What if there was hard-and-fast evidence that discriminatory laws and actions against lesbian, gay, bisexual and transgender (LGBT) individuals hurt economic prosperity in emerging markets and developing countries?
Last week, I was proud to join in the launch of a groundbreaking report published by the Williams Institute as part of USAID’s LGBT Global Development Partnership that undertakes this empirical analysis. The underlying study found that human rights and economic prosperity are intertwined and that greater inclusion of LGBT people in emerging economies, at both the micro and macro levels, is positively associated with a country’s economic development.
Across 39 emerging economies and other selected countries, the study found substantial evidence that LGBT people are limited in their freedoms in ways that also create economic hardships.
The study uses, for the first time, the Global Index on Legal Recognition of Homosexual Orientation, which establishes categories of legal recognition and protection for lesbians and gay men, as well as a provisional index on transgender rights that was created specifically for the report. The index identifies eight types of laws that indicate a country’s level of legal recognition of LGBT people. It includes legalizing consensual acts between same-sex adults, providing protections against discrimination in employment or the provision of goods and services, and legal recognition of same-sex couples or the legal ability of couples to adopt children. The index allows for a numerical value to be assigned to each country in the study based on the number of laws currently enacted that provide either basic protections or address family recognition and adoption rights.
Based on this index, the study was able to show that one additional legal right in the index is associated with approximately a $320 in per capita GDP, or about 3 percent of the average in the sample countries, and a higher human development index value. For instance, Kenya has a score of zero, as it does not provide any legal protections for LGBT people and has a per capita income of $1,318. In contrast, Argentina has a score of seven and a per capita income of $13,323.
This positive correlation is significant because it allows us to put a price tag on discrimination. Based on the models and anecdotal evidence, we can see that countries that discriminate against LGBT people are pushing entire groups of people out of the formal economy and reducing the economic gains they would otherwise enjoy if they were allowed to be productive members of society.
So what does this mean for development and the LGBT community?
This research has potentially powerful ramifications for the way USAID works, for the donor community, for business leaders, for policymakers in emerging markets, and even for the U.S. taxpayer and legislators.
By linking stigma and discrimination against LGBT individuals to a country’s economic well-being, the issue of bigotry is not just felt and understood by those who are LGBT, but by anyone who cares about that country’s economic growth.
In April, Marco Andrés Jaramillo—an entrepreneur and CEO of EgoCity, an online and print magazine in Medellín, Colombia—joined 60 LGBT Colombians for #ActivatingLGBT, an entrepreneur training hosted by USAID partner, the National Gay & Lesbian Chamber of Commerce of the United States, and the Colombian LGBT Chamber of Commerce.
The training, held in Barranquilla, coached innovative LGBT entrepreneurs on how to create and sustain economically viable businesses, conduct trade with international partners, and make use of inclusive procurement policies. With new skills and connections, his business is booming.
Today, Jaramillo is turning his business from a small, niche magazine focused on his local community into one serving major multinational clients throughout Latin America and Europe. In the past year alone, business has grown by roughly a quarter.
Entrepreneurs like Jaramillo are engines of growth for their communities, countries and continents. Far too often, LGBT individuals around the world are excluded from contributing to their economy because of who they are. The fact is simple: Economic growth depends on a healthy, inclusive workforce, and people can’t work if they are routinely excluded from schools, jobs and health care or subject to other harms such as violence and police abuse.