This June, an expected 100 heads of state, together with 50,000 representatives from governments, multi-lateral agencies, and civil society will gather in Rio. They will call for a fresh economic paradigm built on the principles of economic and environmental sustainability.[break]
The grandly staged Rio+20 commemorates two decades following the historic 1992 Earth Summit, an event that established the United Nations Climate Change Panel. Rio+20 will focus on global concerns twenty years on: climate change, food and water security, poverty alleviation, and the closing of income gaps.
But even during the run-up preparations for Rio+20, there is fear that world leaders cannot reach a consensus on these very issues that define the sustainability of our planet.
The past 20 years of so-called “globalization” to create global prosperity has left more than 40 percent of the world’s population living in poverty, and one sixth of our planet living in extreme poverty. This pattern of development has created greater gaps between rich and poor. Eighty percent of the world’s population lives in countries where income differentials are widening.
This economic imbalance is caused by distortions in our global trading and financial system, to a great extent caused by the very institutions that Breton Woods created to supposedly prevent this – the World Bank and IMF.
For decades, these institutions have prescribed with cookie cutter uniformity the “Washington Consensus” formula of neo-liberalism, sometimes called “market fundamentalism.” It concocts greed (Adam Smith’s invisible hand) as the alchemy of market equilibrium.
However, with the collapse of global markets in 2008, there has emerged a new consensus that this old concoction does not work. The very Washington Consensus principles of monolithic globalization are now being challenged across the globe by calls for diversified localization.The word on the street now is that we need a “new consensus.”
The year 2011 witnessed a worldwide middle-class revolution. Gaps between rich and poor were widening while the global middle-class were being pinched into extinction, essentially joining ranks with the poor. From Cairo to New York, everyone was fed up with the great greed conundrum. Like the many-headed hydra, global revolt took many forms.
In 2011, people across our planet demanded change. Protestors symbolically joined hands from Cairo, Damascus, Athens, Madrid, London, and Moscow. Everyone felt something was wrong. The old Bretton Woods system failed us. Or maybe the world has just outgrown it.
The Washington Consensus proved to be a cocktail of ideological theories that do not fit the realities of underdevelopment, and the new needs of our transforming world.
There is a crisis of credibility. Today, the debt-ridden economies of America and Europe are rudderless. The politicians are clueless. It is clear that political leadership had been reduced to adopting very short-term remedial measures just to stay in power. The shortsighted greed of a narrow group of corporate and political leaders is at the core of the problem. That is why people talk about one percent vs. 99 percent. That spells classic class struggle, the formula for revolution.
However, protestors, inspired by Gandhi, have done their best despite mace in some cities and bullets in others, to remain generally peaceful.
Positive change will occur only by lifting more people out from poverty and narrowing gaps between those who have and those who don’t. At the same time, blind economic growth, such as the one advocated in China, is not the answer. We are facing a deteriorating environment, to a great extent caused by such growth. The stimulus packages meant to encourage consumption are not an answer, either. Probably our planet’s biggest problem is over-consumption.
This is not a question of hugging trees. It comes down to the core issues of food and water security. Climate change is in fact the single biggest security threat to our planet today. Yes, the price of water may soon be more expensive than oil. In some places, that spells war.
So doesn’t our planet deserve a fresh economic paradigm? Imagine an economic model without greed. Enter the concepts of “compassionate capital” and “stakeholder value.” Socially responsible economies built on diversified localization rather than monolithic globalization.
That’s what they will be talking about at Rio+20.
New models are rising. The Himalayan Consensus pioneered by Asian activists and social entrepreneurs calls for sustainable local economics and grassroots community development as a basis for water and food security, prevention of ethnic violence and terror, in both the developing and developed world.
Moreover, it’s going global. Across Africa, civil societies and small-scale businesses now support social-environmental programs and community development.
Succeeding where corrupt dysfunctional governments and international aid programs failed, today forty percent of African productivity comes from the informal sector.
Activists across the continent now call upon mainstream economists to recognize “African Consensus” as a fresh approach.
It’s the beginning of a new global consensus.
We are sharing an increasingly complex and integrated, multiethnic world, of rapidly diminishing resources. Ideologically based economics, as practiced in the past, are no longer relevant for our rapidly transforming multilateral world.
Greed-based neo-liberalism, market fundamentalism, shock therapy, and monolithic globalization are concepts that had their time in a past era. They are far too simplistic in the broader context of our planet’s challenges today.
We need an economic middle way. That is what we mean by Peaceful Revolution.
A new-growth era must be heralded adopting green investment and finance. Massive infrastructure investments required for conversion of energy grids from fossil fuels to renewable energy and the accompanying industries and financing programs can be the next economic driver for our planet.
It is a misperception to think that green economics will not stimulate growth. It will be the next growth game changer. America has the research and development but not the political will to make this move.
China has the capacity and finance to lead in this new field but the political decision to invest in green growth has not yet been taken. Whichever nation grabs the green growth driver will lead the planet as the next real economic superpower.
So let’s hope Rio+20 can reach a new world consensus.
The writer is a lawyer and political economist living in China, and the founder of the Himalayan Consensus Institute, an NGO dedicated to ethnic diversity and culturally sustainable development. While being a member of the United Nations Theme Group on Poverty and Inequality, he is also on the ScenaRio2012 panel of 100 opinion makers to prepare the Rio+20 UN Conference.
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