Imtiaz A. Hussain
In the language of fashion and styles, a circular economy may be the "hottest" prospect in the global playground. In economic parlance, this model is denting the hitherto popular "build, buy, bury" business model. So much has its impact been that even the most recent Euromonitor International splashes its attraction in its "Global Economies and Consumers in 2017" report. Not just that, but across the Atlantic, the Ellen MacArthur Foundation has been heavily betting on its future since 2015 (see Towards a circular economy: A wealth of flows). Even before, the McKinsey Company began downgrading the "linear" model (of "take-make-use-dispose") for one that emphasizes "component/product life cycles" for a "use and reuse" counterpart, based on a "product design" (see Markus Zils, Moving towards a circular economy, February 2014).
Marked by its "restorative" and "regenerative" design, the circular economy liberally elevates both utility and value to such a degree that development becomes a virtuous cycle constantly. With only "till death do us part" being the only constraint, the circular economy extracts the most out of any kind of capital, thus enhancing yield out of each and dampening scarcities and risks.
The Ellen MacArthur Foundation even spelled out three circular economy principles and four features. Those principles include preserving and enhancing natural capital (thus shifting utility from material to non-material measurements); optimizing resource cycles (by creating smaller loops within larger cycles); and fostering systems effectiveness (by weeding out negative externalities).
Similarly, its characteristics include eliminating waste by recycling it, discovering diverse product usage, renewing energy by substituting fossil-fuels, relating "parts" to the "whole," and adding product values through usage cascades, that is, finding more smaller loops within the broader and more familiar "backward" and "forward" linkages.
Joseph Schumacher had alerted us to what we call a circular economy today with his 1960s "small is beautiful" argument/book. In a way, the concept neither drifts from the axiomatic market belief in utility maximization, since it only shifts the subject from material goods to non-material commodities; nor does it depart from the individualism that has become the hallmark of capitalism.
Building upon Amartya Sen's distinctions between four "new" differentials in converting wealth into capabilities (personal heterogeneity, environmental diversities, social variations, and deprivation differences), a UK-based environmental consultant Dr Kanan Purkayastha has noted in an article, which was carried by a local English-language daily, the intimate inter-relationship between a circular economy, climate change, and banking. How Bangladeshi microfinance inspired the United Nations to dub 2005 as the "International Microcredit Year," exposed the individual-level practices capable of becoming a social, indeed, global good. His proposal to convert the "take-make-use-dispose" instinct into a "reduce, reuse, and recycle" alternative (a) helps to also take a "Green GDP" instinct from the grassroots to a global setting; (b) facilitates the transition from low-carbon usage through Sen's four differentials; and (c) blends the "small is beautiful" mindset with routine market operations, such as micro-financing.
This might be most appropriate, Kanan Purkayastha further argues, in developing countries, such as Bangladesh, than in developed, as in the North Atlantic zone. Taking an OECD (Organization for Economic Cooperation and Development) study to support his claim, he points out how the ration of a one-person enterprise is as high as 75.4 per cent in Bangladesh, built as this was upon the micro-financing spurt, as contrasted to 7.5 per cent in the United States: 10-times more one-person enterprises prevail here than in the world's largest economy, shifting the attention pendulum from mergers and monopolies to family-owned businesses.
That should hold us in good stead at this 21st Century juncture, marked as it is by (a) the world's largest economy retreating from the global community economically and ramping up environmental disregard to absurdly blatant levels, (b) the toppling of the second-largest global economy (Japan) by a hitherto less-developed country (China), no less a communist one, and (c) a climate-change urgency rarely recorded in modern history as the one the global village faces today with average annual temperatures constantly setting new record-highs and ice-caps melting at unheard of rates along the two poles.
Since the entry-cost is so low, Bangladesh has all the ingredients to not only boost its existing strengths (low-wage ready-made garment exports) by finding smaller loops within the larger industry loop, but also open up dynamic circular economy. This can begin from one's homestead, for example, by treating and converting waste into inputs (from as peripatetic a refuse as paper to as sophisticated an "old" commodity as an automobile, not to mention human discharges): our streets have enough litter and contaminated water to fuel an entire industry if anyone is bold and far-sighted to simply begin the process of collecting and recycling or reusing them. Since, in business, one successful case breeds others, that dynamic individual in Street X could become the spark not just of brand new jobs to fuel the country's climb up the middle-income ladder, but also of a cleaner, safer, and more sustainable environment, ultimately as the poster-child of a circular economy. Just as we injected new life into micro-financing and ready-made garment-production, the circular economy awaits its own breed of Bangladeshi innovators.
Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.