Philosophy of Sustainable Development ¹

N.A. Mujumdar

There is massive literature on sustainable development and the UN and UN related multilateral agencies dealing with trade, environment and poverty have made their own contribution to the growing literature. Professor U. Sankar in his scholarly paper, has given you a sample of the definitions of sustainable development.1 One of them is “meeting the needs of the present generation without compromising the needs of future generations”. A more eclectic definition is by World Commission on Environment and Development (WCED): “sustainable development is a process of change in which exploitation of resources, the direction of investments, the orientation of technological development and institutional change are all in harmony and enhance both the current and future potentials to meet human needs and aspiration”.2

In my brief address I would not seek to discuss the nuances of these definitions but to provide you the broad canvass of what I would prefer to call the philosophy of sustainable development. I would submit that only against the background of such a broad canvas can a blueprint for sustainable development for a specific country can be worked out meaningfully.

The choice of the word “Philosophy” is deliberate. The parameters within which issues of sustainable development need to be addressed have witnessed a significant transformation. First, development economics has discarded the age-worn “trickle-down” theory of growth and has embraced “inclusive growth”. Second, the private sector is no longer guided by Milton Friedman’s dictum: maximisation of profits is its sole objective. The twenty-first century model of a private company shows ample awareness of the larger concerns of the community, including depletion of natural resources and environmental degradation. Predatory capitalism is dead.

There are thus, three essential ingredients of the receipe for sustainable development. First, while most writers on sustainable development seem to emphasise inter-generational equity, as the first definition I quoted indicates, I would stress that intra-generational equity is equally important. The very survival of the community depends on how soon we would facilitate the attainment of intra-generational equity Survival comes first before sustainability. Second, many writers seem to over-emphasise the role of public policy in sustainable development: the title of the present International Conference is an instance in point. I would seek to argue that the attainment of sustainable development is a co-operative enterprise in which both the private and public sectors have a role to play. Thirdly, in both the cases, private and public, community-centred development holds the key to attainment of sustainable development.

Intra-generational Equity

Let me begin with our own experience of development. The Eleventh Five Year Plan (2007-08 to 2011-12) aims at putting the economy in a sustainable growth trajectory with a growth rate of 10 per cent in the terminal year. Rapid growth is an essential part of strategy for growth and development but we have now realised that the growth process has by-passed certain sectors of the economy and sections of the population. Inclusive growth, or broad-based and decentralised growth, is therefore the new strategy adopted by the Eleventh Plan Inclusive growth has become a growth and development imperative: growth because a high GDP growth can be sustained only if other sectors or segments of the economy, which have been sluggish because of a number of factors, including policy neglect, can be activated. Development, because this is perhaps the best route by which the bulk of the poor, whom the process of growth has by-passed, can be provided with livelihood and food security.3

This new-found concern for growth with equity shows that development economics has come a long way from its earlier position. In the early 1950s, when the Indian Planning Commission sought to build equity into the development plan, the mainstream development economists scoffed at the idea. Their dictum was: Enlarge the size of the national cake: distribution will take care of itself. These were the hey-days of the percolation or trickle down theory of growth – a theory which has been disproved by empirical experience. Equity is intrinsically important as a development goal in its own right. But sharing of economic and political opportunities is also instrumental for economic growth and development. In other words, equity reinforces the growth process itself. Promoting intra-generational equity has thus acquired a new dimension in strategies for sustainable developments.

Nearly 100 years ago, Mahatma Gandhi emphasised: “Basic human needs have the first claim on Society’s resources and it has an obligation to arrange its economic affairs in a manner that the needs of all its members are met”.4 You cannot have little islands of affluence or opulence in an ocean of poverty. The social system to be sustainable has to first ensure that basic needs of all are met. The contemporary relevance of Gandhi’s economic philosophy is quite remarkable. The community-centredness of the approach to sustainability is thus underlined.

