Chandran Nair: Stronger states needed in Asia to limit consumerism and ensure basic needs are met

Chandran Nair is the Founder of Global Institute for Tomorrow, an independent Hong Kong based think tank that aims to provide a perspective of sustainability that is relevant for the Asian context. He’s well known for his strong views on the role of the state in the process of bringing about sustainable development in the region.

Bhavani Prakash of Green Collar Asia caught up with him after his discussion at the recent Singapore Human Capital Summit, 2013. 

Chandran Nair

GCA: What’s the mission of Global Institute for Tomorrow?

Chandran Nair: What I’m aiming to do with Global Institute for Tomorrow (GIFT)  is to dismantle the western ideological narrative.  Sometimes people jump into the conclusion that I’m simply being lazy in my thinking, and am anti-western and divisive, but that’s not true.

I sit on the Global Agenda Council of the World Economic Forum, and I’ve said some tough things. Since the financial crisis, it hasn’t been too difficult to point out the absurdity of the world we live in, and that the western capitalistic system is crumbling. In saying that, it’s not anti-western sentiment that I’m expressing, but an appeal to Asians to wake up from their deep sleep. I’m challenging business and political leaders here in Asia to come up with their own narrative.

GCA:  Why does Asian consumption worry you so much?  You’ve even written a book about it called, ‘Consumptionomics:  Asia’s Role in Reshaping Capitalism and Saving the Planet.’

Chandran Nair:  It’s simply the fact that there are too many Asians, and not enough resources to live the lie that we can live the American dream. The American dream is born of exceptionalism and the exorbitant privilege of the dollar. The fear in the west is that ‘My God, those Asians are all becoming rich’ but you know and I know that as soon as you leave the centres of Asian capitals, there are hundreds of millions of people without basic human rights of water and sanitation.  There are 400 million Indians who have no electricity when the sun goes down.

The suggestion that we can throw in the western economic model which is extractive and underpriced, and promote the view that we can somehow make the pie bigger – it’s a lie and is not possible.  So the Asians can’t have it all, and we just need to get used to the idea. The problem is that it’s very difficult for a western economist and the Jeffrey Sachs of the world to go around saying, ‘Hey guys, you can’t have it all, and neither can you Africans.’  Having occupied the higher moral ground and the privilege, they have to say, ‘You can be like us, it would be so easy if we give you a bit more money.’  The west is bankrupt, so what money?

The mock on economic model doesn’t work, and you can’t solve this problem through philanthropy, so Asian consumption has to be of a different form.  There are going to be 10 billion of us in 2050 and this is no utopia. The way to manage the transition would be to minimise the risk of the majority being disenfranchised into a very bleak future, which will then create huge social unrest.

Thirty years ago a poor person from Uttar Pradesh in India wouldn’t have known what you and I had, but now because there is this lovely thing called the internet, they can see Britney Spears without her clothes on and that’s supposed to be progress. But they can’t have it, because it’s not possible. They’ve been told they can because they’ve got the mobile phone which of course is underpriced. How did the mobile phone become free and the toilet a luxury item?

I’m basically trying to ask the policy makers to understand that if you follow the business school models of the west, you will create disastrous outcomes. Your very legitimacy will be under threat because people won’t stand it when they’ve been lied to.  What we need to say is that the majority of the people, and 1 in 3 will live in slums by 2050, will need the most basic necessities, which includes sanitation and food security.

If you want to promote consumption for economic growth, it’s not about diverting resources away from basic needs such as healthcare, education, local housing and so on. You price them and make them the central tenets of the economic model rather than saying, ‘If we bring in supermarkets, somehow everything will be okay.’

GCA:  Your central thesis is that governments have to set the rules, but if governments even simply did their jobs well, we wouldn’t have these fundamental problems. Isn’t it an uphill task for governments to set and implement rules, given their constraints of budget, short-term political considerations, lack of governance and so on? Except for a few exceptions, do we find the moral, economic and political strength in governments of Asia to rise up to the task?

Chandran Nair:  I’d say that’s an exaggeration.  Governments in some parts of the world have failed, but eventually without governments we would have chaos.  So there is a tendency to blame governments, and there are many weak governments which have not done well enough, but imagine what would happen in the absence of governments.  Absolute chaos.  My point is simply this. In the post colonial era, our leaders said ‘we want you out but we still want to be like you’ and then went to the same schools, and followed the same economic models.

Many of the failures we see is because of following wrong economic models, but of course it’s also a failure of competence, and I’m not denying that. My argument is that governments have to rule, and to imagine that somehow multinational companies are going to solve the problem is a lie.

