters.

  • Language Barriers, Time Constraints, and Safety Concerns

Women-owned exporting SMEs in Vietnam face difficulties in finding and negotiating with buyers from other countries. Understanding the buyer's point of view and negotiating favorable terms of sale can be difficult because of cultural differences, language barriers, and a variety of ways of communicating. Buyers who they meet at trade fairs, and reach out to, do not seem to be interested in their products, according to many respondents. As a result, non-English-speaking business owners face challenges in finding the right customers and creating products that satisfy customer needs. The limited capital for their business size also means that SMEs are unable to invest in their business development activities outside the country.

Additionally, psychological barriers impede exporters from adequately engaging with others and networking. Burnout, not sensing the business benefits or not feeling welcomed among larger businesses at events, and uneasiness about traveling alone, especially at night or overseas, are common factors that contribute to missed opportunities to participate in activities related to international trade fairs, industry networking events, conference brand building, and establishing reliable business partnerships. There is a significant need to create networking opportunities for women entrepreneurs where they feel both welcomed and that are beneficial to their business growth. This may mean organizing women-only networking events, held at their convenient time and place, as well as opportunities to meet with industry experts and other women role models in their relevant sectors.

Business networking events are always only in the cities and in the evening. My factory is in the countryside and I don’t feel safe to travel far alone in the night. That’s why I never join such events though I know it is important for my business and my visibility. (A female factory owner)

  • Limited Suitable Financial Loan Products and Lack of Autonomy

Similar to the case in Cambodia, bank loan requirements and procedures including collateral ownership and other legal certificate documents were also reported as one of the main key barriers that hold back women-led SMEs from accessing SME credits. In Vietnam, it is still a cultural practice that household assets are registered under the name of the male household head. This means that women still need the approval of their family members including their agreement on fund usage, in order to obtain external finance, which causes business loss from delays or family conflicts. Further to this, the respondents also mentioned that the loan application processes are too complicated, requiring a lot of paperwork that women entrepreneurs do not have the time or capacity to prepare, especially in the case of lower-educated entrepreneurs. It is also important to remember that working women have the double burden of managing their household affairs and business matters at the same time. The currently available financial services for SMEs, including SME loans and trade finance instruments, have yet to address the specific and unique challenges that women entrepreneurs face in order to increase the number of women clients in their portfolios. A more focused transition from the traditional gender-neutral approach to gender-smart strategies is necessary. This is an area where trade supporting agencies can closely work with financiers to ease women’s access to financial capital in the trade sectors.

3.4.2 Broader Impacts of Trade Sectors on Women’s Economic Empowerment

Overall, the trade sector’s contribution to women’s economic empowerment is fairly similar for both Cambodia and Vietnam, therefore the findings are merged and presented collectively in this subsection. Moreover, the specific differences that may exist between the two countries were not fully explored in this study mainly as the research was not particularly designed for comparative case analysis.

  • Increase in Women’s Labor Force Participation

For many women in Cambodia and Vietnam, especially those with low literacy, working for the garment and footwear manufacturing companies was their first formal job and this is a crucial step towards financial independence and a path out of poverty. As repeatedly highlighted, export sectors such as garment, apparel and footwear manufacturing employ predominantly women and girls in both countries. The female workers at FGDs in both countries reported that earning their own income improved their decision-making and control over their resources. Many female workers of women-led SMEs are the breadwinners in their households, signaling women’s labor participation has the potential to reverse traditional gender role distributions. Existing studies have proved that increasing women’s labor force participation is associated with various subsequent benefits to both household and national economy levels. For example, higher household incomes improve financial stability and access to education, health, and other essential resources. Financial independence can increase economic security while decreasing reliance on social welfare programs. Furthermore, women-owned SMEs have a higher percentage of female workers than men-owned SMEs in both studied countries. This could be explained by the fact that the majority of women-led SMEs operate in sectors or industries where women's labor is preferred. Women are preferred in businesses such as fashion, cosmetics and personal care, value-added food products, handicrafts, and so on. Regardless, it was evident that export opportunities increased women’s labor force participation in both countries.

