Learning unlocks all doors

Newsletter Issue 23 : March 1, 2009- March 31, 2009





Our smaller future

By Sunita Narain

Source: Down to Earth, Mar 15 2009

First came the food crisis, early last year. As prices of daily bread soared, riots broke out and food shops ran empty. Countries realized the value of growing food locally. Then, even as food prices stabilised somewhat (it remains high), oil prices jumped so high even our normally unflappable finance minister yelped. Since then, the price has crashed and with economic slow-down promises to stay down. But the world did learn the pain of high price and shortages. Not enough, of course, for it to get serious about re-inventing energy security. But learn it did.

By September 2008, our economic czars, exhaling from oil-relief, had to hold their breath again. Starting with Lehman Brothers, the biggest of the big started crashing; every week brought a new surprise and a different downfall. For once, even the know-it-alls—the Davos glitterati—seemed uncertain of the future. They still don’t dare exhale.

The seizures did not stop there. Every day, week or month, a part of the world experienced unusual weather—hurricanes, floods, unseasonal rainfall, bitter cold or intense heat, forest fire. It is difficult to compute the effect of such events on economic activity. But the world hurt badly, and is still hurting. The growing intensity of ‘natural’ events and variable weather is a clear sign of climate change, as science also tells us. We were—are—witness to another level of global collapse.

 In all, our world has changed, even if we do not accept it, or do not want to change with it. Therefore, what will make countries more resilient to face the future? The question also is whether this ‘survival’ strategy can be built to deal with fuel and food shortages and climate change. In other words, do we have a formula for the future world?

Governments, which till yesterday pushed for integration of global economies, are now realizing how vulnerable such integration makes them to external collapses. The export-oriented economies are the worst hit in this recession. Indian commentators, who loved to love China for its export-oriented strategies, are today saying India’s investment in agriculture and rural resilience may just have worked. She was more able to cope with global vagaries by building durable domestic markets. How was this done? First, the country increased the minimum support price for agriculture in the past years. That means farmers are the real heroes today. They have grown more. The country has harvested more. There is local food production, adding to local food security.

Of course, this is precisely where we must begin to unpack the ‘integration’ deal.  Currently, world agricultural prices are completely skewed because of the massive subsidies the rich world provides to keep its farmers in business. In an integrated world, our farmers lose out. To import cheap food, to keep the bill on public procurement as low as possible, our government has scrimped and saved and not paid farmers the true cost of growing food. This, in turn, has destroyed local livelihoods and local economies. The turn-around, thus, will need much more un/doing; better prices for food, investment in local water sources; better seeds and, most importantly, improving productivity of small farmers in dry land areas.

The second big-ticket difference came because of the national rural employment guarantee scheme, which created jobs and so built resilience. The challenge now is to use employment creation to build rural assets, for double benefit—jobs and sustainable livelihoods. It is this ‘employment’ challenge the future world must grasp. Till now, we were tutored employment would come from the very sectors—industry and services—that, today, are collapsing like nine-pins. We never believed in land- or alternative-employment options, and so policy willfully worked to destroy existing work options.

Take the big fight of the years gone by—the entry of big retail to take over the mom-pop business of small shops, and the entry of contract-corporate farming to take over small-holder farmers. These ‘small’ people were dismissed because they were not organized, not part of established business, as we knew it. What got missed was the fact these small-holders—of shops or farms—are large employment creators. More importantly, they are more able to cope with uncertainty—their costs are lower and they adapt quickly to changes. They are more resilient. The future is here.

This investment in local infrastructure for local livelihoods is also an important part of the climate puzzle. The fact is global consumption patterns are built on the use of large amounts of cheap goods, imported over long distances. This over-consumption is good for integrated economies, and bad for the environment: it leads to massive use of natural resources, massive waste and earth-devastating pollution.

But today, when national economies are built on the wasteful consumption of some, it is difficult to de-link. Too much self-interest is built into this wasteful economy. Nevertheless, let us also be clear: We cannot consume to be rich and still think we can save tomorrow.

It is here, again, the pieces come together. The world has to re-invent economies for tomorrow, make them less economically vulnerable and more climate-secure. It is here opportunity exists: investment in the local economies of the poor. The businesses of the small, combined with green enterprises—from decentralized solar to smart-grids—will be the future of business. There is a real need to think of the ultimate small revolution. In a de-globalising world that’s integrated, yet smaller.

Only then can all of us exhale.