For decades, Western ideals have been the accepted norms in all facets of society in Asia, be it legal institutions, economic strategies or developmental goals. Even the desires and goals of people are affected by Western influences and lifestyles.
But much of this must change, says Chandran Nair, Founder and Chief Executive of the Global Institute For Tomorrow (GIFT), an independent think tank that provides executive education with an Asian perspective on global affairs. He argues that Western economic development models are intertwined with promoting ceaseless consumption to maintain the growth engine. With the rest of the world, especially Asia, getting wealthier, global consumption is increasing at a rate that cannot be sustained given the planet’s limited resources. The result will be catastrophic outcomes across the world.
“It’s a case of voodoo economics. People are urged to buy things they do not need with money they do not have,” he said. “With Asian countries like Chinaand Indiagetting wealthier, people are being led to believe they can have the lifestyles taken for granted in the West. But can you imagine the environmental consequences if everyone in Chinaand Indiahad a car or ate as much meat as the average American? People need to realize that they cannot have everything that they want and an economic model which denies this fact is unsustainable.”
A Think and Do Tank
Nair’s warnings about Asia adopting traditional forms of capitalism is due to his belief that the economic model, by under-pricing resources and externalizing true costs in order to promote relentless consumption, has widened inequalities across the globe. He also believes that capitalism today grants the private sector a considerable amount of autonomy and power under the concept of an invisible hand, where governments are encouraged to allow market forces to create prosperity and manage the necessary checks and balances. But Nair argues that this is a naive view which goes against all the historical evidence suggesting vested interests will co-opt such systems for their own ends.
He reasons that such models invariably benefit companies disproportionally, not the consumer or the environment. He urges policy makers and business leaders to take up a new resource-centric development model, which he calls “constrained capitalism.” His ideas were outlined in his book, “Consumptionomics: Asia’s role in reshaping capitalism and saving the planet.”
“It is a combination of various experiences and thoughts that I developed during my travels and business dealings, including when I was Chairman of Environmental Resources Management, an environmental consulting firm,” he explained.
Constrained capitalism calls for proper pricing of resources to reflect their true cost, which would lead to reduced stress on the resource base – or as Nair puts it, a reversal of the under pricing that is currently used to promote growth – and ultimately, reduced consumption. What makes Nair’s argument so compelling and controversial is his directness. He boldly states that because of the size of Asia’s population, its citizens cannot enjoy the same consumption-led lifestyles enjoyed as in the West, and that strict systems must be imposed to manage resources in line with the constraints to create a more equitable prosperity for the majority in the region.
“If people in Asia were to consume less as the region develops, the chances of maintaining the integrity of the resource base increases and protecting social nets increases, and since inequalities will be reduced, fewer conflicts will arise,” he said.
GIFT receives no funding from external sources, which enables it to be completely honest and intellectually robust with clients – which is not always the case in the world of think-tanks or consultancies.
He explains, “Most consultancy firms and think tanks are closely linked to, if not subsets, of large companies or interest groups. So they have constraints and are unable to be intellectually honest.”
Another major difference between GIFT and other think tanks is that it provides leadership courses for clients to experience real-world scenarios and participate in them. These courses, held in various countries in the region, require participants to deconstruct conventional wisdom, experience working in a new environment for a week with a host/partner business before drafting a plan for that business which will help it move to the next level. Nair is confident that both sides benefit from these programmes. Participants gain a whole new perspective and take away fresh and challenging insights, while host businesses gain a pro bono strategy for sustainable expansion.
The jury is still out on Nair’s views on constrained capitalism for the region. Despite the fact that we know the current consumer-led economic growth model is unsustainable, we live in hope that technology will save us. Nair is less optimistic: “The idea that some genius in Silicon Valley or Bangalorewill save the world with another ‘innovation’ simply will not happen.”
Is he the voice of reason calling for a new, successful development model? Or a radical who is simply swimming against the tide?
“I’ve had people, influential businessmen and politicians, even academics, come up to me and agree with me on my message. This is because the evidence is there for all to see. However, when I suggest that they try and spread the message, they simply cannot as in many ways they are institutionally handcuffed,” he said.
GIFT is looking to spread its message on new horizons, having launched new programmes in the Mainland and Myanmar. But despite being based in Hong Kong, it has never launched a programme here, which is something that Nair says he plans to change.
“We need big business, government and civil society in Hong Kongto come to terms with the reality of the 21st century and transition from the last century’s ideas. Sadly, too many are entrenched in Western concepts and philosophies about growth and prosperity and are not that open to new ideas. We hope to engage them in a discussion about the role of business in society, different kinds of business models and the role of the state,” he said.
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