  • Increase in Women’s Entrepreneurship

The two governments’ gender-mainstreaming initiatives have the potential to significantly help women to participate in cross-border trade. For example, some of Vietnam’s gender-focused incentive policies include: (i) corporate tax incentives to account for hiring more female employees, (ii) SMEs owned by women to be supported with loans up to 50 percent of the contract value but not more than VND 150 million (US$6,500) per year (iii) medium enterprises owned by women are eligible for 50 percent of the contract value but not more than VND 200 million (US$8,700) a year (Vietnam Briefing News, 2021). The government’s trade promotion agency, VIETRADE, launched the online learning platform for women entrepreneurs focusing on trade-oriented business planning skills and e-commerce readiness. The platform has attracted and inspired entrepreneurial interest in Vietnamese women. In 2021, a total of 600 women signed up for the first course provided for one month. Moreover, to increase the financial access of women-owned and-led SMEs in Vietnam, the Asian Development Bank (ADB) recently signed a loan agreement worth US$25 million with a local bank in early 2022 (Vietnam News, 2022). The loan was accompanied by a $750,000 of grant for equipping the bank with technical capacity to serve women-led/owned SMEs effectively.

In Cambodia, the establishment of a women-focused institutional body has been a significant step forward for Cambodian women. The Ministry of Women's Affairs (MOWA) and gender working groups in each line of ministry that draft and implement gender mainstreaming action plans are among the institutions that support women's economic empowerment. The strategy focuses on three areas of intervention: (i) offering market-driven employment training for women; (ii) ensuring that women have the capacity to run and build their businesses and may progress from the micro to the SME sector; and (iii) enhancing rural livelihoods, particularly for disadvantaged women. Moreover, the government's commitment to expedite and digitalize customs procedures and cross-border commerce made cross-border trading more convenient especially for stay-home mothers.

Many home-stay women started to look for small-scale retail trade of agriculture commodities or FMCG products through e-commerce platforms while taking advantage of the digitalization of the customs clearance process from home. (A key informant in Cambodia)

  • Improvement of Women’s Autonomy and Agency over Economic Resources

Female workers reported that earning their own income has improved their decision-making and control over their economic resources. The majority of female workers employed by women-led SMEs are the breadwinners in their households. Many noted that earning incomes has given them the agency and autonomy on how they want to spend their money. Some even feel more respected by their husband and in-laws. This is especially important in reducing gender-based violence and improving women empowerment.

I was constantly pressured by my uncle family to get married just so I have someone to take care of me. I used to be very stressed about it and I didn’t know what to do as I couldn’t find any job to support myself. But since I found a job at the factory that didn’t care that I don’t have a degree or work experience, I was so happy. Now I can stay single as long as I want because I have my own income and contribute to my family household expense. (A teen girl high school dropout and factory worker in Vietnam)

This shows that having a formal job has an impact on women's decision-making power at home and in the broader community by delaying marriage, providing greater autonomy on fertility decisions, motivating progress on educational achievement and attainment, and solidifying women's personal decisions in all aspects of daily life. Therefore, women’s labor force participation subsequently empowers them.

  • Accelerating Human Capital Development amongst Women

In Vietnam, women factory workers reported to have developed an interest in further advancing their skill levels in foreign language, digital skills, and other technical skills in male-dominated factories. In response to this, there have been a number of skill training programs provided to female workers. The number of women graduating with Information and Communications Technology (ICT) and STEM-related degrees is gradually increasing. This is a result of the government’s recent effort in addressing technical skills shortages in mechanical and electrical-related manufacturing sectors that make up at least 50 percent of the country’s exports. Between 2005 and 2016, the national statistics show that the percentage of female STEM tertiary graduates in Vietnam doubled, from 20 to 37 percent (International Labor Organization, 2020). Therefore, it is expected that businesses will gain in the long run from a larger and more educated pool of working women in ITC and STEM related industries in Vietnam.

In Cambodia, women entrepreneur associations such as CWEA have also provided skills training to its women-entrepreneur members including digital literacy, business skills, and leadership skills. With support of Canadian Trade and Investment Facility for Development (CTIF), Nomi Network is currently preparing to provide training to women-led/owned SMEs in Handicraft and Fashion Sectors. The training modules will focus on enhancing digital marketing, exporting, and promoting women entrepreneurship, among others. Moreover, women-led SMEs tend to provide skills training and hire women workers for their handicraft or food processing businesses according to the key informants. This is considered important given that women are hired for most of the low-skilled required jobs in these industries.

In terms of government initiatives, the key informants shared information about the Factory Literacy Programme (FLP) which was developed by the Ministry of Education. The Cambodian garment sector employs a huge number of women with poor literacy rates. FLP was launched in 2016 with the goal of upskilling the female employees and helping to address the skill gap in the textile, footwear, and apparel industries. Learners who complete the course receive a certificate of completion from their individual provincial education offices, which is recognized by the Education Ministry as equivalent to Grade 4 formal education. In 2021, UNESCO and the Ministry launched new textbooks that will allow students to attain a Grade 6 equivalence. Since its inception, the FLP has enrolled 2,063 people from 12 provinces through 25 partner industries, with a 72 percent completion rate.

