Need for a New Economic Order
Shariq Us Sabah
The Anti Globalisation sentiment has taken the utmost primus. Artificial Intelligence (AI) is being criticised for an innovation that will take millions out of jobs. Cryptocurrency is viewed with the prism of security issues, and, populism is taking over the stage. Economists have no suitable solution to better education, improve healthcare, and eradicate poverty. Policies are marred by administrative challenges, and, the bureaucracy is already enough obsolete. The last decade has witnessed several dramas. We have seen our world lurch from one crisis to another; financial disasters, famines, energy shortages, ethnic violence, environmental catastrophes, military conflicts, floods of refugees, rising political instability, the bloodbath for territorial and economic autonomy, amongst others.
How do we fix the pressing issues of Unemployment, Poverty, Education, Health, Inequality, Climate Change, and severe Pessimism? We need to meet the three-pronged challenge, to make the development equitable, sustainable and permanent. What is the most viable alternative?
With Corporate Social Responsibility (CSR) in place, the government brought the private players to the forum of partners in societal responsibility. Businesses benefit from the society and hence have shall invest in making the society more opportunistic. A Society with several opportunities will build an environment which will make space for businesses to gain more profit. So technically, CSR will not take away the share of profit but will strengthen the economic structure in a manner that businesses will get to expand their area of functioning and multiply the profits. CSR is seen as a long-term investment and it also helps ease government’s fiscal burden and incentivizes the business to acknowledge that the social growth will lead to economic growth, which will, in turn, boost economic profit. The role of CSR is however limited, as a majority of companies do not contribute to CSR or route the funds of CSR in a manner that it never reaches the pressure group. What needs to change now is the attitude that Businesses need not all be about making money, but also provide solutions to people’s problems. There is an increasing number of businesses interested in the development of social businesses.
Technology has the power to deliver. Several innovations in technology are long due. Rising technology, digital innovations, and falling cost to own a profile on social media has led to rising aspirations. Innovations in technology have the potential to bridge inequality. However, I see innovators failing to grasp the total impact of their innovations, which is leading to inequality. While AI can be used to make education and healthcare delivery more scientific and more precise. AI innovators are making a case to replace humans with machines. Going by the argument and keeping all other factors constant, AI has the potential to severely boost unemployment. Innovations such as cryptocurrency and community finance have the possibility of helping unemployed youth identify new endeavors.
Unemployment cripples the economy. Calculated responses across the public and private sectors are needed to create more jobs and give young people the skills and confidence. However, both public and private sectors have reached the saturation point. Fresh policies to generate employment has a long gestation period. In such a scenario, we must turn to Entrepreneurship. It has the capacity to reduce the level of unemployment to a great extent. The domestic sentiment is weak, the global market is poised with uncertainty, the global talk is turning towards protectionism, and in such scenario, entrepreneurship can become the gateway to bridge the level of unemployment. Entrepreneurship has a clear role in nurturing the next generation of wealth and job creators. It is very challenging to address the youth unemployment problem. Entrepreneurship is one amongst the range of responses need to address the problem. Short-term Macroeconomic and medium-term fiscal policies are needed, these policies are needed to be supplemented with skill development, and making education a heart of entrepreneurship. Then will an environment be created which will help the dreams of million stranded in the economy in search of jobs be fulfilled.
Climate change is being adequately talked about but is not sufficiently addressed. The conundrum that developed and developing countries are encountering is immature. Climate change affects everyone equally. New York City in the USA is equally under threat as Chittagong in Bangladesh. Their preparedness may be different, and the net loss may be incomparable, but, no preparedness is enough to challenge the wrath unveiled by nature. Risk mitigation is the need of the hour. Clean fuel, green technology, low carbon emissions, solar and wind energy are various proposed ways to take care of the rising celsius.
The economics today needs to be re-envisioned. The response today is neither capitalism nor socialism, a midway, which is balanced, sustainable and feasible in the long run. We need to build economies that recognize that all humans are natural entrepreneurs, where a majority are not best served by jobs, but best served when they can venture into the marketplace. The challenge before developing countries like India is multifold, but, the opportunities are also plenty. India can sketch its growth story in a manner which is green, inclusive, clean, sustainable, environment-friendly. Developing nations are better positioned to adapt than many advanced economies, precisely because they are more of a blank slate.