Doughnut Economics:: Working Towards Environmentally Sustainable Growth
BY AALIYA BUKHARY/ NOVEMBER 25, 2023
India struggles to align economic growth with poverty reduction, however, Kate Raworth's innovative Doughnut Theory provides a path toward a more sustainable and equitable future addressing the limitations of India's growth-centric approach.
n indicator of efficiency in any system is the measures taken to replace its obsolete features. Outdated policies, especially in a country like India, where major policies are at least fifteen years old, hinder the path of creating an environment that allows its citizens access to basic welfare necessities. Therefore, the need of the hour is to replace them.
A
Socially, politically, and financially, we are still stuck with the pervasive desire for growth.
Yet, 20th-century economics in the 21st century continues to focus on economic growth. It is seen and promoted as a one-size-fits-all solution to various problems. Multiple economic research organisations argue that striving for GDP growth automatically resolves the wealth disparity in a country rife with poverty. In this regard, aiming for higher economic growth can elevate the standard of living of the people in a country. Therefore, development is categorised as a by-product of GDP. By and large, it has become the very lens through which we define the criteria to appreciate the performance of the government, its schemes, its policies, and the condition of the world. Socially, politically, and financially, we are still stuck with the pervasive desire for growth.
Adhering to that logic, since India is the fastest-growing economy with a growth rate of 7.2% in the year 2022-23 (PIB Delhi), it has no cause for concern. Undoubtedly, the steep rise in GDP and the fact that India is Asia’s third-largest economy potentially solves the deep-rooted welfare problems (MOSPI, n.d.). Lack of water, food, health and education infrastructures can seemingly be solved by merely focusing on more economic growth. Yet, according to The Hindi Bureau, India ranked 161 out of 180 countries on the World Freedom Press Index. As for the Human Freedom Index, 112th out of 165 countries (Fraser Institute, 2023). The growing Indian economy has been failing to be congruent with a decline in poverty rates for a long time. Looking back at the early eighties, rapid growth and high per-capita income were accompanied by India’s increasing absolute poverty levels (Bhalla, 2019).
​
Pictured: Illustration by Iker Ayestaran
Alarmingly, the Indian government has effectively stopped measuring poverty levels after 2011-12, and no reliable data is available for the past decade. Although official numbers are absent and silent, research papers by the World Bank suggest that extreme poverty rates are, in reality, higher than had been estimated earlier (Sandefur, 2022).
What many fail to notice is the inherent contradiction present within this idea. Nothing but focusing on resolving the disparity and directly attempting to redistribute resources can be productive. Contributing to the growth of a capitalist system that is the root cause of such disparities will never help people have ‘equal’ access to necessities.This indicates the existence of a faulty yardstick if not a larger failing and obsolete framework within which these policies function.
This indicates the existence of a faulty yardstick if not a larger failing and obsolete framework within which these policies function.
Kate Raworth addresses this question in her Doughnut Theory, which developed upon the foundations of several schools of economic thought and extended beyond a mere amalgamation of these multiple frameworks. Raworth built the theory in 2012 but elaborated upon it in her 2017 book, ‘Doughnut Economics: Seven Ways to Think Like a 21st Century Economist’. She defines the theory as a ‘compass’ for humanity, aiding us in navigating the ways in which economic growth needs to be a more holistic term and consider both ecological limits and social necessities (DEAL, n.d.). The reality is that unchecked growth of an economy is harmful for the planet; something that is simply seen as collateral damage. Yet, Raworth realises that this aim of economic growth differs for different countries and their socio-economic realities. She does not suggest that growth as a goal be discarded altogether. Her proposal aims to make twelve social foundations accessible to all. Namely, “water, food, health, education, income & work, peace & justice, political voice, social equity, gender equality, housing, networks, and energy” (Ankenmann, 2023).
​
The lack of these represents the inner hole of the doughnut, where no person should ideally exist. Economies, especially those still ‘developing’ must first and foremost focus on avoiding being trapped in the inner circle. This is because Raworth shifts weightage from exponential expansion to prolonged satisfaction. The only way these circumstances can be achieved is if these necessities, as she defines, are available to all.
Then, there is the ideal green zone, the palatable part of the doughnut. Here is where the sustenance of the economy comes into play; immediate for ‘developed’ economies, and an end goal to work towards for the rest of the world. It is where everyone has their basic needs met, without disturbing the ecological balance. The desire to expand this palatable zone further leads to ecological offshoots beyond the outer limit of the doughnut. The planet already experiences the risks mentioned in the outermost area in the forms of climate change, ocean acidification, land conversion and more.
​
​
Being efficient in the allocation of resources and doing so in a way that carefully considers the growing burden on the ecosystem might seem idealistic in nature. This may make the Doughnut model of economics seem like a mere theoretical possibility. Looking at the case of Amsterdam, it seems that the possibility is closer to reality than one might expect. It is even more astonishing when one realises that the adaptation of this model emerged amid the COVID-19 pandemic, in an effort to repair the damages faced by the economy. Following a step towards sustainability, Amsterdam has been using low-emission fuel boats to support the construction of entire islands.
Pictured: Illustration by Davide Bonazzi
The foundations were laid using processes that don’t hurt local wildlife or expose future residents to sea-level rise. Its future neighborhood is designed to produce zero emissions and to prioritize social housing and access to nature. Beach Island embodies Amsterdam’s new priority: balance, says project manager Alfons Oude Ophuis. “Twenty years ago, everything in the city was focused on production of houses as quickly as possible. It’s still important, but now we take more time to do the right thing.” (Nugent, 2021)
Further, Amsterdam's harmful denim industry has several repercussions. Housing the highest number of denim brands worldwide, the pollution caused by the chemicals required in the manufacturing process is not something that can be taken lightly. The new ‘Denim Deal’ attempts to curb the ecological consequences to align with the Doughnut Model. It is a remarkable plan brought about by suppliers and others agreeing to produce 3 billion garments from 20% recycled material by this year. It was followed by the realisation on the part of the policymakers about the very nature of outdated economic viewpoints, that Raworth has been emphasising.