I grew up in the rural farming household and I didn’t have any vocational skills to get a job. I only knew how to feed food to animals or clean the house at home. But as soon as I started working at the snack making factory, I was given training on the job and I can now know all the process of how to make different types of snacks from baking and storing methods to packaging. I would like to have my own bakery business one day. (A women food processing factory worker in Cambodia)

During the FGDs with the factory workers, many noted that they never read the contract they signed with their employers mainly because they find it difficult to read or understand the technical terms used in the contract. When they later need to negotiate their pay and benefit package, resign and discuss promotion matters in the middle of their contracted term, they often find out certain contract conditions that they do not agree with. This also shows the importance of familiarizing/educating low-literacy workers with important legal papers, labor law, HR regulations, and their basic human rights.

  • Promoting Responsible Business Practices

As today’s consumers are becoming more and more educated and cautious on environmental and social impact, the market demand is moving toward a responsible consumption trend. At the same time, the women entrepreneurs have quickly captured the business opportunity that comes with the trend and using it as their competitive advantages in both countries. According to the key informants interviewed, creating business value propositions through environmental and social impact has become increasingly popular amongst the women entrepreneurs in both countries. This includes organic and natural-based products, hiring stay-home mothers for handicrafts, adopting environmental-friendly packaging and labeling, and social-impact marketing strategies that highlight gender-neutrality, social inclusion, veganism, and animal free-testing etc. Through product and consumer education campaigns, the target consumers have also increased their social and environmental awareness. Based on this, women are also considered more innovative and creative compared to their male counterparts. This may also be linked to the nature of competing in a saturated market that often forces women-led companies to be more innovative and customer-centric. Additionally, the key informants stated that women employers are more compliant with commercial tax and provide better employment insurance benefits than men employers.

  • Increase Women's Representation in Leadership

National statistics in both countries indicate that the number of women in senior leadership positions in both the private and public corporations is gradually increasing. Particularly in Vietnam, the percentage of women holding board of director roles in the private sector is rising rapidly and is slightly higher than the global average. According to the key informants, women who run their own enterprises are more likely to take on leadership responsibilities in their communities as well. This is especially crucial in patriarchal settings where women are rarely seen in leadership positions. Furthermore, this encourages women to pursue leadership roles in government institutions and politics, where they may make critical public decisions representing the female population.

Since I started my business, my self-confidence and leadership skills have improved a lot. I suddenly became someone that women and girls to seek advice from in my community. Even my father and uncles listen to my opinion which is rare in this small town. (A Vietnamese women entrepreneur in the countryside)

  • Promoting Gender-Smart Workplace Policies

In both countries, employees at companies led by women reported having greater HR policies compared to male-led enterprises. In particular, these are practices related to pay reductions for maternity and menstrual leave, protection mechanisms against sexual harassment, safeguarding against peer abuse, and promotion of women to managerial roles. The female employees observed that female owners and managers are more compassionate and understanding when it comes to the gender-specific needs of the female employees. Employers in Vietnam specifically claimed that a more gender-equal workplace builds a positive brand image and attracts talent. Moreover, job satisfaction coming from fair and equitable working conditions encourages low-educated women to remain in the formal workforce.

  • Improving Household Socioeconomic and Extreme Poverty

Female workers in both countries reported that having an income helps them to alleviate their household’s extreme poverty. The majority of women are driven by the desire to provide better educational opportunities for their children with the hope that their next generations will have better employment opportunities and improved living standards than they do. They also believe that having a stable income source allows them to be more resilient against financial shocks. Prior to their factory job, they would usually go to microfinance institutions or informal lenders when they need money urgently for non-productive purposes such as medical bills and school fees. This often comes with high interest rates, and they are often trapped in a debt cycle. Moreover, the female employers in both countries noted that their increased income from running their own businesses has enabled them to improve not only their household economic situation but also those of their relatives. It is apparent that women's economic empowerment clearly has a multiplier effect.

Now that both my daughter and I work thanks to the exporting factories, we have finally saved enough capital to open a small grocery shop. My 60 years old father will stay at home and run the grocery shop. I hope my daughter can resume going to college in three years. We are earnestly working hard and saving money for that. (A single mom working at food processing industry in Cambodia)

3.5 Conclusion

In this section, drawing on the qualitative findings from the first two research questions discussed in the previous section, we address the third research question by proposing policy recommendations for the respective national governments and trade supporting agencies.

