subcontracting, could be exploited to supplement current approaches of development
in the South.
From a corporate perspective two groups of factors impact on sustainable
development. Making markets work for all is one of the key principles in the creation
of wealth and life improvement. Well-structured, open, and competitive markets that
take cognisance of inequities, inaccessiblilities, and injustices are still one of the best
ways of advancing economically lagging communities. The correlation between
national scores on the Index of Economic Freedom and the Human Development
Index clearly shows that governments that try to fulfil the role of the private sector
keep their citizens poor (Holliday, et al., 2002). One sure way of prolonging
inequities globally is by maintaining protectionist policies, especially in the North. At
the same time, liberated and unobstructed markets do not guarantee accessibility to
all. To make it work for all, especially in the South, lagging groups should be allowed
easier access than before. Equitable markets create wealth, increase competition,
foster innovation, create creativity and ultimately improve people’s quality of life.
Creating streamlined, equitable and accessible markets is the responsibility of both the
private and the public sector.
Second, the financial and political regimes of developing economies are equally
important in creating a sound economic environment in which business can prosper
because FDI tends to flow to areas where investments are safe, where labour is
productive, and where trade-distortions and financial obstacles are the least. The
marginal South does not have a particularly good record in this regard. However,
more FDI is also not a short-term solution because foreign investment has a long-term
horizon and is often of the kind that is unlikely to provide sufficient employment to
the unskilled and semiskilled masses in the cities to radically change conditions for
them. Creating a business environment that will accommodate the entire labour force
of the South remains a challenge. This implies that the urban South will have to learn
to live with an economic dichotomy, i.e. a formal sector that normally does not
sufficiently provide employment to a large component of the lowly skilled members
of the labour force, and the informal sector that seems to be the only viable option for
a large percentage of the latter. Reducing the gap between the formal and informal
sectors and building partnerships between the two sectors in order to increase the
ability of the urban populations of the South to improve their living standard, should
be strived for all the time.
Building new market structures in the urban South
One of the reasons why the urban South is struggling socially and economically is
because there are much more inappropriately qualified people living in the cities than
their formal economies can carry. Providing employment to large numbers of people
who cannot compete for jobs in the informal sector becomes a constant struggle. To
put the scale of the problem in context, roughly one million jobs have to be created to
keep pace with rising urban populations in Central Latin America alone. In
comparison, two million jobs were created in the United States per annum as long ago
as the 1970s, and that in an economy 15 time greater than the combined economies of
the region at the time (Fox, 1984).
As was said before, creating a new Southern blend of market economy may offer
new hope. In countries with long traditions of informal urban activities, smaller
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