Two meetings on 7 May this year, only a few kilometers apart within Delhi, were conceptually in two different worlds. One of these was at the India International Centre (IIC) to commemorate the 50th anniversary of a seminal meeting held at the IIC in May 1966 on the social responsibilities of business. The meeting in 1966 was inaugurated by the Prime Minister of India, Lal Bahadur Shastri; the opening speech was delivered by the pre-eminent civil society leader Jaiprakash Narain; and the meeting ended with a Declaration of Business Responsibilities.
[Raghuram Rajan] spoke at some length of the inaccuracies in conventional measurements of GDP, and their inappropriateness as measures of well-being of societies.
The other meeting on 7 May this year was at the Nehru Memorial Library, where Dr. Raghuram Rajan, governor of the Reserve Bank of India (RBI), delivered the 6th K.B. Lall Memorial Lecture. Dr. Rajan pointed out that the global economy is in the doldrums, and in a situation that it never has been in before. Economists have no prior experience of such a situation, he said, and they will have to invent solutions. He spoke at some length of the inaccuracies in conventional measurements of GDP, and their inappropriateness as measures of well-being of societies. However, at the end, the audience seemed to be most interested in whether the RBI would permit the publication of the names of the 500 corporate defaulters of loans from Indian banks. His remarks about this made the headlines of the national papers the next morning.
In the IIC, leaders of many civil society organizations described the damage to communities and the environment by corporations' products and production processes. They lamented that there had been barely any change in the behavior of corporations since the lofty conference on the social responsibilities of business 50 years ago. They said the 2% CSR law introduced by the Indian government was taking business backwards to an old paradigm of corporate social responsibility, associated with charity, wherein giving alms at the temple at the end of the week is absolution for any sins committed during the week while making money. What is really required, they asserted, is to make businesses accountable for the impacts their products, processes and business practices have on society and on the environment, which the declaration of business responsibilities had already stated 50 years ago.
Inclusion and sustainability must be achieved along with growth. Therefore, balanced score-cards are being developed and used by leading nations.
India's GDP may be growing, but the participants at the recent meeting at IIC were sceptical about the numbers. They said GDP is the wrong metric of human progress. They were very angry with 'crony capitalists', who were subverting good governance, while becoming very rich themselves. In these matters, they seemed to be on the same page as the RBI governor, though saying the same things differently.
Dr. Rajan suggested that leaders of all countries' governments as well as heads of their central banks, need to coordinate with each other more closely, because the issues affecting global growth cross national boundaries. He proposed another Bretton Woods-type conference, to create new rules and institutions to manage global financial and economic affairs. Whereas, all the matters the civil society organizations are concerned with--social development, environmental sustainability, and inequality of opportunities--are covered in the UN's Sustainable Development Goals (SDGs) that all countries' governments have agreed to last year.
The world is moving on two tracks which are not converging. On one track are institutions concerned with a narrowly defined 'economy', and with GDP. On the other track are institutions concerned with what GDP does not measure--environmental sustainability, human dignity, livelihoods, and justice--the concerns of the SDGs The two worlds of GDP and SDGs must come together.
In India, unsatisfied demands for equal opportunities and fairness are fuelling unrest--by tribal people, farmers, and young people--in many parts of the country.
The Bertelsmann Foundation of Germany has made a study of "Winning Strategies for a Sustainable Future". Bertelsmann studied 35 countries around the world that appear to be leaders in developing strategies for sustainable growth. Bertelsmann examined the quality of their strategies, the frameworks for implementation, and results so far. Bertelsmann selected five key success factors. Two of these must be highlighted because they are the starting points of the process of faster improvement.
The first is that sustainability policy derives from an overriding concept and guiding principles that are made to permeate significant areas of politics and society. And 'best practice' to make this happen is to get specific in national debates on a new score-card of progress. Inclusion and sustainability must be achieved along with growth. Therefore, balanced score-cards are being developed and used by leading nations.
The second requirement for success, Bertelsmann's study found, is that sustainability policy must be developed and implemented in a participatory manner. Therefore, the task for countries is to develop new participatory formats. Not only must large numbers of people be engaged, but different constituents must listen to each other to develop an integrative vision of the future of the country.
The world cannot carry on the way it is... The structure of the discourse must change. The two parallel discourses, about concerns with GDP and SDGs, must converge.
The global discourse, like the two meetings in Delhi, seems divided into two worlds: the world of finance and growth, and the world of equity and sustainability. Inhabitants of one world eat cake. In their world, one dollar equals one vote: those who have more money have a greater say in fixing the rules of the game. Inhabitants of the other world demand bread for everyone. In their world, one living body is one vote, regardless of how little it owns.
Increasing inequalities and crony capitalism are becoming issues of great concern agitating people everywhere. Economists too are concerned with the effects these issues have on economic growth. The anger against the established order is mounting. Donald Trump and Bernie Sanders have tapped into it in the USA. In India, unsatisfied demands for equal opportunities and fairness are fuelling unrest--by tribal people, farmers, and young people--in many parts of the country.
The world cannot carry on the way it is. Those inside the walls must enter into a dialogue with those outside the walls. The structure of the discourse must change. The two parallel discourses, about concerns with GDP and SDGs, must converge. It is no longer sufficient for finance ministers, central bank governors, and economists to talk amongst themselves to figure out solutions for the global economy. Civil society voices must participate in the dialogue too. These dialogues will be difficult initially. Mistrust is high. Perspectives are different. Nevertheless, perspectives must be combined and trust built to improve the world for everyone.
Finally, social media is an inadequate platform for the meeting of minds required. It increases volumes and decibels in debates, and sharpens divisions. Whereas, deep dialogue to bridge divides requires what the Germans call "four eye" conversations, in which two sets of human eyes look deeply into each other.
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