3.5.1 Cambodia

  • Gender Integration in Trade-related Policies and Strategies

In order to achieve economic liberalization and trade promotion, Cambodia has initiated technical assistance from various development partners through national trade programs over the past years. Firstly, the establishment of a women-focused institutional body, the Ministry of Women’s Affairs (MOWA), has been a significant step forward for Cambodian women. MOWA focuses on three areas of intervention, namely (i) offering market-driven employment training for women; (ii) ensuring that women have the capacity to run and build their businesses and make progress from the micro to the SME sector; and (iii) enhancing rural livelihoods, particularly for disadvantaged women. Secondly, the Rectangular Strategy (RS) of the Government of Cambodia comprises four objectives within the core themes of “Growth, Employment, Equity and Efficiency”. This national strategy explicitly features gender equality in the strategies and is a blueprint to guide all stakeholders. Moreover, the Cambodia Trade Integration Strategy (CTIS) also mentions the importance of women in trade, calling for further mainstreaming of women empowerment in trade and business development policies (Kingdom of Cambodia, 2019).

However, other trade related policies still lack the integration of women empowerment strategies. For example, policies that provide legal incentives and that encourage women-led businesses to export have not been clearly identified. Specifically, there are still no explicit plans or priorities in place to assist women-led exporting businesses in integrating into the global trade network and moving up the global value chain. We also observed that many capacity-building projects are fragmented and not especially oriented at aiding local women-owned exporting SMEs, while trade assistance programs have mostly concentrated on creating fundamental trading infrastructure. Therefore, the explicit policy commitment towards women exporters/importers is necessary to make the institutional support work effectively for women players in cross-border trade sectors.

  • Gender Mainstreaming Free Trade Agreements

The global pandemic has forced many exporting SMEs to close or scale down their operations, thus disrupting the economic activities of women-led SMEs. With this background in mind, we conducted literature reviews on Free trade agreements (FTAs) that could play an important role in countries’ economic recovery efforts post-COVID-19. We believe that FTAs are a great tool for governments to encourage trade partners in initiating laws and procedures that benefit women in trade and commerce. However, the findings show that none of the free trade agreements integrate gender mainstreaming that will help to increase female players in the trade sectors. Nor do they refer to international normative frameworks such as the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW).

This is a missed opportunity to build on existing frameworks that could easily be modified during policy revision. It is crucial that such agreements also address historical, legal, economic, and/or socio-cultural factors that influence gender equality and trade for maximum mutual benefits. (A key informant)

FTAs could explicitly address women's economic empowerment and their contribution to economic growth by collaborating on activities to assist women entrepreneurs and workers, and to make sure they benefit from the trade opportunities created. The activities may be centered on: establishing institutional mechanisms within trade agreements to facilitate collaborations with women groups, special provisions to increase female suppliers, improving access to simplified and verified information on complying with various customs requirements of different importing countries amongst women exporter networks, synchronizing cross-country legal frameworks on financial fraud and cybercrimes, increasing women's international market access and market diversification opportunities, exchanging information and experiences about technology and financing, developing women's leadership networks, and identifying best practices for gender-responsive labor standards.

  • Gender-smart Financial Capital and Trade Finance for Women-led Exporting SMEs

The unmet credit demand from Cambodian women-owned micro, small, and medium enterprises (MSMEs) is estimated to be $4.2 billion (International Finance Corporation, 2022). Trade finance has been well known to enhance SME engagement in international activities such as direct exporting and global value chain participation while improving a country’s export and import growth. The lack of access to information on trade finance and low financial literacy amongst the women entrepreneurs may answer why most women entrepreneurs participating in this study have not used trade finance services in Cambodia.

This is also a big missed market opportunity for the supply-side. Financial institutions in Cambodia can adopt a gender-lens strategy in their products and services to increase the female-client portfolio. For instance, trade finance instruments can address the challenges of women exporters with working capital shortages or cross-border payments that are typically more expensive, take longer, and are less transparent than domestic payments. Another example is that financial institutions and development aid donors can partner to adopt blended finance or governments can partner with private banks to create collateral-free SME loan options focusing on women exporters and importers by providing guarantees. While the demand side can be provided with financial literacy training and business technical assistance, the supply side actors will also need to be equipped with the know-how and gender awareness on how to effectively adopt a gender-lens into their fund management and financial products designed to serve women-led SMEs effectively.

  • Industry-Specific Trade Information for Market Diversification

The women interviewed reported that they do not rely on free trade agreements due to a lack of knowledge and capacity to deal with the complexities of international trade procedures. They also repeatedly noted the limited access to trade information and industry-specific trade support as a key barrier to their business growth. There are a few business information hubs such as the Business Information Center which focus more on business registration procedures rather than export-related information. Therefore, businesses are mainly relying on general information that comes from their peers (other women entrepreneurs) or business associations but with limited industry-specific information. They wish for easy access to industry-specific market information. An offline or online 1-stop export solution incubator with sector-specific expertise services for exporting SMEs may be beneficial. The 1-stop incubator can be linked with Cambodian embassies in exporting countries. The services may include foreign market research information and regulations, potential buyers and partners, financing options, shipping and logistics, trade events and e-commerce resources, due diligence and intellectual property related support, and any other export/import related problems.

