The “Asian century” means tightening Asian belts

Chandran Nair
Europe's World

The shifting of economic and political power eastwards means the West must wake up to the fact that promoting consumption-led growth to Asia is not a viable option when natural resources are being so rapidly exhausted. Chandran Nair outlines how Asia should abandon Western-style economic practices to achieve a sustainably prosperous future on its own terms.

ust as Britain influenced the course of the 19th century and America much of the 20th, many now believe the 21st will be the Asian century. The evidence makes a strong case; Asia will have more than five billion people by 2050, while the European Union’s share of the global population will decline from nine to five per cent. Asia’s influence over the world at large has increased in line with a strong economic growth rate that over the past 30 years has averaged five per cent every year. Its GDP is projected to increase from $30 trillion now to about $230 trillion by 2050. The widespread belief is that the balance of power in social, economic and political terms is rapidly shifting from the west to the east. Sadly, this is also giving rise to fears in Europe and even more so in the U.S. about Asia’s role in the world, almost suggesting that it had never been imagined Asians would become economic equals.

The idea of an Asian century feeding western fears and misconceptions and stimulating a new hubris in Asia, serves only to promote an archaic world view that is rooted in 20th-century geo-politics where western dominance over less developing nations was the norm. This is a dangerous and naïve way of looking at the geo-political course of this century. Just like the British and Americans before them, there is nothing inherently superior about Asian governments, its people, culture or values, which are at the emotional core of this idea – witness American exceptionalism of the last 60 years. An Asia that believes that this outdated idea can map its future will only set itself on the wrong trajectory and serve its own people ill. The lessons of history should make it clear that this approach to the 21st century is at best useless and at worst harmful to all involved. It is also dangerous for Asia and the rest of the world for very different reasons.

The proposition of an Asian century risks creating a sense of entitlement over the natural resources Asia needs, and the opportunities Asian people may believe they deserve. Already hundreds of millions of people in Asia are being told by multinational companies and western countries – both of which stand to benefit greatly from increasing Asia’s consumption – that they can aspire to a western way of living with its high energy usage, electronic toys and meat-heavy diet. Asian governments seem willing partners in this one dimensional economic approach to development, and are also eager to be seen to be leading global economic growth. It seems that every Asian is being encouraged to live like a European or to attain the American dream, yet this is neither desirable nor possible, so Asian governments should face up to reality.

Western-led economic growth in previous centuries was characterised by a comparatively insignificant minority having unfettered access to resources, and was thus built on fuelling consumption. This was, after all, the idea behind colonialism, a successful attempt to benefit economically by under-pricing resources or even having them for free.

The 21st century is a very different time. The planet simply cannot support five billion Asians consuming like Westerners. The earth’s regenerative capacity was exceeded more than 30 years ago, and we now use 30% more resources than the planet’s sustainable capacity. Although we know this to be the case, the vast majority of Western economists and institutions continue to ignore the facts and are encouraging China and India to consume more. This is a bad idea that must be rejected by Asian governments, but having been intellectually subservient for so long it’s not clear that they will.

The good news is that events of the past two to three years have got many thinking. In their dealings with Asia, European governments must stop being intellectually dishonest and openly acknowledge that it is impossible to support such demands for material consumption without irreversibly changing our planet’s climate and its resource pool. More honest forums between Europe and Asia on addressing how to live within limits and are much more important than trade-driven links.

But European leaders too must understand that economic instruments like emissions trading are not a panacea. For Asia, resource management has to be at the centre of policymaking, and this may include draconian regulations and even bans. Otherwise shortages will push up commodity prices, and create crises of food, water, fisheries, forests, land use rights and housing, leading to greater social injustice.

Asia will in the first instance have to pay a high price because of its population and its already stressed environment. And Europe must help Asia to challenge the idea that consumption-led growth is the only solution, or even a solution at all. But can it do this given that its political economy is based on promising voters constant economic growth?

Three core principles Asia must adopt to avert environmental and social crisis are, first, that economic activity must be subservient to maintaining resources.

Second, that Asian governments must take action to re-price resources and focus productivity efforts on resources, not people. And thirdly that collective welfare must take priority over individual rights. Asian states must recast their central role from protecting individuals to protecting natural capital and ecological services. In essence, Asian governments will need to play a far greater role than in Europe or America in the management of both the macro economy and personal consumption choices.

This will involve very sensitive political choices about individual rights, as well as policies that will encounter major resistance from powerful business interests, many of which will be western. Asian states will sometimes need to set harsh resource limits, and have the tools to ensure that society respects these limits. Asian governments must begin by stressing that car ownership is not a human right. Rights will be a major consideration, and these rights will have to be shaped by constraints, and not by the Utopian definitions of Western politicians.

These policy options fly in the face of democratic orthodoxy in the west, with one of its core principles being that the rights of an individual take precedence over the group. It will be important for Europe’s policymakers not to react negatively to these sorts of policy choices made by Asian governments, or to misconstrue them as being anti-capitalist or anti-democratic. European leaders must realise that the current western consumption-led economic system has exhausted the world and it is not a viable option for most Asian states, whose governments must employ different political methods to create more equitable societies.