by Jozefina Cutura
– USA –
With Hillary Clinton’s recent campaign for the presidency in the United States at its end and women leaders taking charge in countries from Chile to Liberia, women’s advances in politics are making headlines. But in countries around the world, especially those recovering from conflict like Bosnia and Herzegovina, women are making strides in the business arena too.
When ethnic conflict broke out in 1992, Ružica fled with her husband and two children to Serbia, working various menial jobs to help put food on the table. But when the family returned to their ravaged home in Bosnia, Ružica decided to take matters into her own hands.
“In Skelani I saw a kiosk that was in a fairly good shape, so I decided to invest in opening it,” she says in an interview. Skelani is in a remote region of Bosnia that is poorly accessible by roads and has seen a large number of people emigrate elsewhere since the war. Despite the town’s remoteness and its shrinking population, Ružica remained undeterred. Initially, as people continued to move away, her profits were low. But she persevered and today Ružica’s convenience store has an excellent reputation in the community, steadily attracting customers from across the region. She employs four female workers and has created a stable source of income for her family.
Ružica is among a growing number of women in Bosnia and Herzegovina who are charting new economic futures amid the country’s recovery. The fact that they are succeeding is remarkable considering the formidable obstacles in their way. According to World Bank data, only 43 percent of the country’s women are in the labor force, compared to the global average of 53 percent. In 2007 the unemployment rate for women was 33 percent, 6 percentage points higher than for men; 63 percent of girls graduating from high school were likely to be unemployed in 2007.
Faced with poor employment prospects, Bosnian women are increasingly building their own businesses as a source of income to support their families. A survey by the World Learning STAR Network, a Bosnian non-governmental organization, found a marked increase in the number of women interested in starting their own businesses, up from 18 percent in 1998 to 60 percent in 2002. Women in this formerly socialist country now make up 27 percent of all business owners, a figure that is comparable to regional averages.
Escaping poverty is a major goal for many Bosnian women starting businesses. Data from the national statistics agencies show that about 25 percent of Bosnia’s households are headed by women (15 percent of whom are widows), and 61 percent of these live below the poverty threshold—a rate twice that of male-headed households.
Many other women, especially returnees who lived abroad during the war, have come back with both ideas for business ventures and start-up capital. Mirsada Mehmedinović returned to Bosnia from Italy after the war, bringing back a young Italian husband along with newly acquired skills in tailoring. Living in a part of the country heavily polluted by local factories, Mirsada was looking to start a business that would offer employment opportunities to the community without further harming the environment. In her hometown of Lukavac she built a garment factory that produces stylish shirts for export to the Italian market.
But these budding women entrepreneurs still face considerable challenges. Bosnia remains a difficult place to do business: the World Bank Group’s annual survey of business environments ranks Bosnia 105th out of 178 countries on the ease of doing business. The country’s business environment can be especially tricky for women, whose businesses are often smaller and less well equipped to deal with bureaucratic hurdles.
For women entrepreneurs, onerous business licensing requirements and labor laws can be especially problematic. Mirsada had to hire over 50 employees when she opened her shirt factory, but quickly ran into problems. “There is no flexibility with employees. The state does not offer good training for workers,” she says in an interview. “We are coming out of a communist system, and the state is insuring people who do not have good work habits. We have gone through 150 workers to get 50 good ones.” Even though Mirsada decided to set up her business in 2003, it took two and a half years to obtain all the necessary paperwork and permits from the government. She recalls having to go to various different ministries, often with no clear explanation of who was responsible for what. These challenges slowed the construction work on her factory considerably; she was not able to start operations until 2006.
Bosnian women’s access to finance offers a more encouraging story. Whereas in much of the world access to finance poses a key obstacle for women, in Bosnia women make up a larger percentage of bank borrowers than men, with men being more likely to borrow from family. Microfinance institutions have also stepped into this post-conflict environment, providing funds quickly and with fewer requirements than commercial banks. MI BOSPO is one such organization that has helped nearly 27,000 female clients finance small businesses over the past decade.
But Bosnian women take out smaller bank loans than their male counterparts – $2,169 versus $2,725, on average, according to the World Bank – and they are more likely to use their loans for daily family needs rather than invest these funds into their businesses. There is still a lot of room to educate women on the benefits of investing in business and funds management, and the women interviewed were eager for such training.
Not only do Bosnian women invest less money in their businesses, but they also invest less time. According to data from Bosnia’s statistics office, a female entrepreneur spends, on average, 29 hours per week on her business, whereas a man spends 47 hours. With childcare costs often monopolizing a woman’s average monthly salary, for some Bosnian businesswomen being one’s own boss is not only a good way to earn income, but a way to also accommodate family responsibilities.
Traditional attitudes about a woman’s proper place in society can also get in the way. Ružica often has to fight prejudice based on sexism. “Even when our business partners know that they should come to me to resolve certain questions, they turn to my husband instead,” she says. Ružica thinks that high unemployment rates among women are due to their limited mobility and “their high level of responsibility within the family. We still need to take care of all the household chores.” This has not deterred her – she is well-respected in her community and in 2004 was the first woman to be elected to the People’s Committee in her town. But for many others, these attitudes remain an obstacle.
Some women lack the self-confidence to run a business. Some 34 percent of the women interviewed in a 2002 survey of 428 women across Bosnia said that they were unsure whether they had the right skills and knowledge to start a business. Businesswomen could also benefit from being better organized. Professional business organizations in Bosnia tend to have limited female participation, leaving women with few venues for sharing the ideas and knowledge that could increase their business success.
Multilateral and non-governmental organizations could help address the needs of businesswomen and assist Bosnia’s government in strengthening their potential. Donor assistance in Bosnia and Herzegovina has focused overwhelmingly on such issues as women’s political participation, peace building and human trafficking. But there has been gap in the business arena. In other post-conflict countries, donors have also been slow to capitalize on women’s economic potential. It is high time for this to change.
The women running businesses in Bosnia are focusing on the future. According to Mirsada, “I am planning to increase my production by another 100 percent and hire another 120 to 130 workers. Very few things in life can deter me once I’ve set a goal for myself.”
– The IFC’s full report and findings are available here.
Disclaimer: The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Executive Directors of The World Bank Group or the governments they represent.
The World Bank Group does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries.
About the Author
Jozefina Cutura has worked on gender issues for the World Bank and its private sector counterpart, the International Finance Corporation, and has published on the subject widely. Jozefina earned her B.A. in International Relations from Stanford University and a master’s degree in public policy from Harvard University’s John F. Kennedy School of Government, where she focused on international development, and issues of gender and conflict.Originally from Bosnia and Herzegovina, which she left during the country’s war, Jozefina has also lived and studied in Germany and France. She currently lives in the United States and is working on a collection of short stories.
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