THE CHARACTERISTICS OF THE FOUR SCENARIOS

THE MARKET FORCES SCENARIO

The Market Forces scenario is defined in terms of prevailing economic growth paradigms based on the experience of the developed countries, mostly of Europe and America, and it is premised on the belief that this model of development is appropriate for the rest of the world, or that it is the ultimate model that the whole world would rely on, or adopt for development. Central to the thinking of this paradigm is the existence of the invisible hand of market mechanisms, which control the allocation of resources and the distribution of the benefits of growth. Essentially, the operation of market mechanisms means the economy is increasingly privatized and that there is a gradual withdrawal of government as principal actor in the development process. Thus, in this scenario, the government provides the enabling environment for economic growth while the private sector is the impetus for this growth. Consequently, opportunities are defined by market mechanisms with no significant intervention from government. The private sector maximizes profits, always seeking out sub-regions with the cheapest labour to produce high-value or brand products. People’s search for satisfaction is based on increased acquisition and therefore consumerism becomes the socially defining value. The world economic system responds by increasing production of goods and services with increased burdens placed on natural resources.

Opportunities are defined by market mechanisms with no significant intervention from government.

Under the Market Forces scenario, barriers to trade between countries and regions continue to break down, especially as a result of globalization and because countries agree to unhindered flow of trade and resources, including financial resources. The economic environment becomes very conducive to research and development (R&D) initiatives. People do their best to maximize the benefits of economic freedom and motivation arises from this. Motivated by the benefits of economic freedom, people exercise their utmost efforts to maximize their profits. All these factors continue to stimulate economic growth through greater and more efficient use of available opportunities and resources. The operation of the principle of comparative advantage becomes important in the organization of economic activities between and within countries.

As a result of the increasing trade between nations as well as the removal of obstacles to the flow of ideas, information, labour and capital within a context of the efficient use of resources, the need arises for the emergence of new institutions to manage the new economic order and the emerging political arrangement. New economic and political groupings, such as the existing African Union (AU), Arab Maghreb Union (AMU), COMESA, Economic Commission for Africa (ECA), Economic Community of Central African States (ECCAS), Economic Community of West African States (ECOWAS), Indian Ocean Community (IOC) and SADC emerge and indeed become more fashionable and imperative. The new groupings share more characteristics, becoming economic and financial groupings in addition to being political associations. Democracy becomes the accepted form of governance in more countries and the involvement of civil society organizations (CSOs) and community groups increases people’s participation. In this way, the dividends of democracy become internalized into the development process.