Government of Canada

Foreign Affairs, Trade and Development Canada

Stimulating Sustainable Economic Growth - FAQs

Table of Contents

What is sustainable economic growth?

Sustainable economic growth means an increase over time in the output of an economy that integrates economic, social, and environmental considerations and that is supported by efficient institutions and sound policies. This growth must also enable the poor to participate in economic opportunities and enjoy its benefits.

What are CIDA's three priority themes?

Through its aid effectiveness agenda, the Government of Canada is committed to delivering development assistance that is more effective, more focused, and more accountable to Canadians.

As part of making Canada's aid more effective, CIDA has identified three priority themes under which to will organize its programming:

These priority themes are supported by the integration of three crosscutting themes:

These crosscutting themes are critical to the implementation of the priority themes.

What are the elements of the Sustainable Economic Growth Strategy?

The Sustainable Economic Growth Strategy includes support for three policy and programming areas, referred to as paths:

  • Building economic foundations
  • Growing businesses
  • Investing in people

These three paths will assist in providing developing countries with the necessary tools to achieving long-term, sustainable economic growth.

Why has CIDA made sustainable economic growth a priority?

Extreme poverty declines faster and more sustainably in those countries that create and maintain robust growth. The Sustainable Economic Growth Strategy will support governments in building the framework for sustainable growth to take place, in enhancing the productivity and competitiveness of private sector enterprises, and in better equipping people to take advantage of economic opportunities.

How does economic growth reduce poverty?

A dynamic, growing economy will create jobs and higher incomes, particularly for the poor. Economic growth, in turn, generates the financial resources governments of developing countries need to invest in the well-being of their citizens. Overall, the Sustainable Economic Growth Strategy seeks to help developing countries create the long-term, sustainable economic growth that will raise the income levels of the poor.

How does sustainable economic growth relate to the food security and children and youth strategies?

The Sustainable Economic Growth Strategy complements and builds on the food security and children and youth strategies. Agriculture is a significant generator of jobs and income in many developing countries, and improvements in food security through agricultural productivity and innovation can drive growth. Similarly, improved health and education outcomes for future generations are vital to the human capital necessary for sustainable economic growth.

What opportunities and challenges drive sustainable economic growth?

  • Effective policies and institutions:
    • Reduce vulnerability, support the sustainability of economic achievements, and fight corruption
  • Infrastructure:
    • Supports market access and increases productivity and competitiveness
  • A skilled workforce:
    • Workers, especially women, can seize opportunities and reduce their own poverty
  • Agriculture:
    • Generates employment and increases productivity and innovation
  • Environmental management:
    • Maintains the long-term viability of economic growth

What are the essential elements needed to achieve high levels of sustainable economic growth?

  • Accountable governments: A government that is willing to adopt effective and transparent public management of the economy, providing a safe, stable, and attractive business and industry environment, which will ultimately strengthen its ability to fulfill its responsibility for the welfare of the people
  • Open and effective markets: A business environment that stimulates entrepreneurship, is open to competition and market expansion, imports outside knowledge, and maximizes investment opportunities
  • Infrastructure: A developed and maintained infrastructure, including transportation and communication systems, that enables access into and between marketplaces
  • Capable human capital: A diverse, skilled, and qualified workforce that meets the demands of the economy
  • Equality of opportunity: A social and economic environment that upholds equality of opportunity for both women and men
  • Sound environmental management: Sustainable and responsible management of natural resources and appropriate responses to climate impacts that enable the long-term viability of the economy

What does this mean in practical terms? What are the projects going to achieve?

Through the Sustainable Economic Growth Strategy, CIDA will focus its main targeted investments to help developing countries foster sustainable growth in their economies and provide opportunities to their citizens. Some of these investments include:

  • Building economic foundations by helping to:
    • Strengthen public financial and economic management capacity and institutions at the local, regional, and national levels
    • Improve legal and regulatory frameworks and systems and their implementation, all of which are key to stable national and local economies
    • Support governments, businesses, and industries in widening their business base and integration into regional and global markets
    • Build national and local capacities in managing natural resources and the environment in a sustainable and socially responsible way to support economic growth
  • Growing businesses by helping to:
    • Strengthen support for the development and growth of micro, small, and medium-sized private-sector businesses, with a special emphasis on women
    • Increase the productivity and sustainability of businesses, based on realistic market potential to fill value chain gaps, which will result in increased long-term formal employment opportunities for the poor
    • Strengthen and increase the availability of financial institutional products and services, including microfinance, which will result in greater job creation for the poor
  • Investing in people by helping to:
    • Increase access to essential, demand-driven skills training and knowledge needed for formal labour market participation, including literacy and numeracy
    • Increase availability of appropriate, meaningful, and structured workplace learning opportunities, including in the agricultural sector
    • Support relevant, results-based learning initiatives, which will stimulate business growth, market expansion, and productivity