Economic Development

Current International Financial System/Economy

The world is facing unprecedented and compounding challenges on a global scale. The economic outlook is less favorable than in prior years. Slowing growth caused by inflation and rising interest rates are taking a toll on families and nation states. While the world continues to recover from the COVID-19 pandemic and related crises, the war in Ukraine has created food and energy shortages and untenable price increases. Compounding this, rich countries are making decisions to stabilize their own economies, exacerbating debt sustainability concerns in developing countries.

Development Economics

Economic development is a policy intervention aimed at improving people’s standard of living by raising incomes and life expectancies while reducing poverty and contributing to international economic activity. Programs focus on improving the conditions to create and sustain a developed economy—creating and growing markets, financial inclusion, and increasing GDP—as well as more traditional development programs that strengthen a society like basic education, governance, and agriculture.

Dedicated economic development programs are structured to meet broad economic objectives, such as employment, sustainable growth, and price stability. More specifically, programs are related to job creation, expanding businesses, market creation, and trade.

Economic development interventions are integrated with sectors that can be traditionally thought of as development—education, agriculture, health care, climate, peace and security, and democracy and governance. For example, education programs prepare people for the workforce which advances both the individual and the wider economy. Democracy and governance programs better represent the will of all citizens and foster well-functioning institutions able to deliver public services and raise revenue. Agriculture programs assist in making the best use of land, strengthening food systems, and bringing products to market. Communities with sufficient meaningful employment opportunities with access to well-functioning government institutions tend to be more peaceful. These governments can then provide services and are accountable to their citizens.

Economic development programming varies in size and scope, from small, bilateral micro loans at the community level for starting or growing small businesses to large multimillion dollar investments for regional infrastructure provided by large multilateral international financial institutions. These programs contribute to the economic capacity of a country and strengthen its ability to compete in and contribute to the global marketplace.