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OPINION: How better childcare can boost growth across Asia

by Nena Stoiljkovic | International Finance Corporation (IFC)
Thursday, 18 July 2019 10:30 GMT

A mother with a child takes a selfie after attending Friday prayers at the Faisal mosque during the fasting month of Ramadan in Islamabad, Pakistan May 17, 2019. REUTERS/Saiyna Bashir

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Childcare is not just a women’s issue. It is a family issue and a business and economic imperative.

Nena Stoiljkovic is regional vice president, Asia and Pacific, International Finance Corporation.

The struggle of balancing work and parenthood can lead to a host of unwanted outcomes: absenteeism, lateness, low productivity, distraction, exhaustion and stress. The challenge is even more acute in a country where childcare options for children up to the age of five are limited, unregulated and inaccessible to most people.

Many countries in the Asia Pacific region struggle with the issue. Rapid urbanization has exacerbated the problem because families increasingly move to urban areas, far away from their traditional village and family support structures.

A lack of childcare facilities is a major stumbling block to women entering the workforce, and returning to work after having a child, in countries already suffering large gender imbalances. The absence of quality childcare often increases pressures on women to leave the workforce to care for their children, as globally women continue to perform the lion’s share of unpaid care and household work.

But childcare is not just a women’s issue. It is a family issue and a business and economic imperative. Two-thirds of men say that they are willing to work less if it meant they could spend more time with their children.

Lack of childcare and other family-friendly policies such as paid parental leave and breastfeeding support is an issue that will be showcased this Friday at a UN Global Compact summit in New York on workplaces of the future, with a key focus on the need for quality childcare options to encourage more women into the workforce to help bridge the gender gap.  

East and South Asia are as the only two regions in the world where female labor force participation rates have dropped over the past two decades and the gender gap has widened. Turning that around could make a big difference to economies in the region.

Just consider India, where women’s labor force participation has been declining. India could increase its gross domestic product (GDP) by a staggering 60 %, adding $2.9 trillion to GDP by 2025 if it could breach that gender gap.

In Sri Lanka, closing the gender gap in the workforce could help the country raise its GDP by as much as 20 % while reaching gender parity could boost the collective GDP of the Asia-Pacific region by $4.5 trillion annually by 2025.

In my travels around Asia, I have found growing awareness in the private sector of the need to offer childcare options to help hire and retain talented people and boost profits and productivity. 

Across Asia, companies have started offering childcare to keep women at work.

In Pakistan, a country where women represent only seven percent of the formal labor force, National Foods Limited, a food manufacturing company has seen a 65 percent increase in the number of women in the workforce and 117 percent rise in the number of women in management since implementing their family friendly policies such as an on-site daycare center, pick-and-drop for employees and their children, and flexible work arrangements.  

And in Sri Lanka, companies such as the law firm F. J. & G. de Saram, provide childcare as part of its recruitment and retention strategy, yielding the company a nearly 100 % maternity return rate.

 The challenge now is for all companies to act and realize the benefits for their own bottom line.

Governments too have acted. In countries like Bangladesh, Cambodia and Sri Lanka there are now laws mandating companies to provide or support childcare. New research shows that 26 out of 189 economies studied legally require employers to provide or support childcare

In Sri Lanka, the government set up a taskforce to help draft regulations and incentives for good-quality childcare services. The move had an impact: the country amended its maternal leave policies, drafted national guidelines for daycare centers, and financed the setting up of 2,000 daycare centers. 

Following IFC’s latest report showing that lack of child care was costing Fijian employers over 12 working days each year per employee, the government set up a national taskforce to identify options for childcare solutions. Fiji also included childcare in its national budget for 2019-2020, setting aside funding for consultations related to setting up of daycare centers.

Just as it takes a village to raise a child, it takes an enlightened ‘modern village’ of companies and governments to tackle childcare. Everyone has a role to play in ensuring our children, the future leaders of tomorrow, get the best start in life. Doing so creates a winning situation for children, their parents, employers and countries as a whole.