Critical task for Asia: building strong institutions

By GIFT

Mr Nair told Bloomberg Voices host Bernard Lo that societies and their governments needed to swiftly recognise the health, environmental and political risks of keeping such a vast number of people in dire conditions. 

Mr Nair covered a broad range of critical issues that Asia as a whole and India and China specifically faced in what had often been called the Asian Millennium. These included the three spheres of development in Asia – increasing urbanisation, poverty alleviation, and the “tragedy of the commons”. The interview was aired on Monday, 24 April on Bloomberg TV.

Responding to Lo’s observation that many Asians appeared to be “left behind” in the Asian Millennium, Mr Nair said, “We need to rapidly recognise the severity of the problem, both in terms of the political risks inherent in keeping so many people in impoverished conditions, the health impacts, et cetera, and therefore really focus on strengthening institutions.”

Mr Nair said that the flipside of the rapid growth in prosperity was the vast poverty: “I think it’s important for those of us that are engaged in the efforts to build prosperity to recognise that we are in the minority … and are privileged – there’s nothing wrong with that.

“The majority – and therein lies the risk – are deeply underprivileged and living in very dire conditions. Now, my view is that as we live more and more in an information age in which even now the poor have access to great information, the tensions will increase. And poor people who don’t have access are getting very angry,” Mr Nair said.

The growth of prosperity in Asia had raised a slew of issues that required urgent attention, and needed to be addressed in relation to each other, rather than separately, Mr Nair said: “The concept of sustainable development – a much-abused term – is essentially trying to create prosperity, because all of us want prosperity.”

This needed to be balanced with “the other deliverables of social equity and the quality-of-life issues relative to … the environment”. These were encapsulated in the three spheres of development in Asia. “The urban issue – more and more people are living in urban areas. In China that number is going up to 70 per cent over the next 25 to 30 years, and therefore we have to confront the quality of life issues with regard to the urban issues – [such as] air quality, waste.

“The poverty alleviation issue is a very important one in terms of making sure poor people are not degrading the very resources they need to depend on to live, and therein come issues … about shelter, food, property rights.

“The third element of this is the so-called tragedy of the commons: the air we breathe, which has no boundaries, no geographical, political boundaries, the issues of our seas, the fisheries, and clearly the forests that we all depend on, irrespective of nationality and geographical boundaries.” These were being depleted for individual interests with little or no regard for the common good and the future.

The growth of mega-cities was “an ongoing experiment worth watching”, especially in China, where plans were to move 300 million people in to cities over the next 25 years: “I don’t think any nation’s done this before, so the issue will be how will the infrastructure cope and provide the basic needs – again coming to the basic urban needs: not the things that you and I take for granted, but just reliable water supply, shelter and quality of life – and, if we can help it, a bit of recreation”.

Mr Nair touched on the burden that cities are and will place on the rural hinterland: “Urban centres are a huge draw, and therefore … ecological footprints are enormous and this is a debate that continues to rage. It is an efficiency issue as well – but you have to have the basic infrastructure – and Hong Kong does in that sense provide a very good example of an urban population, seven million people living very efficiently, particularly with transport, infrastructure and all of that”.

Further to this, transnational issues such as air pollution – as with Hong Kong and the Pearl River Delta, where factories churn out exports for the world – required the proper approach and a coherent, cross-border institutional framework before decisions could be made on how it should be tackled, he said.

Elsewhere, Mr Nair questioned blind distrust of corporations. It was clearly a worldwide phenomenon but he called it unfortunate: “Every survey, unfortunately, suggests that people mistrust governments and companies and this is very unfortunate, because on one hand we, the public, depend on corporations for the goods and services that they provide and jobs and all of those things, so there’s a sort of implicit hypocrisy.”

On the other hand, Mr Nair added, while regulations were vital as the framework to control corporate externalities – unaccounted for external impacts of corporate activities borne by society and the environment – ultimately it was the people that elected the governments that made regulations: the public needed to work through their own regulators to manage externalities.