Content
Sustainable economic development
Economic reforms: creating enabling frameworks for development
To stimulate economic growth and fight poverty in the long term, governments must create a conducive environment. This includes providing the private sector with sufficient opportunities to unfold its entrepreneurial potential. A good business climate can strengthen local companies' investment activities and attract international capital and know-how. Other key factors include the degree of macroeconomic stability, the political, legal and regulatory frameworks that are in place, and the quality of governance.
This is why Germany, in close coordination with other donors, supports its partner countries in formulating and implementing economic reforms. In line with social and ecological market economy principles, Germany supports political initiatives that are geared to achieving the Millennium Development Goal (MDG) of halving extreme poverty by 2015.
Economic policy advice provided to partner countries aims to achieve high economic growth through the interplay between market forces and policies, with institutional backing. At the same time attention is paid to reconciling social interests and preserving the vital natural resource base. Yet economic growth - and thus the opportunity to create more jobs and income - will only be achieved if partner countries undertake considerable efforts to boost their competitiveness. They must expand their market-economy structures and institutions, face up to the challenges posed by globalisation and make use of their opportunities.
The promotional measures implemented in German development cooperation therefore cover a broad spectrum. This includes, for example, preparing and supporting reforms in the financial sector, providing advice on designing enabling frameworks for competition, establishing regulatory authorities or implementing measures to strengthen foreign trade.
One key aspect is training staff in institutions, since inefficiency and corruption constrain development. This is why it is important to establish and strengthen functioning state organs, as well as supervisory and regulatory authorities, such as economic and trade ministries, investment promotion agencies and competition authorities. These institutions guarantee that policy guidelines are implemented swiftly, comprehensively and transparently.
Information
Publications
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Social and Ecological Market Economy Principles in German Development Policy
Strategies 158
(PDF 234 KB, accessible) -
Development partnerships with the private sector
Annual report 2009
(PDF 417 KB, accessible) -
Green Economy
(PDF 1.2 MB, accessible) -
Developing markets, creating wealth, reducing poverty, taking responsibility – The private sector as a partner of development policy
BMZ Strategy Paper
(PDF 419 KB, accessible) -
Forms of Development Cooperation Involving the Private Sector
BMZ Strategy Paper
(PDF 221 KB, accessible)
