Asia must not follow West example

Posted on  08/10/2011  |  Media Centre

Saturday, October 8, 2011

“THE mobile phone has become ubiquitous and underpriced, and can be free nowadays, while the toilet has become a luxury item,” said the author of a book which warned Asia against following the West’ consumption-led growth.

Chandran Nair, of the social venture think tank Global Institute For Tomorrow and author of Consumptionomics: Asia’s Role in Reshaping Capitalism and Saving the Planet, said if global consumption keeps on growing, the results would be “catastrophic”.

Asia will shape the 21st century, but it will absolutely create a catastrophic outcome if it continues to follow the “Western narrative of consumption led-growth”, he said during last month’s Asean 100 Leadership Forum in Manila.

“Consumption-led economic growth would lead to catastrophic failure,” he said.

To avoid this, people are going to need to restrict consumption, which would mean tough rules, he said.

In the next 40 years, the Asian population would rise to 5.5 billion, he said. “The consuming classes that are consuming at the equivalent of the average American is actually about 600 million people in Asia,” he said. “With 600 million people consuming today, unless you are blind, you will notice that we have ravaged the world, we have externalised cost enormously and now are we imagining that in the next 40 years, another four billion people can consume like this and not worry that things will go absolutely haywire?”

He cited figures from the Organisation for Economic Cooperation and Development (OECD), whose members include high-income economies, showing that car ownership levels are about 750 cars per a thousand people. China, being the world’s largest car market, has 150 cars per thousand people and in India it is just 30. What would happen if Asians started buying cars, he asked.

“If China and India started to have car ownership, anything like the OECD in 2050, do you know how many cars we would have in the world? We’ll have three billion cars,” he said.

Nair said the car industries in most Asian countries are already considered “dumps”.

The notion that the world can “green” this “problem”, is in Nair’s perception, naive. “The world’s most advanced automotive industry outside of Japan is Germany, and in Germany there are 40 million cars, how many ‘green’ cars are there in Germany? Less than 5,000,” he said. Because of the rare earth metals that would be needed to produce hybrids or green cars, only the rich can afford these cars, he said.

Nair said the reason the world is going through this slowly faltering state is that for the past few centuries, the global economy has been shaped by the Western business model of consumption-led growth.

Of course, there is the argument that technology can help and that the “next big thing” will help save the world and the direction it is heading.

But is it enough? Nair believes that there has to be more than hope and a dream that technology will stop the direction that the world is currently heading.

The world needs a plan, he said. And there needs to be a strong government to come up with policies that will weigh the options for the “principles of collective welfare” rather than the “individual rights”, he said.

“This is going to be the political challenge of our time,” he said.

“We have the perception that somehow free markets will solve this problem, and we have a suggestion that finance will help solve this problem. It will not solve this problem,” he said.

Technology won’t be much help, he said, noting that in certain cases it even aided and further ravaged available resources. “Fisheries is an example, once we intervened, technology is going to help with radar and so on, so that we can further rape the oceans,” he said.

“I am not a hippie, nor am I a card-carrying member of the Chinese communist party that would be a lazy assumption to make,” Nair said.

People should realise that there are limits and that if people understand the limits, then they will have to understand that there should be equitable access to resources, he said.

In a world where the toilet has become a luxury, what is needed more is public health, education and housing.

“One in six people in Manila live in slums, this figure will climb up to three and things are going to get worse, but I am not a doomsday merchant,” he said.

“All I am saying is, look at the facts, look at where you are staying and look how the majority live, and what are we going to do about this, and therefore we need very strong governments who are not usurped by private interest,” he said.

In this day and age, there are governments which have become weak because they believe that the markets will solve the problems.

At the end of the day, Nair said that he doesn’t pretend to know all the answers as he doesn’t believe the answers are simply yes or no, but he is hoping that there will be people who would be able to look at an alternative to the free market in a resource-constrained world.

The Brunei Times

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