Besides working as economic advisor to former Chinese Premier Zhou Rungji, Brahm has acted in the capacity of a counselor on enterprise and financial reform issues in Vietnam and Laos. As the Occupy movement and the idea of Himalayan Consensus gains momentum and discontent against the existing global financial structure grows, Kosh Raj Koirala of Republica caught up Brahm at East-West Center, Honolulu, Hawai’i. [break]
EXCERPTS
Why are you advocating for the idea of Himalayan Consensus?
We need a new consensus. The Washington Consensus is discredited. The neo-liberal “market fundamentalism” was built on the Adam Smith concept that the “invisible hand” (greed) will bring equilibrium to all markets. It does not. The 2008 meltdown of Wall Street and subsequent global recession underscores this. People are motivated by more than just greed. Community, sustainability, identity and concern for the environment all count.
Himalayan Consensus is a broader economic paradigm that seeks lessons from the grass roots up; it believes in pragmatism not ideology. It is drawn from the great philosophies of the Himalayas: Hindu, Buddhist, and Islam, which value the community over the individual, the greater good over the self. So the assumptions are different to those of the neo-liberal model.
Himalayan Consensus calls for: 1) protecting ethnic diversity and local identity, 2) (through) sustainable business rather than aid; and calling for changes in our financial architecture to support the small, 3) business support for community development and environmental protection. Our planet is not sustainable the way it is being managed. So we need a new consensus.
How did this idea evolve?
It began with a social enterprise I founded in Tibet a decade ago. It involved ecological and heritage tourism reviving traditional crafts, empowering disabled and marginalized with jobs, skill transfer and self-identity. The tourism supports medical and education programs. It was our first Himalayan Consensus Community. But such approaches to sustainable development can be found across the region. The question is how to draw economic lessons, a model or paradigm from these examples.
Muhammed Yunus contributed to the idea with his experience of microfinance. Bhutanese PM Lobsong Thinley added the Gross National Happiness vision. Other NGO leaders in the region lent their experience. We had a consensus of development principles. Some call it “compassionate capitalism.” We call it Himalayan Consensus.
Do you really believe Himalayan Consensus will offer solutions to the problems facing modern world?
A Korean professor of mine visited our projects in Lhasa. He said, “Himalayan Consensus” is impressive, but not relevant for Japan and Korea. I agreed. But responded, “It is relevant for America, where we have multi-ethnic populations with complex diversity and growing pockets of poverty. Himalayan Consensus came from the mountains but it addresses problems with our global economy. Himalayan Consensus addresses the issue of scarcity and sustainability of our planet, not stimulating brand consumerism. That is not a solution.
It recognizes the power of small, community-based organizations in building local economies, bringing productivity back to the community in a sustainable manner. It calls for rational application of economics not theory. It calls for empowering people with skills and finance not just aid. Himalayan Consensus seeks a pragmatic approach that is conscientious.
How can Nepal fit in between two giant neighbors—China and India—under the framework of Himalayan Consensus?
There is an old Thai saying, “When the elephants fight or make love the grass gets trampled.” Nepal is between two giants. Maintaining good relations with both and peaceful co-existence will be the best policy. Don’t take sides. Both countries have things to offer.
With the dramatic rise of China and India, these nations have the capital and means to change the game. Unlike the Atlantic alliance—Washington and the capitals of Europe—the philosophies of China and India are different. They are more holistic, concerning the community over the individual. This is cultural. Yes, you can shift capital from New York and London to Hong Kong and Mumbai in a second. But the DNA of a people is something that has evolved over 5,000 years. So the approach of China and India to international affairs and the management of their own economies in relation to the global economy will be different. Enter a new consensus. Look at the Himalayas as a bridge not a barrier, a shared network of watershed and culture. Nepal is in between. It could be quashed if it takes sides, or become the Switzerland of Asia if it says neutral.
Do you think Himalayan Consensus will really offer an alternative to Washington Consensus? How are they connected?
We already are the alternative. It is like the Washington Consensus is the 1 percent and Himalayan and African Consensus are the 99 percent. You can think of it in these terms. The Washington Consensus was a set of theories about neo-liberalism and the power of greed. Today we call that “market fundamentalism.” Himalayan Consensus is about pragmatic economics viewing social responsibility and environmental protection as critical for business sustainability. They come from the ivory tower. We come from the street.
You have been arguing that Himalayan Consensus is neither a capitalistic nor a socialistic concept. Is it then pro-business?
“Pro” the right kind of business. Business profitability creates jobs. But the role of business should be in building communities not breaking them. Also big businesses have to take the lead in solving climate change. We need to find ways to make energy more efficient and renewable energy cost effective, even profitable.
Having worked as economic advisor to then Chinese Prime Minister Zhou Rungji, can you shed some light on how that experience helped
evolve the concept of Himalayan Consensus?
China adopted an independent economic approach, mixing planning with market. The first point is Himalayan Consensus calls for a fresh economic paradigm breaking from the traditional World Bank and IMF view of growth. China led by example, not following either but creating its own direction and policies. Secondly, China fused market and planning and developed its own managed market. These are two key principles of Himalayan Consensus. Throw out the theory and do what works.
The Himalayan tradition seeks a “middle road” between market and planning. Today there is no capitalism and socialism. This debate in ideologies went out in the last century. There is only pragmatism.
You have been very critical of World Bank and IMF policies and have also been actively involved in Occupy Wall Street movement. What do you think is the alternative financial structures that will equally benefit underdeveloped countries like Nepal?
Nepal does not need World Bank or IMF money. Open up certain sectors to foreign investment and control the sectors you are not ready to open yet. Bring in capital from neighboring countries who will invest. Evolve your core infrastructure, roads and power. Telecommunications as well—you have bright people and a tech industry could be in the making. Protect your natural resources and land because tourism is the best export. Ecology and heritage tourism can be sustainable as well as protect culture and diversity of your environment. Do not lose these things in the name of progress. Once lost, they cannot be brought back.
Since you have also counseled Vietnam and Laos on enterprise and financial reform, what recommendations would you like to make to policymakers and politicians in Nepal to improve its ailing economy?
China’s economic success grew from self-reliance and foreign direct investment. China adopted a relatively liberal policy; it did not seek aid or soft loans from World Bank, IMF or Asian Development Bank. Rather China shunned such support. Instead it focused on drawing direct equity capital into its industries, prioritizing sectors to be opened for investment. Particularly export processing, as exports build foreign exchange reserves, is critical in assuring Chinas economic independence. This strategy was well thought through.
How do you evaluate the investment opportunities in China and India? What can Nepal learn from them?
Nepal can learn a few things from China, which it has done better than India. Liberalize your foreign investment environment. Simplify the rules. Allow enterprises that have invested in Nepal to enlist in your stock market. Get China to invest in your road system and India into your high tech. Most important, seek consensus in your government and give the rest of the world confidence that struggle is a thing of the past and that you are committed to developing the nation without more political turmoil. This was critical in China’s transformation. The leadership was all united under one idea. Get China’s people out of poverty and make the nation rich. They did it.
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