  • Clustered Peer-Support Networks

Entrepreneurs must frequently make risky decisions, resolve difficulties and disagreements, and deal with ongoing obstacles and challenges. Due to overwork and pressure to obtain clients or raise profits, the women entrepreneurs noted that their self-care activities that promote relaxation and restore appropriate balance are mostly neglected. Clustered peer support network groups are based on the idea that women who have been through similar industry or export product or same export destinations can help each other with important insights and other mental support and help each other overcome business problems or reach goals by sharing their own experiences and knowledge. The women entrepreneurs and women supporting associations suggested that TSOs should facilitate peer-support network groups where only exporting women-led business leaders from the same industries can connect, seek synergies, share trade/market information, and have one voice for policy improvements.

  • Diversifying Demand-based Vocational Training for Women

According to the female employees, the current training programs are not necessarily responsive to the needs of women and girls. The literature that we reviewed suggest that the formal technical and vocational education and training (TVET) system in Cambodia is still in its infancy, with gender gaps in TVET access, quality, and institutional capacity. The lack of skills in supply–demand matching between women's vocational education programs and labor market demands limits women's labor-market participation and benefits, as well as their economic empowerment potential. This contributes to most female workers being concentrated in low-paying, low-skilled job sectors.

Additionally, the Cambodian government has just recently started implementing efforts to diversify the country's exports away from low-value-added textile goods and toward higher-value sectors such as automotive and electronics. The majority of technical and vocational training in these high-skilled and high-paying manufacturing sectors is provided to men while the aim is to increase the number of highly trained individuals available to meet the human resource needs of the sectors’ firms. This suggests that gender considerations are not sufficiently integrated into skill development programs designed for male-dominated industries. The respondents suggested that vocational skills training should target more women workers with the aim of increasing women’s labor force participation in male-dominated industries with high-skilled and high-paying jobs. Moreover, many female factory workers, who account for the majority of the female workforce in the exporting sector, reported that they have never read their job contract documents due to low literacy as well as a lack of awareness of their importance.

  • Gender-responsive Labor Law

The FGDs with employees show that it is still necessary to raise the minimum wage for export-oriented factories and improve working conditions for women by enforcing amended rules and regulations. With volatile inflation and rising prices, salaries offered years ago can no longer cover basic living expenses. Workers of both genders believe that the policy governing the minimum wage should be amended because the vast majority of employers will not pay more than the statutory minimum wage.

We can no longer afford to pay for our dependent family members' education and healthcare, such as children and the elderly. This causes us a great deal of distress, as well as insufficient food and nutrition and poor living conditions. (Women employees)

Furthermore, sexual assault, power or verbal abuse, and physical violence are all examples of workplace harassment and are more prevalent in larger factories owned by local male employers or foreigners.

Employers are ignoring the issues and sometimes even blaming the victims, which discourages workers from coming forward and speaking up. (Factory workers)

This appears to have a negative impact on workers’ trust in their employers as well as their overall workplace environment experience. The employees expressed that they believe their employers and other responsible parties must take serious action against workplace harassment incidents. Moreover, as mentioned before, Cambodia's trade unions need the government's full support in handling the issue, as a collaboration between trade unions and businesses is crucial to achieving workers’ welfare.

  • Demand-based Capacity Building for Women-led Exporting Businesses

Cambodian women entrepreneurs reported having difficulty predicting and controlling risks associated with their business operations and marketing strategies. Of those who participated in the current study, the vast majority had no written business risk management plan in place to deal with financial losses and unforeseen adversity in their day-to-day operations. According to the KII respondents, training in soft skills is essential in capacity-building programs. Most respondents in both nations believe that businesswomen need to improve on their packaging and labeling designs, branding with food safety handling practices, advanced promotional materials on the internet, and their business visibility within their respective industries.

