Since the stock market collapse of 2000, the world has transitioned from one crisis to another. When faced with the post-dotcom recession of 2002, America chose to borrow its way out of the slump. As the events of 2008 proved, that was a futile quest. The reason became obvious to any impartial observer of these events: America attempted a superficial cure to an aliment in urgent need of surgical intervention. In other words, America attempted to cure its economic ills, without seriously addressing fundamental structural inconsistencies, which had rendered its 20th century economic model outdated if not obsolete.
The ‘NATO’ Model:
What was this model, which had served western economies so well? And why had this proven model, suddenly failed its most fervent and skilled proponents.
This model (Let’s call it the NATO model as the NATO alliance was its most accomplished practitioner) was based on 4 basic tenets:
1. A Free market
2. Abundant supply and unrestricted exploitation of natural resources
3. Widespread availability of easy credit
4. Rapid and frictionless adoption of modern technology
The success of this model unleashed a multitude of global politico-economic forces, which in turn hastened the demise of alternate socio-economic models such as communism. With each‘success’, this model acquired new adherents and followers.
Nations across the global customized it to best suit their peculiar local conditions with spectacular results: Japan in the 70s and 80s,Asian tigers in the 80s and 90s and China over the past 2 decades.What was seldom recognized let alone acknowledged was that this NATO model came with a fundamental prerequisite: A healthy balance between demand and supply of the limited natural resources.As the global population rose rapidly and adopted this model, the growing imbalance between demand and supply came into a sudden and sharp contrast. The surge in demand for a limited pool of natural resources was so widespread and concurrent, that the world was caught napping. (Ex: Oil at $145 per barrel)
As often happens, this prolonged success (of the NATO model) also helped breed a vast empire of vested interests whose very survival depended on the perpetuation of this Model; Oil industry being the poster child of this collection of vested interests.The past 12 years have conclusively proven that demise of this model is a matter of ‘when’ not ‘if’. Measures such as opening up more markets, pumping global markets with even more easy credit, will only postpone the inevitable.
An unruly, haphazard, un-managed process of deracination and replacement will lead to global chaos, as evidenced by continuing economic turmoil in Europe and its political twin in the Middle East. If this demise is imminent, if it is upon us, what will replace it?
What should replace?
Gujarat under Mr. Modi’s able management may have provided the proof-of-concept for this new paradigm.Gujarat has presented a perfect test environment for testing and deploying this new development model. We can call it the ‘NAMO’ Model.
Gujarat is a region where scarcity of water and other natural resources has historically led to the typical issues:
1. Increased migration of labor from rural to urban centers
-Leading to urban decay, congestion and break down of essential services
2. Over exploitation of ground water
3. Import of expensive fuel based energy
4. Over dependence on heavy industry and trading
5. Perpetuation of unproductive economic activities such as tanker based water supply.
One could argue that these factors are prevalent in vast majority of regions around the world. However, by following a new developmental model Gujarat may have shown us the way. Moreover, this model is replicable and adaptable for the vast majority of developing countries and in some aspects can also help address growing problems in the developed world.
Though the ‘Modi Miracle’ in Gujarat may appear to be a string of discreet, disjointed programs, there’s a common theme that binds these together. From water harvesting and conservation to solar power generation and broadband connectivity to rural education and skills training, the ‘Modi Miracle’ is an integrated approach that aims to strike a balance between rapid economic development and environmental exploitation. Most importantly this model of development takes into account local factors, reducing the threat of deracination and dislocation which in turn preserves the cultural moorings which have served the local populace well for centuries.
At the heart of this revolutionary developmental methodology is the concept of Rurban. Rurban is as much a vision as it is an initiative. It is based on the principle of ‘Aatma Gam Ni, Vikas Sheher Nu’ which roughly translates-with the facilities associated with any world-class city, preserving the rural character of our villages.
Its brilliance lies in the simplicity of the concept. Given the right combination of tools and opportunities, Gujarat’s rural population (as any other people) would prefer enriching the land of their birth,rather than taking the risk of finding a place in the sun on the over-congested streets of India’s decaying urban landscape.
As we shall see in the subsequent parts of this series, Mr. Modi has developed a template that will allow developing nations like India to leverage latest technological advances to circumvent and leap frog errors made by the developed world. Moreover, this process will help accelerate growth without imposing the same environmental cost incurred by developed nations over the past 5-6 decades.
Jyotigram- Electrifying 18000 villages of Gujarat
Shri Narendra Modi to address Public Meeting in Vadodara, Gujarat
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