Promoting economic growth is one of the basic aims of Sweden’s development aid. All of Sida’s efforts contribute in various ways towards laying the foundations for economic growth that benefits the poor: aid is used in legislation, administration, environmental work, health care, infrastructure, establishing democracy and working on sustainable development. Our direct efforts are aimed at promoting trade, creating a better regulatory framework, reducing bureaucracy, providing conditions for loans and creating security for farmers, business people and employees. Through this, we are contributing towards the creation of better conditions for trade and industry as a whole, as well as for farming and forestry in the countries with which Sweden co-operates.
In the long term, this also helps to raise countries’ tax revenues, meaning that more money can be spent on health care, infrastructure and education, which in turn benefits companies and reduces poverty. This creates a positive trend. Sida is working to ensure that more countries take part in this process.
A new policy for economic growth within Sweden’s development co-operation was adopted in February 2010. The overall aim of the policy is to improve the conditions for sustainable growth processes in poor developing countries. As part of the policy, the Swedish government has identified three focus areas that are particularly important for promoting economic growth in Sweden’s partner countries:
• improving the conditions for poor people to participate in growth processes
• improving the conditions for developing markets and entrepreneurship
• improving adaptability to changes, threats and opportunities
The growth policy work has been based on data that Sida produced in September 2008. This data is in tune with the guidelines from the Organisation for Economic Co-operation and Development (OECD)/Development Co-operation Directorate – Development Assistance Committee (DCD-DAC) on Promoting Pro-Poor Growth.
This policy is not about choosing between economic growth and combating poverty. On the contrary, it is about growth and poverty alleviation going hand in hand. Combating poverty is not possible without long-term sustainable growth, and such growth does not come about without the poor benefiting from and contributing towards it. This is also the perspective that is given in Sida’s policy data, the OECD/DCD-DAC guidelines and the Swedish government’s policy documents.
Sida’s efforts within the area of growth have so far been guided by Policy Guidelines for Sida’s Support to Private Sector Development, a document that will be updated based on the Swedish government’s new growth policy. (See “Related info”.)
Sida is making direct efforts to promote economic growth in the following areas:
• Private Sector
• Trade
• Financial systems
• Labour market and employment
• Farming
• Forestry
• Fishing
• Management of natural resources.
These efforts often cover several areas because the borders between them are rarely clear.