3.5.2 Vietnam

  • Gender Integration into Trade Policies and Strategies

Vietnam has recently put significant effort into increasing the number of women entrepreneurs and women in the labor force with multiple policies and strategies in place. Surprisingly, most businesswomen and managers were not aware of the existence of certain policies, especially in regard to SMEs and gender related tax and loan incentives. The respondents expressed that the written policies are still yet to be taken into action effectively. They have not yet witnessed anyone benefit from these in their respective export network, which could be due to the limited access to policy information of the women-led enterprises. Translating objectives into effective implementation can be difficult and the government could improve its communication materials and information channels as a first step. In terms of government support, the overwhelming majority of the women business leaders shared they benefit the most from international and national trade fairs. Due to the SMEs’ marketing and business development budget limitations as well as the limited capacity on finding overseas B2B partners, the ability to network and showcase their products and services at trade fairs has been helpful for their company's visibility.

While Vietnam has fully incorporated gender into the country’s SME economic development strategies, it has yet to be fully integrated further into trade strategies, including export and import priorities. In 2020, the EU Parliament ratified the EU-Vietnam Free Trade Agreement (EVFTA) which includes commitments toward improving labor rights and gender equality. The Vietnam-Chile FTA also includes provisions that reflect their awareness and recognition of gender inequality as a problem, however, without a standalone chapter. These provisions are intended to encourage parties to work together on possible aspects such as empowering women in different ways by improving access to markets and financial opportunities and helping women overcome the barriers that currently prevent them from accessing financial opportunities.

In the meantime, these policies have yet to transform into practical implementation and enforcement at local levels, thus bringing the intended benefits to the women players. Women exporters still face barriers surrounding complex customs processes, tariff or non-tariff barriers, and lack knowledge on trade agreements and regulatory frameworks related to product standards, labeling requirements, certifications, and intellectual property rights. This can be due to a range of factors, including differences in institutional capacity of trade supporting agencies, information asymmetry, and other political and social barriers. It is crucial to keep working toward advancements and improvements to strive toward effectively converting sound policies into significant actions. Some of the potential bottlenecks to look into include addressing capacity gaps amongst the responsible local government and state enterprises personnel, increasing public awareness, involving civil society and relevant associations, and nurturing follow-up partnerships across borders.

  • Incentives and Instruments for Good ESG Performing SMEs

Women entrepreneurs in Vietnam tend to incorporate social and environmental impact into their business model and use it as a competitive advantage in their marketing strategies according to the key informants. Special provisions should be designed for good social-performing SMEs that engage in trade. This may include tax holidays/discounts, interest-free public loans or guaranteed loans, and easing operational bottlenecks and risk management for ESG impact investing funds and philanthropy ventures through FDI and financial policies. The country's environmental regulatory system still lacks incentives to encourage better environmental performance for the SME sector, and it is also unclear how much emphasis is placed on promoting environmental compliance by SMEs. There are numerous greening support schemes and financial incentives in the country’s private sector focusing on larger companies and there is little evidence that SMEs benefit from them. The Vietnam government has introduced programs such as the Rural Electrification Fund and the National Biodigester Programme that offer financial loan incentives for specific technological adoption for environmental sustainability. However, the programs do not target SMEs, and are funded by donors that may limit the reach and longevity of the program. Currently, The Alliance, under Mekong Sustainable Manufacturing Alliance, is a program that aims to drive manufacturers’ adoption of ESG standards in Cambodia, Thailand, and Vietnam by engaging hands-on with factories, leveraging brands’ purchasing power to incentivize ESG improvements, building manufacturers’ capacity to undertake such improvements, and increasing their access to finance (USAID, n.d.). The program’s focus industries include apparel, footwear, electronics, and food processing sector where women labor force participation as both employees and employers is high. Through such programs, the policymakers should ensure the incorporation of a gender lens and inclusion of women-led SMEs in promoting national ESG performance schemes.

  • Country-specific Market Intelligence Portal

According to the women entrepreneurs interviewed, the cost of marketing services such as market research, brand building, and product promotion activities accounts for the majority of their business expenses. They believe they need to improve their marketing strategy knowledge and capacity, particularly in market research, in order to better understand the specific demand of their potential export markets and the supply situation. They would also like to learn more about how to use research and data analysis for business development and growth. Furthermore, while the majority of them asserted that they have a marketing plan, they do not know how to systematically prepare or implement strategic marketing and branding strategies. Trade support agencies could consider developing a Market Diversification Tool to help women-led businesses identify potential new export markets. The tool may provide current trade patterns of various countries and enable businesses to easily compare different potential export markets. Additionally, it can also provide product-specific trade information to enable companies to decide whether potential markets are ready or suitable for their products. Finally, the enabling environment to directly engage with distribution networks including distributors, retailers, and logistics providers in a different country can be critical for women-led SMEs. Differences in language, business culture and etiquette sometimes limit effectively building cross-border market linkages. Investing in technologies and training that address these barriers as well as coaching services on adapting business strategies to align with local preferences of different markets could be beneficial.

