Why is the Inclusive Growth story floundering?

There has been tremendous spurt towards inclusive growth in India over the past few years both in terms of impact and scale of operations - micro finance, livelihoods, education , health, sanitation etc. - as well as in the number of entities engaged in each of the areas. Yet, our recent study of some of the leading entities raises some fundamental questions about the overall impact on inclusive growth year on year and offers deeper diagnosis into a complex problem.

It raises fundamental questions about our ability to recognize or to deal with the much larger process of “exclusion” – by which a vast majority of the people are systemically excluded - at all or at different times.

It points to the complex machinations of our individual and collective minds which makes most of us as perpetrators of exclusion against our own general intent of creating inclusive growth. Due to a variety of factors, our action may be at odds with the general intent.

The Specter of Systemic Exclusion

Instances abound in our daily lives of how our actions defy our larger general intent.

Why do we switch on the air-conditioner, even if the ambient temperature is in a "comfortable range" and keep it at a high difference to the ambient temperature? Even if our general intent may be to minimise use of grid power and to explore alternative ways of creating comfortable ambiance.

This could be done in variety of ways that would be in line with our general intent. We can just withstand the temptation to power on the AC and reach out to open the window or the door instead. Over time we have a variety of options such as:

a. We can train and gear up your body to feel comfortable in a larger range of temperatures.

b. We can use local materials and ambient greenery to create a localised heating or cooling effect, as required. Use of organic detergents and isolation of grey water flow can mitigate any water shortages. Advances in landscaping and wallscaping combined with use of renewables, energy conservation measures such as heat sinks can create a smart air-conditioning infrastructure.

c. We can use a ventilator near the top of the room to let out hot air in summers or insulate the walls for winter.

d. Yet, most of us fall prey to picking up the remote and adjusting the temperature in the moment. We thus procrastinate our larger intent to act in a different way.

Similar conflicts arise when we intend to kick our smoking habit. We may all the time intend to quit smoking and yet, give in to the temptation another time and procrastinate action on our larger intent.

In other instances, it may be about jumping into your car for another short trip, or to skip the carpool or metro trip for another car trip – even if our larger intent may be to reduce car trips by substituting for short trips may be different.

In national policy, exclusion is reflected in an off-budget 5% GDP subsidy to bail out petrol/diesel users but failure to address agricultural distress by providing loans at affordable interest rates or to create packages for large scale transformation for chemical-free farming using maximum of natural or non-toxic inputs, new skills, ingenuity and enterprise; or for similar gaps in our education/training and health/nutrition sector allocations.

At a global level, a 700 billion USD bail-out package , as proposed, for the Wall Street belies global preferences reflected in doing utmost to meet the MDGs, on which most countries are slipping and, India is doing particularly miserably.

The key findings of our study are:

* Our failure to check “systemic exclusion” painfully undercuts genuine and sincere efforts in inclusive growth that focuses on creating livelihood opportunities for tens of thousands of the poor - euphemistically called the “Bottom Of the Pyramid”.

o One, our vision of inclusive growth goes far beyond creating opportunities for the poor. It must delve deeper into what leads to deprivation and impoverishment and come face-to-face with the reality of “much larger” exclusion.

o Two, I think BOP is a weighted term that questions any notion of a “pyramid”, when the reality is that we all need to be “included” into a new vision. Even if we succeed in getting the “bottom” up, mimicking the consumption pattern of the “top”, we are all worse off, given the limits to critical resources.

* Isolated and fragmented efforts on “inclusive growth”, as a result, are inadequate to create net inclusive growth, in spite of great intentions and tremendous efforts, in many cases.

* In the worse case, they act as a safety valve, or as a way to ease the conscience, of “trying their best” or are “overblown” to be presented as evidence that inclusive growth is indeed happening and to counter growing weight of evidences to the contrary, often through unscrupulous means.

Trickle Down or Suck Up - Reality Bytes on Trajectories of Economic Growth

* For some, there is an underlying belief, however misplaced and proven incorrect over past several decades by empirical evidence that economic growth will “trickle down” to the rest. In reality, the present model of economic growth feeds addictive consumption and aggrandizement that is “sucked up”, leaving precious little to “trickle down” or even “sucking up” in the net in direct and indirect ways.

* This particularly marks a general failure to contain our consumption of energy, land and many other limited resources for housing, entertainment, food and transport “excluding” large sections of people from fulfilling even their basic needs or to reduce our pollution and greenhouse gas emissions that “excludes” millions of people through climate change induced natural calamities and diseases, indirectly.

* For many others, who have well understood that growth doesn’t “trickle down”; our diagnosis is that most of them have genuine conflicts in combating procrastination of their global preferences of “inclusive growth” and going along with “exclusion” for one more time. This is a serious challenge that we need to “systemically” address.

SIGN - Guiding Principles and Agenda

The key tenets for checking "systemic exclusion" in a new approach are:

1. To get aware of how “exclusion” is happening in reality and to be prepared to face up to its challenges.

2. Inclusive growth requires micro finance and market interventions, certainly. It simultaneously needs lots of work to evolve a powerful and compelling visioning and similarly for a systemic structure – policies, directives, overall regulatory framework - as per the findings of our study – to align local preferences to the new global preferences. Trying to change local preferences, too long, too far tends to drag and has diminishing returns, and is very frustrating otherwise.

3. Inclusive growth with Nature needs a deeper, shared understanding. Lots of efforts on inclusive growth are creating localized, short-term benefits that does not meet these criteria and is certainly not scalable even if they may hold on for some time.

* A key guiding principle for realizing the new vision is that we must work in synergy with Nature – both internal and external - and not against it. This is based on the assumption that working with Nature releases new energy in the system as well as prevents redundancies, waste and leakages.

Like nature, industrial design should be self-renewing; every product should not only be manufactured using nontoxic ingredients and green energy sources but also be capable of being broken down into its basic biological and technical elements so it can be reborn and reused at the end of its life span, whether in factories or compost heaps... It's a world in which no material is ever wasted."

- William McDonough, Leading Architect and Designer

* This creates WIN-WIN possibilities of a truly inclusive growth that can sustain our new aspirations of resource-smart, prosperous and culturally-rich lifestyles.

I propose the following agenda for SIGN in this direction:

• To create frameworks for policies, directives and overall systemic structure for existing and new institutions based on present competencies.

• To further develop competencies in various areas beginning with core areas of Agriculture, Livelihoods, Community Building, Energy & Transportation.

• To live by – individually and collectively - and to adapt to the emerging shared vision and guiding principles of Inclusive Growth with Nature.

• To provide architectures for eco-system innovations and/or policy advice and advocacy to government, industry, academic NGOs and multi-lateral agencies.

• To run public campaigns to create awareness and to mobilize opinion, support and action and to grow and adapt as a leading national institution in pursuit of our overall purpose of creating Inclusive Growth with Nature.

Regards,

CV