A natural course in the exploration of this theory is its direct application to the Indian context. All forms of policy changes introduced must keep in mind India’s lack of uniformity, both in terms of socio-economic factors and the environment. Unlike other countries that have attempted to adopt this model, such as Australia (Melbourne) and Belgium (Brussels), the need for the political will of leaders and active citizenship is central. That is exactly what happens when this theory is reimagined in the shape of a Jalebi! The centre of this model becomes different because:
​
It is crucial that the political will bends and curves back to priorities other than GDP growth to ensure human prosperity. To facilitate this bend, citizens have to adopt and savour the jalebi. Vote, eat, commute, organise and volunteer, keeping the model at the centre of decision-making. The jalebi also highlights how humanity is interconnected. Communities must nurture this interwoven structure to offer solidarity and aid in a crisis. (Gulati, 2023)
Pictured: Illustration by unknown
With the jalebi, it is easy to trace the origin of the ecological off-shoots and frame possible solutions at the core. Largely this way, the extreme effects of humanity's ambitions can be curbed, widening the scope of India’s development.
More than ever, the Indian economy needs to set goals beyond GDP. Perhaps, changing the shape of the original Doughnut to address this becomes more representative of Raworth’s goal. Doing so will emphasise circling back to the root that can bring about a change in our socio-political frameworks. With the jalebi, it is easy to trace the origin of the ecological off-shoots and frame possible solutions at the core. Largely this way, the extreme effects of humanity’s ambitions can be curbed, widening the scope of India’s development.
.jpg)
After all, in the words of Amsertdam’s Deputy Mayor Van Doormick, “Economics is a social science, not a natural one. It’s invented by people, and it can be changed by people.” Raworth’s idea of a global system that lives to thrive may be achieved by understanding economic frameworks in relation to the people they affect, as opposed to trivial stepping stones towards a larger, better, shinier reward - a high GDP.
Pictured: Illustration by unknown
Keywords
​
doughnut economics, wealth disparity, sustainable growth, increasing poverty rates, resource allocation, ecological balance,economic expansion.
​
References
​
Ankenmann, J. (2023, June 10). Some cities are walking away from GDP growth to focus on people and planet. The Carbon Almanac.
​
Bhalla, S. (2019, January). Growth and Poverty in India – Myth and Reality. SSB. http://ssbhalla.org/paper/growth-and-poverty-in-india-myth-and-reality/
​
DEAL. (n.d.). About Doughnut Economics. DEAL.
https://doughnuteconomics.org/about-doughnut-economics
​
Fraser Institute. (2023, January 26). Human Freedom Index 2022.
https://www.fraserinstitute.org/studies/human-freedom-index- 2022#:~:text=Selected%20jurisdictions%20rank%20as%20follows,)%2C%20China%20(152)%2C
​
Gulati, T. (2023, June 14). A Picnic: Doughnut, Jalebi, Economics, the Planet and Humanity. Talk Dharti to Me.
https://www.talkdhartitome.com/post/a-picnic-doughnut-jalebi-economics-the-planet-and-humanity
​
Marchese, D. (2022, July 21). This Pioneering Economist Says Our Obsession With Growth Must End. The New York Times.
https://www.nytimes.com/interactive/2022/07/18/magazine/herman-daly-interview.html
​
Ministry of Statistics and Programme Implementation (MOSPI). (n.d.). India GDP Annual Growth Rate - 2023 Data - 2024 Forecast - 1951-2022 Historical. TRADING ECONOMICS. https://tradingeconomics.com/india/gdp-growth-annual
​
Nugent, C. (2021, January 22). Amsterdam Is Embracing a Radical New Economic Theory to Help Save the Environment. Could It Also Replace Capitalism? Time.
https://time.com/5930093/amsterdam-doughnut-economics/
​
PIB Delhi. “PRESS NOTE ON PROVISIONAL ESTIMATES OF NATIONAL INCOME 2022-23 AND QUARTERLY ESTIMATES OF GROSS DOMESTIC PRODUCT FOR THE FOURTH QUARTER (JANUARY-MARCH) OF 2022-23.” Press Information Bureau, Government of India, 31 May 2023, https://pib.gov.in/PressReleseDetailm.aspx?PRID=1928682#:~:text=The%20growth%20in%20real%20GDP,growth%20rate%20of%2016.1%20percent.
​
Sandefur. (2022, April 19). The Great Indian Poverty Debate, 2.0. Center for Global Development | Ideas to Action.
https://www.cgdev.org/blog/great-indian-poverty-debate-20
​
The Hindi Bureau. (2023, May 4). India slips in World Press Freedom Index, ranks 161 out of 180 countries. The Hindu.
​
​
​
​
DISCOVER MORE STORIES
Aging gracefully or grudingly? India's demographic dillema
NOVEMBER 4
BY AANYA TANDON
​
Discovering the impact of Conglomerates in Nation building
OCTOBER 7
BY BHAVYA SINGH
Exploring the Parenthood Dilemma
OCTOBER 4
BY URMILA UDHALIKAR
The views published in this journal are those of the individual author/s and do not necessarily reflect the position or policy of the team behind Beyond Margins, or the Department of Economics of Sophia College for Women (Autonomous), or Sophia College for Women (Autonomous) in general. The list of sources may not be exhaustive. If you’d like to have the complete list, email us at beyondmarginssophia@gmail.com