This is that ‘silly season’ before elections when the truth, if stated, will be twisted to show how one side was right and the other wrong and used as a stick to beat each other with. Those who speak up risk being placed on one side or the other of a contentious battle. So only fools venture where angels fear to tread. Yet, unless we face up to the truth about how ‘we’ are doing as a country, without getting mired in the finger-pointing blame game, we will not improve.
India’s goals of development broadly accepted by all and expressed in the objectives of its 12th Five Year Plan are: Faster, More Inclusive, and Sustainable Growth. These are also the goals of many other countries. 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. Therefore one may compare how well India is doing 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. Then the list was 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 to get specific in national debates about 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 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 listen to each other too. The country must have an integrative vision of its future to unite it and a balanced score-card to guide it. The task before us, to be taken up by whosoever will lead the country, is to lead and facilitate this dialogue.
Until then, the SEDA analysis points us to focus urgently on the two areas in which we are doing worse than our peers: converting growth into employment and protecting the environment as we grow.