Is Sustainable Procurement Relevant to Developing Countries?

Recently I was speaking on leveraging public procurement as a tool to achieve sustainability goal to a group of Indian bureaucrats in a workshop. I was enthused to note that most participants appreciated the concept and enriched the discussion with their active participation. Nevertheless, few were deeply suspicious of the idea and its relevance in countries like India. One of them asked, “Is not this something relevant to western nations?” I think this question is quite naturally in the minds of many people in developing countries, which are challenged by many competing developmental priorities. Brushing aside such questions will only harm the cause of sustainable procurement and delay its implementation. For harnessing the full potential of sustainable procurement policy, we need to educate our policy makers on this critical aspect of policy so that such doubts are removed permanently from the minds of administrators. After all, they are the ones who are heading different municipalities, various state organizations, etc.; leveraging their support would be critical for implementing SPP in these organizations.

                                                                             

To answer the above question, we need to see whether our current production and consumption pattern is sustainable. Although per capita GHG emission of India is way below world average, our aggregate emission is large. With increasing population and disposable income, the burgeoning Indian middle class would constitute the largest block of similarly placed consumers in the world by year 2050. Growing consumption would naturally have repercussions on the quantity of waste generated, land required for waste landfills, GHG emission from these landfills, and so on. 

Now look at our production patterns. Our primary energy intensity i.e., energy required to produce one unit of GDP, is higher than world average by a factor of 2 at exchange rate and also higher at purchase power parity (PPP).  India’s resource intensity i.e., per unit consumption of resources to produce one unit of GDP, is higher than EU average by at least a factor of 2. For a moment, forget about the environment and society!  Simple business sense should force us to think – why do we consume double the resources to produce a unit of GDP as compared to our European counterparts? Does it not make better business sense for industries to think about ways to improve productivity using available technology and provide better returns on investment to shareholders? And what about “Make in India” campaign?  Can this campaign ever be the growth engine for national development with current production efficiency? Should we not then be doing something to make this campaign successful?

Again, I come back to a story narrated by one of the participants in the same workshop. She was once commuting in Delhi Metro. Apparently rural folk, in traditional Indian dress, were travelling in the same coach. One of them was chatting on his mobile to someone and was narrating his Metro travel experiences in native Hindi – “Bahut aaraam hai!” (which means: its so very comfortable).   Is it not our duty to provide the same level of comfort to these people as enjoyed by us for years? I don’t think any government would say NO in response to this question. Therefore, the biggest challenge for Governments in developing countries is how to provide a higher standard of living to million of people residing in the smaller towns and villages without simultaneously increasing their ecological footprint. With current resources availability on the planet and production efficiency, it is simply not possible! Therefore, we need to think about ways to improve our production efficiency and also to reduce our consumptions. It is here that sustainable public procurement policy fits the bill.

The SPP concept not only challenges traditional manufacturers to improve their production efficiency but also forces them to innovate sustainable products, requiring lesser resources and producing minimum waste, on a continuous basis to remain competitive in the market. Can you think of a company investing in India under “Make in India” campaign and remain uncompetitive in the world market? The investor will force the company management to quit! By adopting sustainable procurement principle, industry would not only provide value to shareholders by way of better returns on investment, but also to stakeholders by way of saving resources for future generation. This understanding makes amply clear that SPP policy and programme is relevant to any country irrespective of whether the country is developing or developed. The only precondition for SPP is whether your government wants to unlock the "power of the purse" of public procurement to trigger market for innovative sustainable products.