Its approach can help countries on path to development, authors say

The authors of a landmark global analysis on the future of humanity are urging developing nations to consider the Chinese model for common prosperity in order to avoid regional societal collapse and dangerous levels of inequality.

In an exclusive interview with China Daily, Malaysian business leader Chandran Nair and Norwegian academic Jorgen Randers warned that economic systems based on unrestrained consumption are leading societies toward a cliff's edge.

They have collaborated with an international team of economists and scientists on a new analysis, outlined in the recently published book Earth for All: A Survival Guide for Humanity, which plots two scenarios for humanity. The two-year research project involved analysis of social tension and wellbeing indexes as well as data from a computer model of system dynamics.

In the bleakest scenario, called "Too Little, Too Late", the world continues as usual, with the same economic policies of the past 40 years. While GDP continues to grow, the rich get richer and the poor fall further behind, creating extreme inequalities and growing social tensions within and between countries.

Under this scenario, global temperatures reach around 2.5 C above pre-industrial levels by 2100, significantly exceeding the limits laid out in the Paris Agreement, with the poorest regions facing some of the most extreme conditions.

The team offered an alternative model for the future, which they call "The Giant Leap Scenario", in which societies adopt unprecedented and immediate action across a series of "interconnected turnarounds". Reforms to the international financial system could lift 3 billion to 4 billion people out of poverty, according to this model.

Gross inequality could be addressed by increasing gender equality and ensuring the wealthiest 10 percent take no more than 40 percent of national income, down from the current 50 percent. Additionally, major nutrition security and environmental improvements could be reached through transformations across food systems and the clean energy transition.

Randers, who co-authored the 1972 book Limits to Growth, which remains one of the top-selling environmental economics titles of all time, said that the Chinese system of governance is capable of resolving poverty "much better than any other system in the world".

"If anyone is going to save the world, it will be the Chinese, and it is by using a completely different economic model," he said. "The Chinese have solved the poverty problem, it is doable."

Randers refers to a series of economic and social reforms in China that have lifted about 800 million people out of poverty over the past 40 years. He said that the two essential ingredients for poverty alleviation are a strong and active state and funds.

"How can you find the funds? The simplest way is to tax the rich. But the second and much preferable way is the Chinese model," Randers said.

Randers said that the Chinese model is not accepted by Western economists, who prefer "neoclassical macroeconomics that further the interests of the current financial elite and are very unhelpful to the rest of the world".

To escape the perils of the business-as-usual scenario, Randers said nations should consider adopting a universal basic dividend, funded through nationalized resources.

"Take whatever resources you have — oil, fish, data, whatever — and sell it to businesses and take the money and hand it back to the people," Randers said. "This may seem a wild idea, but it has proved implementable in bits and pieces at different national levels."

He provided the examples of the state of Alaska in the United States, which has paid a dividend from oil revenues to all of its residents since the 1980s, as well as Norway, which has paid surplus fossil fuel revenues into a state pension fund since the 1990s.

Nair, who is founder of The Global Institute for Tomorrow, an independent think tank based in Hong Kong, said that developing nations should reject the modern Western economic model because "it is unsustainable".

"This is where China can be a leader. When there are difficult times, we can learn from past mistakes and create different economic models and redefine prosperity. That's where the Chinese common prosperity idea comes in," Nair said.