Economic development encompasses many factors, including production,
finance and the distribution of resources both between regions and across
sectors of society. Although the pattern varies conspicuously, there has
been a general trend towards more servicebased economies. Product, financial
and even labour markets are becoming increasingly integrated and interconnected
in a worldwide economy with global commodity chains and financial markets.
Similar trends are appearing at a regional level in several parts of the
globe. These processes have been spurred on by advances in information
technology, international pacts designed to remove trade barriers or liberalize
investment flows and the progressive deregulation of national economies.
The same advances have also allowed wealth produced by national and transnational
mergers to become concentrated in fewer and fewer hands. There has also
been an increase in inequality in terms of income and resource use across
- and often within - nations. For many nations the problem of inequality
is made worse by debt burdens that seriously constrain growth. As transnational
enterprises respond to global business opportunities, the traditional
prerogatives of the nation-state and the capacity for macro-economic intervention
by the state are challenged anew.
|'For many nations the problem of inequality is made worse by
debt burdens that seriously constrain growth.'
In Markets First, it is assumed that most of the trends noted
above persist, if not accelerate. Economic development outweighs social
and environmental concerns in most international discussions. Resistance
continues but no radical changes in policy result. Recognition that maintenance
of environmental and social conditions is important for ensuring economic
development slows economic growth down over time, but not very noticeably.
In Security First, trends towards global integration continue
for some parts of the economy, yet come to a halt or even go into reverse
for others. Over time, more and more activity takes place in the grey
or underground economy.
Integration trends persist in Policy First and Sustainability
First but they are tempered by the introduction of new policies and
institutions to tackle social and environmental concerns. This reflects
improved understanding of the crucial roles of human, social and natural
capital in determining economic health. Changes in attitudes and behaviour
in Sustainability First affect these trends more than in the other
scenarios as the whole notion of economic development becomes increasingly
subsumed in the broader concept of human development.
The effect of these changes on per capita income varies strongly across
regions and scenarios. Average income growth in all regions is lowest
in Security First but also very unevenly distributed due to the
greater inequality within regions. In the other scenarios, average growth
at the global level is similar but there are key differences between and
within regions. In Policy First, the more equable distribution
of growth makes average incomes of the wealthy grow slightly slower than
in Markets First, whereas incomes rise more rapidly among the poor.
The most dramatic increases in income growth are seen in Africa, but also
in parts of Latin America and the Caribbean, Asia and the Pacific, and
West Asia. The convergence in per capita incomes is even greater in Sustainability
First, especially as wealthier persons shift their emphasis away from
marketoriented production and consumption. However, large differences
remain at the end of the 30-year period.