Private Corporate Sector

In the current discussions on the so-called social responsibility of the private corporate sector, it is customary to assume that such responsibility is in the nature of glorified charity. It was left to the Coca-Cola Chief who represents the not so pretty face of modern capitalism, scarred as it is by the recent Enron and Enron-like episodes, to re-define corporate responsibility. As guest editor of the Economic Times, Mr. E. Neville Isdell wrote:

“The future of a 21st Century company is tied to the health of our communities and our planet. Some leaders may consider sustainability work to be in a company’s “enlightened self-interest”. I disagree. In ways that will determine our ability to achieve consistent, global growth and profitability it is quite literal self-interest”

Editorial, March 17, 2008.

All researchers on sustainable development should sit up and take notice of this new twenty-first century corporate model for sustainability provided by Isdell. To explain briefly, water is the main ingredient in Coca-Cola; and lack of public access to clean water is a serious problem in many communities where Coca-Cola factories are functioning. Hence the objective of the Coca-Cola company has been to return water used in its manufacturing processes safely to the environment; the company supports more than 100 community water projects in 40 countries. In India the company is installing more than 100 rain harvesting structures in 17 states.

This is in sharp contrast to the colonial regimes which facilitated rapacious exploitation of natural resources which benefited only the multinationals and the colonial powers leaving the community in the lurch. Copper mining in Zambia and gold mining in South Africa are instances in point.

To cite one more recent example, some multi-national banks are making it clear to their borrowers that lending to industries with polluting technologies will attract higher rates of interest. This new awakening among the private corporate sector companies and financial institutions augurs well for sustainable development. Community-centredness has to be super-imposed on the private businesses.

I may add that even in today’s India, some policy makers seem to have remained slaves to the ghosts of Milton Friedman, whom Isdell quotes at the beginning of his Editorial:

“There is one and only social responsibility of business – to use its resources and engage in activities designed to increase its profits”.

Let us hope that the Isdell model will help both the private sector and public policy makers to unlearn Friedman.

Empirical Experience

As this point it may be useful to raise the question: Does the empirical experience of countries which have recorded sustained high growth in recent years – recent in the sense after the classic industrial revolution – offer any lessons for us? As you know, about a dozen economies, both large and medium size, witnessed an average GDP growth of 10 or nearly 10 per cent sustained over a decade.5 These include China, Singapore, Japan, Taiwan, Thailand, South Korea, Portugal, Greece and Hongkong. Among these economies, four or five sustained growth of around 9 per cent for two decades or so. One of the critical elements in facilitating such sustained high growth was high investment in infrastructure. What is of paramount importance is the upgradation of infrastructure, both physical and social, particularly in power, roads and ports. A corrolary of this requirement is mobilization of massive amounts of capital by both, private and public sectors.

Community-Centredness

Overall, it is clear that community-centerdness holds the key to sustained development of the economy, whether we think in terms of public policy formulation or guidelines for functioning of private companies. Undiluted market theology, expounded by the IMF and the World Bank, which in the past has shaped policies in many developing countries, has thus to be tempered by this larger concern for the community as a whole.

¹ Abridged version of the keynote address delivered by the author in a conference on sustainable development organized by the Indira Gandhi National Open University, New Delhi.

This is the edited version of the Keynote Address, given on 26th March 2008 at the International Conference on “Issues in Public Policy and Sustainable Development”, organised by Indira Gandhi National Open University, New Delhi.

REFERENCES

• Environmentally Sound Technologies for Sustainable Development in India, Professor U. Sankar, paper presented at the Conference (2008)
• Our Common Future, World Commission on Environment and Development (WCED), Oxford, 1987.
• Inclusive Growth, N.A. Mujumdar, Academic Foundation, New Delhi, 2007 and Main-stream Development Economics and the Eleventh Plan, N.A. Mujumdar, Economic Developments in India, Volume 116, 2007, New Delhi.
• See the Review of the book: Gandhian Way: Peace, Non-violence and Empowerment, in Indian Journal of Agricultural Economics, October-December, 2007, page – 700.
• Economic Survey, 2007-08, Government of India, February 2008, New Delhi, page-18.

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