WB's chief economist praises civil society
Bangladesh's civil society has helped the country perform better in many social indicators, Kaushik Basu, the chief economist of the World Bank, said yesterday.
The country has done better than India in some indicators, he told a group of economists at Bangladesh Institute of Development Studies in Dhaka.
Basu, who is the second WB chief economist from a developing country and the first from India, also praised Bangladesh's stable economic growth, which he said would reach China's pace of growth next year.
He also spoke on globalisation and the role of trust in trade and exchange at the event, which was moderated by KAS Murshid, director general of BIDS. Basu, who had previously served as the chief economic adviser to the Indian government, said a country has to have a certain level of maturity and intellect to reap the benefits of globalisation.
Basu, also senior vice president of the WB, cited the example of Enron that had huge energy projects in India. But those contracts were on the cost-plus conditions, meaning that the Indian government had to pay Enron production cost plus profits. India was saved by Enron's collapse, said Basu, who is currently on leave from Cornell University in the US, where he is a professor of economics.
“So, you need to know the kind of contracts you sign,” he said, adding that foreign direct investments move from one place to another just to make as much profit as they can. Basu said trade and exchange, be it at an individual or country level, have become so important in today's world that no-one can deny it.
And the societies with a lot of trustworthiness do better, he said, adding that many transactions across the world take place on trust. It means a modern market economy cannot function without a modicum of trustworthiness.
Accordingly, the WB has put emphasis on human psychology and values, which, he said, are being incorporated into the works of the multilateral lender.
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