The narrative coming out from the United States and all the business schools is that governments are the enemy, and that they can’t do anything, and that they are weak.  I’m saying that if we continue to believe this, we will continue to fulfil that prophecy about undermining governments. The liberal narrative that ‘I’m free and should be able to do whatever I can’ is the luxury of the privileged societies. We don’t have that luxury. We live in the most crowded part of the world and the analogy I imagine is that in a forest with lots of dry leaves, don’t light that match. We have to do something different.

I call for a hundred thousand PhDs from Asia, because you can’t get this kind of thinking from the Harvards, the Oxfords and MITs because they are at the forefront of an ideological battle of supremacy of the western economic model. They’re not bad people, but it’s their premise that individuals are kings that I’m against. This is why I call for in my book, the need for collective welfare to replace individual rights, which is anathema to the western liberal narrative.

If we make government the bad guy, then we have no chance, but let’s remember that if not for the government, the airports would not be working. Of course there are bad governments, but there are lots of good people working for the government too.

GCA: Don’t you think that civil society, social enterprises and small businesses can also make some contribution towards a more equitable and sustainable society?

Chandran Nair:  You are right. But even with civil society – and I’m a part of civil society –  I find there are people with good intentions but with poor understanding.  I think a thriving civil society is important, but we must not be seduced by the idea, because not all groups are necessarily well informed.

GCA: But governments respond to the public. Isn’t it about educating the public so that they are more informed in their reactions?

Chandran Nair:  That’s right, and my view is that if the 21st century is constrained by resources, then what does prosperity look like? I’m not talking about growth. I’m talking about development. What does that look like, and who has access to what? Essentially, human existence is based not on whether you have access to broadband, but whether you have access to basic necessities: food, water, shelter, clean air and all those things.

How do we price these and what is the role of the public sector and the state? Because the only thing that protects you from me is rules, and these rules are not made by companies, they have to be made by the state. The state is then pressurised by a combination of companies, the media, civil society groups and individuals like you and me.

What would that state look like? So far, the history of the organisation of the state has been defined through the experience of the west in the last 200 years. On the one hand there is democracy, and on the other hand there is communism. When I talk of a strong state, the reaction immediately in the west is that I’m asking for communism and Stalinism.  I say this is your experience, not mine. We’re not at the end of history. The 21st century will be defined by how China and Indonesia define progress and freedom. Freedom in China is not about someone going to Tiananmen Square and saying it’s not free in front of BBC.  To me freedom is the ability of a majority in Asia to have access to the five basic things. Once your basic human needs are fulfilled, then you can talk about freedom of speech, but the majority of Asians don’t have this, and can only have it by enabling a strong state.

GCA: What do you think of the new wave emerging with social or green entrepreneurs looking to solve community or environmental problems that neither the private sector nor the government have been effective in solving?

Chandran Nair: It’s an important trend. I’m a chairman of a social investment fund. The problem with too many social investments is that there is a lot of noise with a lot of good people trying to do things, but we need scale.  The report by Avantage Ventures “Beyond the Margin: Redirecting Asia’s Capitalism  also says this, that much of the social investment space needs scale to take solutions to hundreds of millions of people. We need to create financial vehicles that allow capital flow to these projects so that these can be mainstreamed.

One of the things I’m proposing is for governments to mandate social investments, such as by making all retail and investment banks include these in their loan portfolio, as part of their licence requirements. We’ve done the research and it’s really about  1% to 2% of their capital flows that are needed to address some of these problems.

This comes back to my argument of having a strong state which can set the rules. I want governments to understand that they are the ones to do this, but of course, we are going to hold them accountable otherwise they will continue to abdicate responsibility and with abdication of responsibility comes sloppiness and failure.  This is not to say all governments will become competent. The argument I want to make is that without strong governments, we have no chance.

About the Interviewer:

Bhavani Prakash is the founder of Green Collar Asia, a thought-leadership portal on developments in the green jobs sector and sustainability, where macro-level trends, as well as insights from green professionals, entrepreneurs and experts are brought together. Green Collar Asia is the media division of Worthy Earth, a media, recruitment and training firm.

Bhavani is a speaker, trainer and writer in the environment/sustainability sector. She has an MBA (PGDM) from Indian Institute of Management Calcutta and an M.Sc in Financial Economics from University of London. She is also a certified EQ Coach with Six Seconds.org

Connect with Green Collar Asia on LinkedIn, Facebook and Twitter. Bhavani Prakash may be contacted via bp[at]greencollarasia.com or through LinkedIn

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