The financial system that doesn’t profit by undermining and destabilising human wellbeing, but actually serves society, the economy, and our common interests.
Source: Kate Raworth and Christian Guthier/The Lancet Planetary Health.
Our planet is under significant pressure. We are currently living in the Anthropocene, and while this process began during the industrial revolution in the 1700s, it has accelerated rapidly in the past 50 years. During this time, the global consumption of food, fresh water, and fossil fuels has more than tripled (Foley 2010).
There are vast inequalities in the world today, as the richest people have used and continue to use the vast majority of the world’s resources: for example, 50% of carbon emissions are generated by just 11% of people (Raworth, 2012). While many people have experienced a higher standard of living as a result of globalisation and economic transformation, millions remain in poverty, with nearly 870 million people facing hunger every day (FAO et al. 2012).
Kenya is one example, and who faces the ‘triple ‘challenge’ of poverty, inequality, and unemployment. Climate change also poses a significant threat and is hitting the poorest people first and worst. Rising temperatures, flooding, drought, changing rainfall seasons, and stronger winds are negatively affecting the countries’ biodiversity, food security, water security, and human health.
So how can the doughnut model help transform the developing world?
The circular flow diagram that depicts mainstream economics ignores the various social and ecological systems that underpin the economy. For example, the unpaid work that carers (mostly women) undertake is deemed irrelevant, despite the economy not functioning without them. As such, this representation of economic activity is far from that of reality, and highlights how a more holistic approach is required to transform the places we live in today.
In her economic model, Raworth takes the Earth’s natural systems and society into account. It shows us how the economy depends on the flow of raw materials and energy, and reminds us that we are more than just workers, consumers, and owners of capital. She exemplifies a world where social and ecological perspectives could work to reduce inequalities in wealth and income, whilst benefitting the planet, and where wealth derived from natural assets could be widely shared and not remain in the hands of the capitalist elite. Furthermore, public investment and taxation could be designed in such a way, that it would actually conserve and regenerate natural resources rather than deplete them.
So how could this be used in Kenya?
The doughnut model is the transformative tool that is required to not only lift us out of the mess Covid-19 has created, but to significantly transform today’s divisive economies. Large advances have been made in solar energy, and thus there is huge potential for Kenya to develop a ‘green economy’, one which would create new jobs, provide access to electricity, and reduce carbon emissions. By keeping within the realms of the doughnut, Kenya could make significant progress towards achieving a socially just and environmentally sustainable society, all the while allowing Kenyan citizens to thrive individually and collectively.