Energy intensive models of economic growth are being questioned by the rise of ‘Development 2.0′, an approach to development that attacks complexity and resource limitations with careful policy design that signals an end to traditional “decentralization” policies advocated by now-struggling Western economies.
Higher levels of economic development require more complex analysis by stakeholders than a strict reading of impact on traditional measures like Gross Domestic Product, UNDP Human Development Report Office Director Khalid Malik said as part of a wide ranging discussion on societal transformation at the Asia Society in New York. Malik’s center works to produce a Human Development Report and index each year, and the cumulative work of the group since 1990 is expected to influence the Rio plus 20 talks being hosted by the United Nations in Brazil later this month.
Ecological limits are part of the later stages of emergence for countries like China and Brazil, Brazilian National Congress Senator Cristovan Buarque said at the Asia Society event. “We are wedded to an outdated model,” Buarque said, citing new partner nations in trade, financial complexity and the independence of many key economic sectors following decades of decentralization as characterizing the new reality for countries facing Development 2.0.
While the panel was made up of countries that are traditionally held to still be emerging economies, speakers pointed out that Europe and the US are struggling with similar development challenges. “Europe is part of this discussion; they are reiterating the growth model through crisis,” Buarque said.
Managing the Transition from Developing to Developed
The possession of robust natural resources is not always an unmitigated good, even after nine years of a commodities boom has benefited overall economic growth numbers, Indonesian politician and economist Rizal Ramli told the Asia Society audience. While Indonesia’s move from a centralized economy dominated by the military to a decentralized economy has opened it to new opportunities and made it more democratic, the unequal flow of benefits to an “oligarchy” has put the country’s democratic progress at risk, Ramli said.
The same issues arise in discussing China, which is swiftly becoming the world’s largest energy consumer but does not in large part enjoy the same natural resource or energy resource riches within its borders that countries like Indonesia and Brazil do. The nation’s inequality is a source of concern, Malik – who was based in China for seven years and on the Advisory Board of the Oxford Centre of China Studies – said, but in China the decentralization process has often resulted in local solutions that have prevented widespread unrest. Roughly 97% of China’s population have connections to the power grid, Malik said, underlining government guarantees of equality of access have been met there.
With energy at the center of UN activities this year, the lessons learned by countries need to flow unimpeded to solve problems around reliability, investment structures and legal frameworks regardless of the level of economic development by traditional metrics, attendees at the panel emphasized. For more on the UN’s Year of Sustainable Energy, read more here.