Sustainable Development

Concepts of ecology and social responsibility were first discussed in the context of economic development in the book written by economists Barbara Ward and Rene Dubos entitled Only One Earth written for presentation at the United Nations Conference on the Human Environment in Stockholm in 1972.  The term is not synonymous with environmental conservation, as many believe, but actually refers to three development goals outlined by the Earth Summit of 1992: 1) economic growth, 2) environmental protection, and 3) social equity.  (Gould and Lewis, 2008, p.270).  The relative balance of these goals and a long-term decision making orientation is the matrix of sustainability.

Popularizing the term “sustainable development” was the Brundtland Report, also known as Our Common Future, written by the World Commission on Environment and Development (WCED) in 1987. It was defined as “development that meets the needs and aspiration of the present without compromising the ability to meet those of the future.”  Today, the common understanding of sustainable development is economic development that is both socially just and economically sound (Harris, p.1).

Agenda 21 (named for the 21st century) is a plan of action to be taken globally, nationally and locally by organizations of the United Nations System, Governments, and Major Groups in every area in which human impacts on the environment.  In 1992, the strategy was adopted by more than 178 Governments at the United Nations Conference on Environment and Development (UNCED) held in Rio de Janerio, Brazil.  The Commission on Sustainable Development (CSD) is charged with monitoring the implementation of the Agenda.

In January at the Shenzhen airport, a 10-year sales veteran at the Foxconn factory said to me, “I don’t know how you can call Shenzhen successful when the environment is so bad and workers don’t earn enough to live outside of the factory.”  His statement exemplifies how a judgment of success cannot be separate from a determination of sustainability.

Thomas Farole of the World Bank explains, “One of the main differences between zone programs that have been successful and sustainable and those that have either failed to take off or have become stagnant enclaves is the extent to which they have been integrated in the broader economic policy framework of the country” (Farole, p.9).  SEZs strive for catalytic impact.  They propose to be engines of change, but few are.  It is not enough for a zone to be a profitable economic node; it must also stimulate the local economy—to improve lives.

So then success is not necessarily sustainable, but sustainability is a goal that denotes success.  I am tempted to itemize three goals that would signify economic sustainability, social sustainability and environmental sustainability–but the danger is to misrepresent them as three separate entities when really these three spheres are interdependent and interrelated.  No one sphere may be considered sustainable without the other two also being in a sustainable state.  Characteristics of an economically sustainable condition reflect the responsible use of resources where human, natural and produced capital are not depleted but used in consideration of future needs and long-term goals.

These characteristics are the antithesis of the rapid growth strategy that propels SEZs.  SEZs were intended to be a contained experiment in open market trade and a short-term growth tool.  The expectation is that the zone boundaries would dissipate in time as the engine to the international market would merge with a stimulated local market.

The open market facilitated rapidly rising GDP and some people became rapidly wealthy and the boundaries never dropped.  Notions of steady state economics, a slowly growing stable economy (Daly 1991, p.17), were abandoned and a rift developed between markets and governments.  The goal of a stable, protected and limited economy supported by government was replaced by unfettered laissez faire economics that supports free trade.  The multinationals that comprise the market resent government restrictions because they limit profit.  An alluring trait of SEZs in LDCs is the notorious hands-off approach of host governments.  Fewer protections for labor and environment lead to more profit.  Studies have demonstrated a close relationship between air and water quality and the extent of government regulation in both wealthy and poor nations alike (Todaro, p.505).  The contrived dichotomy of market and government provide the rationale to ignore social and environmental considerations for greater economic growth, while presenting “development” policy as a short-term solution to pacify objections.  That unsustainable trajectory has run off course, as seen in SEZs globally.

A study of Shenzhen, the most renowned of all SEZs, reveals the market – government relationship dynamics as well as the social and environmental sacrifices made for rapid industrialization.  I will review SEZ policy in the three spheres citing specific effects of policy and enforcement.  Then, an examination of China’s national environmental policy provides a gauge to what we may expect from future policy in the zones.  A similar look at India’s environmental policy provides insight to the green SEZ proposal while offering counterpoint to Chinese methods.  The different methods of governance demonstrate the ways that homogeneous policy changes in different locations.  There are many examples of efficient environmental and social policy in India that have emerged from the bottom-up that are in contrast to Chinese policy that consistently emerges from the top-down, from central government to state owned enterprises (SOE).