Oct. 30 (Bloomberg) -- Following the money often gets you to the bottom of a story. Following the economic experience of women may offer more insights.

Females make up half of the globe’s population, and prosperity and competitiveness are contingent upon achieving gender equality. Here, the World Economic Forum’s latest Global Gender Gap Index offers timely and telling insights into growth trajectories near and far.

Take Iceland. OK, so you can’t get a Big Mac there. McDonald’s Corp. is giving up on the place, succumbing to the collapse of the krona and eroding profits. Icelandic women, though, lead in equality. The economy was exposed as a huge house of cards. Yet its success in giving its entire labor force a fair shake may make Iceland a long-term buy.

Asia is especially fertile ground for tracking gender dynamics, and dishearteningly so. Far more Asian nations slipped than gained in 2009. It means the global crisis set back efforts to narrow the male-female gap in economic and political power. If you are an investor who thinks this is a social issue far removed from your portfolio, think again.

There’s no dumber economic policy than tying one hand behind your back, and it’s a key reason Asia underperforms. Drawing from a smaller -- and weaker -- labor pool stunts any country’s growth and corporate management.

This structural impediment to growth is as silly as it is damaging. Asia will regret its failure to address it.

Gender Index

It will shock no one that Yemen came in last out of 134 economies surveyed. Few will be caught off guard that Nordic countries dominate the top rankings.

It may surprise women in New York, London and Tokyo to learn that their counterparts in Manila, Colombo and Ulan Bator are faring better. They are doing so based on the WEF’s four criteria: economic participation and opportunity, educational attainment, political empowerment, and health and survival.

Several key Asian nations slipped by three or more places in 2009. While the Philippines is still in the top 10, it fell three levels. Sri Lanka, the only other Asian country in the top 20, fell four. The moral of both stories: Shipping women abroad to get better-paying jobs and send money home has more downsides than usual during a global crisis.

Empowering the Masses

Thailand fell five places to 59, putting it behind Uzbekistan. It’s a sobering reminder that 12 years after the Asian crisis, Southeast Asia’s second-biggest economy focuses too much on headline gross domestic product figures, not enough on empowering the masses. And it’s a steady slide; two years ago, Thailand was in the top 50.

Malaysia slid three spots to 101, showing that efforts to create a multiethnic society don’t necessarily apply to gender. South Korea fell three places, coming in at a shameful 115th -- behind Jordan and the United Arab Emirates.

For all the good news on South Korea, sexism is a blemish. Not fully utilizing your labor force is a recipe for sub-par growth and wealth creation in the long run. The home of the “Korea discount” in stocks should stop discounting its women.

China and Vietnam both fell one rung in 2009, to 60 and 71, respectively. Singapore rose one.

There were notable successes. Japan jumped an impressive 25 places to 75, while Mongolia rose 18 rankings to 22. Yet even here, things aren’t all they seem.

Not So Fast

Japan got a big boost from an Aug. 30 election in which a record 54 women won parliamentary seats. Too bad the opposite is true of the private sector. None of the 225 companies that comprise the Nikkei stock index has a female chief executive.

Mongolia’s strides are to be applauded. It’s rare for a nation to get the importance of this issue at such an early phase of globalizing its economy. It ranks ahead of the U.S. and Canada. The problem is a lack of female involvement in politics. It’s something Mongolia needs to watch if it’s going to reach its potential.

Indonesia gained two notches and would have risen more if some countries clustered around it hadn’t turned in better scores. India advanced three places amid improvements in political empowerment. It still performed poorly in the economic, education and health sub-indexes. In other words, Indonesia is evolving economically, India perhaps less so.

It may seem an odd time to explore this root cause of Asia’s underperformance. Markets are booming as the region emerges from the global crisis ahead of the West. Equity indexes are up more than 40 percent this year in China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.

That’s what happens when policy makers open the monetary and fiscal floodgates during financial turmoil. Once interest rates go back up and government stimulus wanes, economies will need to stand on the quality of their fundamentals. Growth rates will disappoint.

Gender inequality is a clear crack in Asia’s veneer of invulnerability, and it’s a stupid one.

(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net

Last Updated: October 29, 2009 16:00 EDT