  • Tailored Loan Products for Women-led Exporting SMEs

Similar to Cambodia, there is a need for financial institutions in Vietnam to deliberately target women-led SMEs as a market segment and offer the types of financial products designed to meet the specific needs of women entrepreneurs in trade. According to the respondents, the SME investment banks currently show rather low levels of gender awareness and adoption of a gender lens into their credit processes. This includes a lack of gender-disaggregated data collection, a significantly lower number of women borrowers in loan portfolios, a lack of initiative to increase the number of women borrowers, a lack of gender-based customer segmentation and lack of technical support to borrowers, as well as little consideration of gender-specific disadvantages that women-led SMEs face in the loan processes. SME-lending financial institutions should be provided with practitioner training in order to deliberately target women-led exporting SMEs as customer segments; adopting gender perspectives throughout the loan process would benefit both parties. Simpler and more straightforward procedures for government loan applications through a 1-stop online system were also recommended by many business owners whose factories are located in industrial zones outside Ho Chi Minh City.

Currently, Vietnam's credit rating is lower than that of regional peers such as the Philippines or Thailand. During the multi-stakeholder consultation workshop for this project in Vietnam, the participants raised concerns on business fraud, especially payment risks, associated with cross border trade. Due to the limited resources and information access for due diligence and a lack of track record, both exporters and importers may face counterparty risks while entering new markets and interacting with first-time non-resident SME customers and sellers. To address this, trade finance options should be made more accessible to the women entrepreneurs engaging in cross border trade. Opportunities on digitization of trade financing should be explored on the supply side while the demand side is provided capacity building to improve their digital and financial literacy. In addition to this, policymakers should find a way to improve the law enforcement mechanism on business fraud associated with cross-border trade through multilateral trade agreements.

  • Demand-based Capacity Building Designs for Women-led Exporting Businesses

International development agencies and women entrepreneurship associations have also provided a number of capacity-building training programs targeted directly at women-led SMEs. However, most business training programs for women are one-size-fits-all in nature and the topics are general according to the women entrepreneurs. They indicated that participating businesses could benefit more significantly from such business development training if participants are grouped by similar size, industry, or by business nature. They suggested that the training materials should be tailored to the specific requirements of various types of businesses from various sectors and industries. Clustered training designs that are solely focused on women-led exporting businesses could be especially beneficial. Prior to each training program, a demand assessment should be conducted to ensure that the specific training needs are addressed and covered by the trainers. Additionally, training on innovative product development for exports, including demand and feasibility assessment for the targeted international market, was specifically suggested by the respondents.

  • Leveraging E-commerce Tools

Along with the realization of the importance of e-commerce, the female entrepreneurs expressed a desire to shift their business from traditional to online platforms. Thus, they wish to adopt affordable and user-friendly digital tools available for their online stores, cross-border payments and SME-friendly cross-border logistics, and legal aspects of running an electronic business. Moreover, businesses that are already conducting business online are interested in learning about online content management and social media marketing techniques in order to help them attract more customers. As mentioned, VIETRADE recently launched an online learning platform focused on female entrepreneurship in the digital economy. While many people are finding the training useful for growing their businesses, they also believe that exclusive programs targeting only exporting women-led SMEs would be even more effective. In partnership with the Korean and Chinese governments, Mekong Institute has been delivering capacity building projects on cross-border trade-oriented e-commerce development, targeting women-led SMEs as well as relevant government officials from Mekong countries, including those in Vietnam and Cambodia. This is a good example of an initiative that helps women-led SMEs improve their cross-border trade through e-commerce opportunities.

  • Leadership and People Management

For small businesses, leadership and people management skills are essential since they have an impact on productivity, employee satisfaction, attracting talent, adaptability, and the company's overall reputation and performance. There was a consensus among female business owners that it is challenging to manage people in a way that maximizes production while also retaining and satisfying employees. For a small firm to succeed and thrive over the long term, the leader must be able to inspire and motivate the team through challenging times as well as change strategy in response to changing market conditions or new business prospects. The entrepreneurs interviewed expressed their wishes for being more self-aware of their leadership styles and the importance of gender equity and creating a healthy work environment for their employees. By understanding how to motivate, delegate tasks, and provide guidance, the women entrepreneurs can create a productive work environment that encourages employees to perform at their best. Additionally, the reputation and brand image of business owners are strongly impacted by how they lead and manage their staff. This is an important factor in attracting top people, establishing customer loyalty, and the overall success and sustainability of a business.

