Market Systems Development – analysis and design

The aim of this Development Economics Brief is to take a closer look at remittances, with a focus on inflow of remittances to Sida partner countries. It introduces key concepts, overall trends, explores links to poverty reduction, presents and analyses data from relevant geographical contexts, and finally concludes on some of the main challenges, possible ways forward and the potential role of development cooperation. This can inform Sida’s and other development organsiations work with remittances, as one of the most important, and perhaps less explored, financial flows for poverty reduction.

Employment, private sector development and trade are powerful and interdependent drivers for inclusive economic development and poverty reduction. Small and medium-sized enterprises generate over half of all jobs globally and play an important role in low-income countries. Employment is the main source of income for people living in poverty. Trade is an engine for growth and can lead to more and better jobs. Businesses also provide markets and people with essential goods and services. Inclusive, equal education and lifelong learning decreases poverty and secures individuals’ income generating possibilities. However, several factors constrain people living in poverty from accessing markets, participating in the labour market and benefiting from trade and growth. Sida contributes to inclusive economic development and education where people living in poverty can participate and benefit on equal terms. In total, Sida’s interventions in this area amounted to SEK 4.2 billion in 2025, constituting nearly 19 per cent of Sida’s total disbursements.