Nepal finds itself at a critical juncture in its economic journey, where it must break away from outdated models and embrace a new way of thinking to achieve inclusive prosperity. Traditional economic approaches, solely focused on GDP growth, have proven to be inadequate in addressing the complex challenges the nation faces.
Hence it is time that Nepal should take a leap for a transformative paradigm shift based on the principles of doughnut economics. It is a holistic framework that places social equity and environmental sustainability at the core of economic policymaking.
By prioritising these values, Nepal can unlock its economic potential and pave the way for a prosperous and inclusive future.
Understanding doughnut economics
Doughnut economics, coined by renowned economist Kate Raworth, presents a new vision for the 21st-century economy. The concept revolves around two fundamental boundaries—a social foundation and an ecological ceiling.
The social foundation refers to the minimum standards of well-being that all individuals should have access to, including basic needs like food, water, education, and healthcare. The ecological ceiling represents the planet’s environmental limits, beyond which we risk causing irreversible damage to the Earth’s ecosystems.
The area between these two boundaries, often referred to as the doughnut, is a safe and just space for humanity. It represents the space in which societies can thrive without exceeding the Earth’s capacity to regenerate resources or absorb waste.
By aligning economic activity within this safe and just space, countries can create an economy that ensures no one falls short on life’s essentials while respecting planetary boundaries.
Redefining success
Shifting away from the sole reliance on GDP as a measure of success, Nepal can develop its own comprehensive well-being index, as inspired by Bhutan’s Gross National Happiness (GNH) index. This index would go beyond material wealth and encompass factors like education, healthcare, income distribution, social cohesion, and environmental conservation.
By measuring and evaluating these aspects, Nepal can gain a more comprehensive understanding of its progress and focus on achieving genuine well-being for its citizens.
Holistic economic models, as seen in Denmark and New Zealand, demonstrate the effectiveness of aligning economic growth with social well-being and environmental sustainability. Following their examples, Nepal can prioritise renewable energy sources, invest in sustainable urban planning, and establish robust social welfare systems.
This approach fosters a thriving economy that benefits all citizens while minimising environmental impact. By learning from these countries, Nepal can achieve high levels of social cohesion, economic prosperity, and environmental sustainability.
Nurturing human nature and inclusive growth
Nepal’s unique cultural fabric, rooted in communal values and interdependence, provides an opportunity to foster inclusive economic growth.
Investing in the well-being of its people, as demonstrated in Norway and Sweden, will empower marginalised communities and drive sustainable economic growth. Access to quality healthcare and education can improve overall quality of life and enhance productivity and economic resilience.
System thinking offers a powerful framework for shaping Nepal’s economic future. By learning from Germany’s Energiewende initiative, which integrates renewable energy sources, energy efficiency measures, and socio-economic factors, Nepal can address social equity, economic stability, and environmental resilience while driving sustainable economic growth.
Promoting equity and regenerative design
Addressing inequality through progressive tax policies and promoting regenerative design principles, as seen in the Netherlands, can contribute to a more inclusive society and unlock Nepal’s economic potential.
Sustainable tourism, eco-friendly agriculture, and circular economy practices can be instrumental in preserving the environment while driving economic growth.
Unleashing Nepal’s economic potential demands a fundamental shift in mindset and approach. Doughnut economics provides a holistic framework that emphasises social equity and environmental sustainability, paving the way for inclusive prosperity.
By redefining success, embracing holistic models, nurturing human nature, adopting systems thinking, promoting equity, and transitioning to a post-growth mindset, Nepal can create an economy that benefits all its citizens and ensures a prosperous and resilient future for generations to come.
This transformative journey calls for visionary leadership, comprehensive policy reforms, and collective efforts from all stakeholders to achieve a brighter future that harmonises economic progress with social well-being and environmental stewardship.
