Some Reflections from Day 1
First of all, it was great to see so many familiar faces, old friends, and fellow alumns of previous young leaders fora. Over the years, this has become one of the great benefits and pleasures of being part of the young leaders network. Kudos to everyone working hard in the background to make this all happen for us here in Buenos Aires!
I wanted to share my key takeaways from one of the afternoon roundtable sessions on the meaning and implications of “Quality Growth”, which also included a discussion on the importance of Happiness in society. As a former McKinsey colleague of mine recently joined the Kingdom of Bhutan’s very own Ministry of Happiness, I was keen to find out more on the topic during the roundtable discussion.
It was a candid and lively session hosted by Prof. Ming-Yu Cheng from Malaysia. She drew on her own research on this topic, including insights from her work with the World Economic Forum, to solicit additional inputs and perspectives.
When I came across this term earlier this morning, it conjured up other oxymorons and euphemisms in my mind like “Quality Time” with family and friends, which should be a familiar concept for all us “busy people” attending the forum. Kidding aside, was “Quality Growth” – one that by some definitions also ensures sustainability, inclusiveness, equality, and happiness – even possible or just a pipe dream of rich(er) economies that could afford it?
Don’t get me wrong. On paper, Quality Growth of course makes sense. The pursuit of growth can’t just be about pure materialism in terms of bigger paychecks and bigger cars and bigger houses to match. I figure, if you uplifted China and India to the per capita energy consumption and industrial output levels of North America, we would soon have to find a new planet to live on. So is there a way to pursue some reasonable rate of economic growth while respecting the environment, basic human rights, and the overall pursuit of happiness?
The discussions came up with themes along the familiar lines of how to measure growth, what the reasonable growth rate would be, and if growth even made sense as a primary metric at all. After all, hasn’t the relentless focus on GDP growth fuelled the exploitation of natural resources and other factor inputs, especially in many developing countries? There are endless examples of deforestation, poisoned rivers, forced labor, and other man made disasters that underline this point.
However, the tradeoffs and values related to economic growth are often very contextual, especially when we look at it from a developing vs developed market perspective. What a developing economy might view as a legitimate and fair price to pay to drive growth, alleviate poverty, and ensure the basic survival of its citizens in many cases, will surely be viewed very differently in developed markets, where aspirations and ideals have gone way beyond serving the basic needs of society. You can say many things about China and it’s economic policy agenda, but by some measures there has also been no other country in history that has uplifted so many people from poverty within such a short time frame.
We have seen the opposing perspectives on “Quality Growth” most blatantly in the very closely linked and on-going debate on climate change and greenhouse gas emissions targets. Many developing economies view these proposed restrictions as outright efforts of the industrialized world to limit or deny their legitimate right to economic growth and undermine their competitiveness. After all, some might argue that it isn’t too long ago when industrializing and former colonial powers deployed the very same growth and expansion tactics that they frown upon today. Of course, this is painting it a bit black and white, but there are clear polar opposites on the question of “Quality Growth”.
On top of that, it would also be foolish to put all developed countries into one bucket on this topic. The Rhineland-type social market economies of continental Europe are quite different from Anglo-American free market economies, and both camps would surely have very different definitions of “Quality Growth”, especially when it comes to the role of central government, regulation, taxation, and private sector target-setting. It’s hard to find consensus on this topic even among the league of advanced economies.
So at least in my mind, there is not yet a clear answer to the question of what “Quality Growth” really means, not to mention how to measure it. Far more experienced economists, researchers, and policy makers are working on the issue, as witnessed during the World Economic Forum. The best I layman answer I can offer at this stage is a somewhat unsatisfactory (and typical consultant’s) answer: “It depends”.