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Poverty reduction requires more than just economic growth. But the latter is an essential factor for the private sector to create jobs and additional income which will benefit the poor. Respective strategies towards broad-based growth need to strengthen micro, small and medium enterprises (MSMEs). These ventures account for the majority of economic activities in developing countries and provide significant employment opportunities. However, MSMEs often face growth constraints due to their size and capacities. Such limitations need to be addressed to strengthen the enterprises’ economic potential and competitiveness, and to enhance their access to dynamic markets.

Regional Economic Integration (REI) has the potential to boost the economic welfare of countries and a region as a whole. It creates larger markets and new trading opportunities while increased competition lowers prices for consumers. Aside from economic impacts, REI also has a political dimension. It tends to have a positive effect on security and stability in a region, on the bargaining power of participating states in international negotiations, and on financial cooperation in regional projects. However, not all countries benefit equally from regional integration. Less developed states tend to face high adaptation costs when REI is targeted in developing regions. Compensatory policies and mechanisms are therefore crucial in promoting even regional economic development.

Decentralization is not an end in itself but rather a necessary reform safeguarding the delivery of public services that match local citizens’ needs and increasing empowerment and participation in local political processes. In the course of democratic reforms in developing countries since the early and mid 1990s, decentralization policies have become a cornerstone of political and administrative reforms.b

There are good reasons for promoting democracy. Democratic states have proven successful in building stable societies with competitive economies and functioning public service systems. Compared to autocratic states, democratic systems are less prone to conflict. Support for young democracies has been high on the agenda of international partners since the 1990s, when a wave of democratizations swept the globe. In the beginning the focus lay primarily on supporting the establishment of democratic structures. Democratic constitutions granting civic and human rights, systems of regular elections, and even participatory dialogue mechanisms in policymaking have been created in numerous countries all over the world.