Monday, April 9, 2012
Bhutan leads the world to a new economy of happiness
We have seen the power of disruptive technologies and companies, but are we now witnessing the birth of disruptive countries?
The world's industrial powers, like major companies, are locked into the current destructive economic system and are unwilling to make more than incremental changes to address the enormous ecological and social challenges of our age.
But coming to their rescue is the tiny Himalyan kingdom of Bhutan, which has a population of just 700,000. Bhutan, the only country that measures its progress by the level of happiness among its citizens, will next week host a conference at the United Nations in New York, with a grand ambition in mind.
It is seeking to convince the world to radically change global politics and economics, placing the emphasis on happiness and wellbeing, rather than growth.
"It may not be appropriate for a little country like Bhutan to dare to offer advice to the world," says the government before doing just that. "Continuous economic growth and expansion in our finite world is not a must. In fact, this global economic slowdown presents a great opportunity to give nature a rest ... to reduce stress, to have more free time, to become more secure and self-reliant, and to improve the quality of our lives."
Wellbeing as a key economic measure
Not only does Bhutan want to present a new economic plan to the Rio +20 conference in June, but also build a global movement based around the creation of a new Bretton Woods agreement.
It says the architects of the original deal, which enshrined Gross Domestic Product as the global accounting system, did not consider the limits of nature's ability to support human activity.
Alongside the hope of a new future comes a stark warning: "We need nothing less now than a new sustainability-based economic paradigm, with new progress measures, accounting systems and regulatory institutions, if we are to save humanity and avert disaster. We have a narrow window of opportunity before it is too late."
Bhutan is doing its best to walk its talk. Four years ago prime minister Jigmi Y Thinley launched a gross national happiness (GNH) measure to guide public policy. The term was coined by Bhutan's former king, Jigme Singye Wangchuck, back in 1972.
Its constitution mandates that at least 60% of the country remains under forest cover in perpetuity and its stated policy is to be 100% organic in its agricultural production. Life expectancy has doubled in two generations and 99% of primary-age children are in school.
Bhutan's enormous ambition, which centres on inviting world leaders to the Himalayan kingdom in 2014 to adopt a renewed Bretton Woods agreement, appears to be causing some tension with co-collaborator Jeffrey Sachs, director of the Earth Institute at the University of Columbia, who has become an advocate of wellbeing as a key economic measure.
While Sachs agrees with Bhutan's assessment of the state of the world, arguing that "the mad pursuit of corporate profits is threatening us all" and that America's economic system has led to a "society that is designed for addiction", his ambition appears to be more limited, arguing for happiness to be included in the UN's sustainable development goals (SDGs).
Whatever the outcome, Bhutan has clearly touched a nerve, as more than 600 politicians, economists, academics and spiritual and faith leaders from around the world will be taking part in the UN conference including Secretary-General Ban Ki-moon. Prince Charles is sending a video address.
Living in harmony with the natural world
The Bhutan government says its idea of happiness "has nothing to do with the common use of that word to denote an ephemeral, passing mood – happy today or unhappy tomorrow due to some temporary external condition like praise or blame, gain or loss. Rather, it refers to the deep, abiding happiness that comes from living life in full harmony with the natural world, with our communities and fellow beings, and with our culture and spiritual heritage, – in short from feeling totally connected with our world.
"And yet our modern world, and particularly its economic system, promote precisely the reverse – a profound sense of alienation from the natural world and from each other. Cherishing self-interest and material gain, we destroy nature, degrade our natural and cultural heritage, disrespect indigenous knowledge, overwork, get stressed out, and no longer have time to enjoy each other's company, let alone to contemplate and meditate on life's deeper meaning."
The draft communiqué from next week's UN meeting argues that GDP not only fails to bring us happiness but is actually speeding up our trajectory towards devastating climate change, ecosystem degradation and biodiversity loss.
It states: "These measures largely ignore the value of natural and social capital and the distribution of wealth and income. They misleadingly count natural capital depletion and many human and social costs as economic gain. The architects of Gross Domestic Product (GDP) themselves counselled that GDP should never be used as a measure of welfare, as it incorrectly is today."
In fact, the first data from a new "inclusive wealth indicator" shows that between 1990 and 2008, the wealth of Brazil and India as measured by GDP per capita rose 34% and 120% respectively, yet natural capital, the sum of a country's assets, from forests to fossil fuels and minerals, declined 46% in Brazil and 31% in India over the same period.
"The work on Brazil and India illustrates why Gross Domestic Product is inadequate and misleading as an index of economic progress from a long-term perspective," says Professor Anantha Duraiappah, executive director of the United Nations University International Human Dimensions Programme.
A fresh approach?
While Bhutan's critique of the current economic system is seeping into mainstream thinking, some of its proposed solutions feel refreshingly new.
On the issue of wellbeing and happiness, it talks of nurturing the values, wisdom, and practice of our spiritual traditions, as well as drawing on indigenous values and knowledge to develop appropriate policies.
Beyond this, the draft communiqué recommends a broad range of policy measures to support moves towards a sustainable global society.
It talks of empowering women and educating girls, supporting local economies and strong community networks, strengthening social supports through family, community, and workplace and promoting vibrant, critical, creative and responsible media.
For ecological sustainability, the document recommends investing in sustainable infrastructure, such as renewable clean energy, and introducing taxes and cap and auction systems to reduce greenhouse gas emissions and resource depletion. It also demands the dismantling of incentives towards excessive materialistic consumption, including banning advertising to children.
To encourage social justice, the draft communiqué says there is a need to prevent the private capture of common wealth, to support and incentivise co-operative ownership, embed fair trade systems, and transfer technology to enable lower-income nations to help them rapidly shift to sustainable production methods.
To prevent the further rapid depletion of resources, it calls for the development of full-cost accounting measures to internalise externalities through the valuation of non-market assets and services, the reform of national accounting systems, and ensuring that prices reflect actual social and environmental costs of production and distribution.
It further seeks to penalise unsustainable behaviours that diminish collective wellbeing, including introducing ecological tax reforms with compensating mechanisms that avoid additional burdens on low-income groups.
Addressing the short-termism of the financial markets, it calls for the reduction of speculation and ensuring equitable access to credit.
The need for a collective effort
Given Bhutan's Buddhist heritage, it is not surprising that its philosophy is based on the idea of inter-being. While it is seeking to achieve its own sustainable development, it recognises that it will fail if it does not help convince the rest of the world to change.
"Every nation is a part of a much larger world bound together by a common future and fate indeed," it says. "No single country can reap the full benefit of adopting and implementing the new sustainability-based economic paradigm, unless all of humanity acts collectively and in harmony as one community. Surely, our past failures and our present tears will give us cause to do so."