Economic Growth and Trade
Almost two-thirds of the world’s population lives on less than
$2 per day. Families are hard-pressed, at this level of income, to meet
their daily needs for food and shelter. They find it difficult to provide
education for their children, build up savings for a rainy day, or improve
their standard of living by making more investments in a business that
can generate larger income flows.
 |
Rural markets provide income
to family
operated microenterprises |
These families live in low income countries with an average per capita
gross national income (GNI) of less than $745 per year or
lower middle
income countries with a per capita income of less than $2,975
per year. USAID partners with
these countries to support their efforts to improve the levels
of income their citizens enjoy. Governments are responsible for adopting
policies that provide a good environment for business that creates
jobs and establish needed organizations and institutions of governance,
such as courts,
banks and telecommunications regulators. Governments also
make specific investments in public services such as education, health,
and transport
systems using taxes collected on trade and incomes. Private
entrepreneurs and investors, if provided appropriate incentives, security
and access
to markets, use their ideas, knowledge, and capital to establish
companies that produce a wide variety of goods and services. In developing
countries,
many of the businesses are very small
microenterprises that
employ fewer than ten people.
Trading opportunities permit business enterprises to specialize in various
products and services. The process of exchanging products and services
through market operations, or trade, generates more wealth than would
be otherwise created if companies were less specialized. Companies generally
seek to build their businesses on the basis of some local advantage – oil,
gold, land that can be used to produce crops, factories that make use
of the labor that large urban populations provide, and so forth. USAID
experience has shown that countries can boost the ability of the companies
located in their territory to compete more effectively in trade if they
pay attention to their policies and organizations
of governance, the
health and education of the workers, and the establishment of infrastructure
such as modern energy systems, roads, airports, and seaports that enable
goods to be produced and moved quickly and efficiently. Information about
markets is increasingly understood to be an important element of efficient
trade. Telecommunications and internet
facilities are critical to trade.
USAID economic growth and trade programs provide support both to government
and private sector partners. Economic growth and trade programs are closely
integrated with other programs that support democracy
and governance,
sound management of the environment, increased agricultural output, and,
of course, education and health
Back to Top ^
|
