The market for development

Markets need some very strong prerequisites to function well and be a self regulating system. Creating markets, where the most basic institutional factors necessary for the functioning of a market is nonexistent, is futile. In other words, talking about private sector development where markets do not even exist is meaningless. Our proposal is based on the idea that we first need to create a platform which can act like a spring board for private sector development. Such a platform is provided by the creation of a Market for Development (MFD). The MFD takes a ramshackle economy by its collar and purges it of all its rigidities, thus providing the scaffolding on the strength of which an all pervasive process of private sector development can take place. The creation of a MFD is thus an integral step for private sector development through which we hope to infuse the process of transforming lives. The process of private sector development can be broken down into two stages, the ‘formative stage’ and the ‘self perpetuating’ stage. Nearly all research into private sector development concentrates on the second stage in which the preconditions for the proper functioning of a market are already assumed to have taken place and research tells us what innovations are necessary for the successful functioning of those markets. However, a valid point can be raised here. Are the preconditions that are required for a market to function so easy to come by? We do not think so. The difficult part in the process of sustainable development is setting up the preconditions for proper functioning of a market. This is more fundamental than the second stage and our idea particularly addresses this issue.