A lack of trust is to blame for the banking sector’s current woes, said noted economist Wahiduddin Mahmud yesterday.
An implicit element of trust works in most cases but in banking it does not, he said while delivering a lecture styled ‘Economics, Ethics and Literature’ at the Dhaka University’s RC Majumdar Auditorium organised by Banglar Pathshala, a social organisation.
“That minimum trust does not work in the banking sector. That is why a situation has turned out to be such. Here, the law should be applied properly,” he said.
Mahmud’s comments come a day after he said the latest spate of reforms in the banking sector by the government is taking it backwards -- further away from the global standards.
Economic decisions and policies should be framed by considering the ethical standards and norms of the society where the policies would be applied, he said.
“Otherwise, it may not yield goods results,” he said, while giving example of a case of how a government decision changed the practice of local communities that manage natural resources like irrigation to grow crops.
Mahmud also pointed out the areas where economic theories are lagging behind.
One is disparity between wages between men and women although both do the same work. And the other is estimating the value of lives lost to industrial accidents.
Subsequently, he called for broadening the field of economics.
“Time has come for economists to relate economics with sociology, arts and other disciplines,” Mahmud said, adding that economics would be more effective and humane if it is viewed from a broader perspective instead of viewing it as a science only.
The economist said Bangladesh’s economy is diversified. On the one hand, there is rural informal market and on the other, there are modern retail stores sprouting up. “And this diversity offers scope for economists to do a lot.”