HONG KONG – By 2050, Asia will have more than five billion people, while the European Union’s share of the global population will decline from 9% to 5%.
Annual economic growth in Asia over the past 30 years has averaged 5%. Its GDP is projected to increase from $30 trillion to about $230 trillion by 2050. The balance of power in the twenty-first century is shifting – in social, economic, and, arguably, political terms – from west to east.
Western anxieties about a looming “Asian century” stem largely from the precedent of twentieth-century geopolitics, in which the West dominated less-developed nations. But this dynamic is outdated, and Asia would suffer as much as the West from any attempt to emulate the British and American empires of the nineteenth and twentieth centuries.
As Asian economic growth has increased, consumption in the region has also risen. Multinational companies and Western countries – both of which stand to benefit greatly from Asia’s increasing consumption – have encouraged Asians to aspire to a Western standard of living, with its high energy usage, electronic toys, and meat-heavy diet. Asian governments seem willing partners in this one-dimensional approach to development, and are eager to lead global economic growth. Yet it is neither desirable nor possible for Asians to consume in the way that Westerners do, and Asian governments should face up to this reality.
In previous centuries, Western economic growth was characterized by a comparatively insignificant minority having unfettered access to resources, and was thus built on fueling consumption. This was, after all, the idea behind colonialism, which succeeded economically by underpricing resources or even obtaining them for free.
But the planet simply cannot support five billion Asians consuming like Westerners. The earth’s regenerative capacity was exceeded more than 30 years ago, and we now use 30% more resources than the planet can sustain. Although we know this to be the case, the vast majority of Western economists and institutions continue to encourage China and India to consume more.
Asian governments must reject this trend, but, having been intellectually subservient for so long, it is not clear that they will. Western governments, for their part, must stop being intellectually dishonest. Indeed, they must openly acknowledge the impossibility of supporting demands for ever-higher material consumption in Asia without irreversibly changing our planet’s climate and resource pool. Trade relations are far less important than establishing a dialogue between the West and Asia that addresses how to live within limits.
For example, Western leaders concerned about climate change must understand that economic instruments like emissions trading are not a panacea. For Asia, resource management must be at the center of policymaking, which may include Draconian regulations, and even bans. Otherwise, resource shortages will push up commodity prices and create crises in food, water, fisheries, forests, land use, and housing, thereby leading to greater social injustice.
The West must help Asia to challenge the idea that consumption-led growth is the only solution, or even a solution at all. And Asia must adopt three core principles to avert environmental and social crises. First, economic activity must be secondary to maintaining resources. Second, Asian governments must take action to re-price resources and focus on increasing their productivity. Third, Asian states must recast their central role as being to defend our collective welfare by protecting natural capital and the environment.
All of this implies that Asian governments will need to play a far greater role than officials in Europe or America in managing both the macro-economy and personal consumption choices, which will require very sensitive political choices regarding individual rights, as well as policies that powerful business interests – many of them Western – will resist.
Asian governments will sometimes need to set strict limits on resource use – and have the tools to ensure that society respects these limits. They should begin, for example, by stressing that car ownership is not a human right. The debate about rights must emphasize constraints, not the utopian definitions of Western politicians.
These policy options fly in the face of Western liberal-democratic orthodoxy. But Western policymakers should not react negatively to these sorts of policy choices made by Asian governments, nor misconstrue them as anti-capitalist or anti-democratic. The West must realize that its consumption-led economic system has exhausted the world’s resources, and that it is not a viable option for most Asian countries, whose governments must employ different political methods to create more equitable societies.
Chandran Nair is the founder of the Global Institute For Tomorrow (GIFT) and Co-Founder and Chair of Avantage Ventures, a social investment advisory firm based in Hong Kong. He is the author of Consumptionomics: Asia’s Role in Reshaping Capitalism and Saving the Planet.
Copyright: Project Syndicate, 2011.