3.5.2.1 Concluding Thoughts

The emerging economies of Cambodia and Vietnam offer lessons about the importance of trade as a vehicle for increasing the opportunities and incomes of women in the workforce. As trade increases, the opportunities for employment and enhanced income proliferate in the form of increased labor opportunities in higher-paid tradeable sectors. Trade has been associated in both countries with the growth of manufacturing. As the manufacturing sector increases in importance, women are able to earn increased salaries, though these opportunities accrue more to women located in urban centers. It is crucial to note that women in rural areas are able to migrate to urban centers, but the bulk of their salaries are remitted to their families in the countryside.

SME financiers in both countries, including commercial banks, public lenders, and equity investors, must incorporate a gender lens into their strategy and operations. Various research reports and policy briefs have repeatedly emphasized the issue of access to finance as a major obstacle to the growth of women-led SMEs, but with little discussion of the necessity for supply side gender mainstreaming. With a gender lens, microfinance institutions mostly serve women from rural households and micro-sized businesses. We discovered that most commercial banks and private investors in both countries that offer SME finance do not deliberately target women-led SMEs as a market segment in their marketing and product design strategies, nor have they ever received gender mainstreaming training that will equip them with the necessary knowledge and tools to effectively serve women-led entrepreneurs with unique needs. We believe this is essential because, as highlighted in previous sections, women exporters/importers require fairly specific financial solutions. Furthermore, there is still a need to make trade finance instruments available and accessible to the women-led SMEs in both countries. We strongly recommend that opportunities for digitization and gender-mainstreaming of trade finance services should be further explored.

As sustainability, social impact, and climate change have become major topics in recent years, a variety of initiatives that link gender and the environment have been implemented. These efforts, however, are primarily concerned with how women are affected by environmental issues or how rural women might benefit from renewable energy, for example. According to our study, women entrepreneurs are more likely than men entrepreneurs to incorporate an environmental or social impact lens into their business plans, particularly those engaging in exports. However, there are no incentives in place to further reward or promote SMEs for their good ESG performance. Tax incentives for ESG performance are only available to large corporations at the moment. We believe that good ESG-performing SMEs should be offered public loan incentives without collateral or interest, to help them grow their businesses. Governments should also consider easing the enabling environment such as operational risk management of impact investing funds and philanthropy ventures through FDI and financial policies. Gender disaggregated data to understand what percentage of male and female entrepreneurs in the SME sector export what items and at what scale is not available currently. Such specific data will tell us when market saturation risks arise, or whether industries have a lower market share of women-led SMEs, and how trade support agencies can adjust their services accordingly. The limited gender-disaggregated data limits the analysis of opportunities for improving women economic empowerment.

Finally, with respect to the preceding point, we cannot emphasize enough the importance of creating market diversification opportunities for women-led SMEs in both countries, as well as job sector diversification chances for women employees. When it comes to trade-oriented sectors, women tend to choose the type of business they are most familiar with rather than the most feasible/profitable, which appears to lead to market saturation. Likewise, female workers are also crowded in low-skill and low-pay jobs. The issues surrounding women's concentration in a few industries requires more attention and solutions in order to bring more women into industries where men are overrepresented. Online or offline one-stop export/import solutions centers that link with Cambodian and Vietnamese Embassies could be beneficial. Women's TVET programs must also extend their gender-stereotyped and self-employed focus training courses to more digitally oriented and job demand-responsive skills training.

Moving forward, trade supporting agencies could consider an ecosystem approach to women’s economic empowerment. The following specific interventions can be considered for strengthening women and girls in the trade sectors from developing countries of Southeast Asia.

  • Policy research and advocacy forums with trade support agencies and relevant ministries to integrate gender components into trade-related policies and strategies, including bilateral and multilateral free trade agreements, to ensure equal access to trade opportunities for female players in the global value chain.

  • Gender mainstreaming workshops and gender technical assistance to financiers including SME investment banks, private equity investors, and trade finance services providers to design, measure, and offer gender-smart financial products and services for women entrepreneurs.

  • Industry-specific trade market information or online resource center in local languages for women exporters to diversify their target markets/industries and to access the market of importing countries.

  • Industry-specific peer-support networks amongst women exporters for exchanging information/experience and building like-minded support systems.

  • Demand-based vocational training for women workers in trade to diversify their options for job opportunities as well as attain more leadership positions within the trade sectors.

  • Gender equality and equity workplace performance recognitions and awards to companies in the trade sectors.

  • Finally, the digital economy has allowed SMEs to participate in global value chains, and trade support agencies could encourage women business owners to take full advantage of e-commerce and digital business services. This could include capacity building activities on the usage of digital marketing tools, conducting online market research and virtual market linkages, digital brand building and product promotion, digital supply chain management, digital financial services, and digitization of trade finance instruments.