‘Are we doing as well as we want to?’ is the question we must ask ourselves. We were proud of our GDP growth when it was high. Now we are dismayed. Even in those halcyon years of high growth not so long ago, we were not happy with the progress of inclusion in growth and the pace at which social and economic inequalities were being reduced. Nor could we be happy with the deterioration of our natural environment in our hunger for material and GDP growth. The truth is that now we are not doing well on any of the three goals we have set ourselves viz. faster, more inclusive and more sustainable growth.
We cannot carry on the way we are. If we want to do better as a nation, we will have to face up to the truth and change the structure of the discourse in the country. Our public discourse is crippled by several disabilities. The first is the blame-game. In our competitive politics, debates promptly descend into fault-finding and finger-pointing. Attempts to find out how governance broke down in the coal sector and in telecoms deteriorated into a competition between political parties of, ‘you did more wrong than we have.’ TV anchors seem to encourage such rancorous debates because they are more entertaining though hardly illuminating.
We are split not only on political party lines. We are also divided in our ideologies of development. Some advocates of high GDP growth as a panacea can be extremists. Intolerant of other points of view, they have been computing and advertising how much damage to growth the present and previous ministers of the environment have caused. In this acidic atmosphere, listening to those whom one has declared as enemies is hardly easy.
Third, we are too sensitive about our image abroad. We fear to publicly admit the truth about ourselves because it will be reported abroad and make us look bad. This is almost pathological. When the CAG exposed the depths of several corruption scandals, which were then widely reported in international media, there were even calls for charging him with treason for the damage he had done to the country!
We may not want them to know, but others do know how we are doing. After all there are many international comparisons. Faster, more inclusive and more sustainable growth is not only our goal. It is the goal of many other countries too. In fact, as it emerged in the Global Economic Symposium in Kiel in early October 2013, these could be summarized as the goals of the entire internationally community. With these international comparisons, anyone can know how well India is doing compared with other countries. Also, we can learn from others how to do better.
First, how well is India doing compared to others? Many comparisons have been made by international agencies. Amongst the clearest is the Sustainable Economic Development (SEDA) framework recently developed by The Boston Consulting Group. SEDA is an instrument for assessing the effectiveness of countries in converting GDP growth to ‘well-being’ of their citizens. SEDA considers performance along ten dimensions as the indicators of overall well being. These are: GDP per capita, economic stability, infrastructure, employment, education, health, income inequality, governance, civil society, and impact on the environment. SEDA co-relates growth in GDP per capita with the other variables to determine a co-efficient of transformation of GDP wealth into overall well being in the country.
SEDA compares the relationship between levels of wealth and well-being of all countries in the most recent year for which BCG had the data, which was 2011 for most countries. It also includes a comparison of the performance over the previous five years: how was growth in wealth in these years converting into well-being? The combination of these two measures provides an evaluation of the ‘policy-matrix’ of the country’s growth strategy i.e. how is improvement on all dimensions being managed along with growth. Since India’s goals are faster, more inclusive and more sustainable growth, the SEDA analysis is very relevant.
How well we are doing in converting increase in GDP (which was high in the years BCG has studied) to well-being can be assessed by comparing India’s performance with its peers. BCG has chosen twelve countries as India’s peers. These are the three other BRICs countries, five countries in S.E. Asia including Indonesia and the Philippines, and our four neighbors—Pakistan, Bangladesh, Sri Lanka, and Nepal. What this reveals is that India seems to be doing worse than its peers, and worse even compared to its neighbors.
The two dimensions along which India fares worst are generation of employment and protection of the environment while growing its GDP. The country ranks relatively high, in terms of its present position, with respect to governance and economic stability. But its performance on both these dimension is assessed to have deteriorated in recent years—an evaluation that Indian citizens would agree with.
What can we learn from other countries about how to improve our performance? At the Global Economic Symposium, the Bertelsmann Foundation of Germany presented their study on ‘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. The list was then narrowed to five countries for deeper study. From the study of these 35 countries, and further insights from the five, 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 get specific in national debates on a new score-card of progress. Effective score-cards are not merely lists of measures cobbled together. They have an over-arching concept to integrate measures of growth, social impact, and environmental sustainability.
The concept of a balanced score-card to measure and report progress is also being adopted by leading corporations for formulating strategies for sustainable growth. It makes corporations accountable for the impact their growth has on the environment and society. This is very different to the anemic paradigm of CSR where expenditure of a small portion of profit, howsoever made, is considered a discharge of responsibility. So too for nations: a strategy of growth first, with whatever consequences it has on the environment and society, is not sustainable. Inclusion and sustainability must be achieved along with growth. Balanced score-cards are being used by leading nations too.
The second requirement for success 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 also listen to each other to develop an integrative vision of the future of the country.
It is written in the Old Testament: ‘Nations without vision shall perish’. The force to change arises from a tension created by acceptance of the truth of where one is and its distance from the aspirational goal to which one is committed. There is too little impetus towards change when the truth about current reality is obfuscated by the fear of looking small, or the goal is set too low because what one really wants seems beyond reach. To get out of the rut one must reach for the stars.
We must have an integrative vision to unite us and a balanced score-card to guide us. The task for the country, to be taken up by whosoever will lead it and those who will assist them, is to lead and facilitate this new discourse.