Empowering Women Entrepreneurs: The Impact of the 2006 Trade Organizations Ordinance in Pakistan

Overcoming Legal Barriers to Women's Economic Participation

The World Economic Forum’s Global Gender Gap Report measures the magnitude and scope of gender-based disparities among countries in four key categories: economic participation and opportunity, educational attainment, health and survival, and political empowerment. In 2010, Pakistan ranked 132 out of the 134 countries evaluated, and scored 133rd – lower than Saudi Arabia and ahead only of Yemen – in terms of economic participation and opportunities for women.

This jarring gender participation gap is also evident in national statistics. Women account for 52 percent of Pakistan’s population, yet only 3 percent of them are involved in economic activities in the formal sector, according to the Federal Bureau of Statistics. Apart from factors such as the acute dearth of knowledge and business education among women and cultural norms that make it difficult for women to work outside their homes, one important reason for women’s absence in economic activities had been the lack of women’s business networks and chambers of commerce. Many chambers of commerce exist in Pakistan; however, their membership is predominantly male. Until 2006 there was no legal way for women entrepreneurs to form their own chambers that would be uniquely suited and responsive to their needs.

Prior to 2006, the 1961 Trade Organizations Ordinance (No. XLV of 1961), amended in 1997 (No.5 (2/97-TO-I)), governed the formation and operation of chambers of commerce and business associations in Pakistan. This outdated law did not correspond to the modern business environment and did not reflect the true voice of entrepreneurs in the country. In late 2005, the Center for International Private Enterprise’s (CIPE) Pakistan office began a dialogue with the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Ministry of Commerce in order to reform this law.

In April 2006, the Ministry of Commerce created a six-member committee to review the 1961 Trade Ordinance and recommend changes through a consultative process. The Ministry invited CIPE Pakistan to fill one of the positions on this committee and advise on best practices and various international business association models. On CIPE’s recommendation, the six committee members traveled across Pakistan and, over a period of eight months, met with more than 150 representatives from various chambers and sectoral associations. Based on the input from these stakeholders, the committee drafted legislation that they presented to the Minister of Commerce on November 15, 2006.

After adding a few amendments, the new Trade Organizations Ordinance was promulgated by the President of Pakistan on December 31, 2006 and publicly issued on June 5, 2007. This law enhanced freedom of association and created new self-governance mechanisms for chambers and associations. It also requires a transparent election process and the appointment and development of professional management within all trade bodies in Pakistan. This legislative change had a significant impact on 152 business associations with more than 350,000 members by allowing them to obtain licenses from the Ministry of Commerce. Revisions to the voting rights and re-registration requirements also eliminated more than 30 defunct chambers.

Crucially for women entrepreneurs, the 2006 Trade Ordinance also compelled all regional chambers to induct women members onto their boards and allowed for the creation of women’s chambers of commerce. There are now 60 female board members in regional chambers and eight women’s chambers have been registered, including some in conservative areas such as Mardan, Peshawar, and Quetta, areas generally regarded as challenging for women’s rights.

Anna Nadgrodkiewicz is a Program Officer for Global Programs at CIPE, where she works on projects involving democratic and market-oriented reform around the world. Prior to joining CIPE, she worked as a business consultant in her native Poland on the issues of competitiveness and market entry in Central and Eastern Europe. She holds a Master’s degree in German and European Studies from Georgetown University in Washington, DC.

The views expressed by the author are her own and do not necessarily represent the views of the Center for International Private Enterprise (CIPE). CIPE grants permission to reprint, translate, and/or publish original articles from its Economic Reform Feature Service provided that (1) proper attribution is given to the original author and to CIPE and (2) CIPE is notified where the article is placed and a copy is provided to CIPE’s Washington office.

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