Bangladesh’s amazing economic progress had seemed unlikely 10 years ago: WB Chief Economist Kaushik Basu
Abdur Rahim Harmachi, back from Peru, bdnews24.com
Published: 2015-10-17 22:55:47.0 BdST Updated: 2015-12-12 21:41:40.0 BdST
The Word Bank’s Chief Economist Kaushik Basu has described Bangladesh’s economic progress as astonishing.
He said it had been difficult to feel the same way 10 years ago about Bangladesh, which was now in the top league of nations with high growth rates.
As a Bengali, Basu was all praise for the achievement made by Bangladesh while speaking to bdnews24.com on the sidelines of the board meetings of The World Bank Group and the International Monetary Fund in Lima, Peru.
But there was no room for complacency however, the renowned academic warned, and advised policy-makers to be ever alert about keeping up the current pace.
His doctoral thesis under Professor Sen was on Sen’s ‘social choice’. He has been advisor to several of the UN’s multilateral institutions.
He has also taught at well-known Indian and US institutions, authored several books and was a regular columnist for The Hindustan Times and the BBC.
A Cornell University professor of economics, Basu had taken leave to join the Indian government under former prime minister Manmohan Singh.
After serving as the Chief Economic Advisor to India’s Ministry of Finance, Basu moved to the World Bank as its chief economist, the first Indian to hold the post.
In a brief interview, he spoke about his high expectations of Bangladesh.
Basu, who had once worked at the Bangladesh Institute of Development Studies (BIDS), said he was happy with the country’s overall economic achievement and particularly in social sectors such as education, health and human development.
At the request of the Bangladesh Bank, he would deliver a series of lectures on Bangladesh-India relations, regional economy, and politics.
The programme, to be held in Dhaka on Dec 15-16, would be inaugurated by Prime Minister Sheikh Hasina.
Here are excerpts from the interview bednews24.com had with Prof Basu.
bdnews24.com: Bangladesh is being praised in international forums these days. It achieved over six percent GDP growth rate even during the worldwide recession. What is your assessment of the Bangladesh economy?
Kaushik Basu: You are right. The Bangladesh economy progressed well even when the world economy was in the throes of a crisis. Many people are now praising Bangladesh. [We’ve been] discussing this with the governor of the Bangladesh Bank. I can say there are not too many countries in the world that match the rate at which the Bangladesh economy is growing of late.
bdnews12.com: The IMF predicts the Bangladesh GDP will grow at 6.8 percent in the 2015-16 financial year. Do you think that is possible?
Kaushik Basu: Look, Bangladesh has been maintaining a growth rate of over six percent for the past few years. Last year, too, it had a growth rate of 6.51 percent. International organisations have hinted that it will be close to seven percent this year. We (the World Bank) also feel that way. I think that is not is impossible for Bangladesh.
If you prepare a growth chart of the whole world, it (Bangladesh) will be at the top. As a Bengali I can say that even 10 years ago it had seemed unlikely that Bangladesh would reach this position.
bdnews2.com: Bangladesh has made considerable progress in the social sector as well. What is your take on that?
Kaushik Basu: Yes, Bangladesh has picked up a lot of international accolade in this field too. Bangladesh has achieved considerable improvements in social indicators such as life expectancy at birth, infant mortality etc. And these improvements will have an effect on economic growth in the long run.
My teacher Amarta Sen has repeatedly said these improvements yield certain immediate benefits, and growth benefits, which are very large in the long term. We have seen this in China. So, on the whole, the story is very, very positive.
bdnews24.com: What more do you think Bangladesh should do in order to fare even better?
Kaushik Basu: The economy is something that is very difficult to manage. You cannot sit back saying it’s good news at every stage. Resting on laurels will not do. You have to remain engaged. The central bank, the finance ministry and at every level it is a very hard tussle… ahead. And the global scenario is not very positive.
We are having this discussion sitting in Latin America. This year Latin America will most probably have negative growth. Brazil’s growth, in the meantime, has turned negative. It is a huge country. Venezuela, too, has had negative growth. So, the global situation is very difficult. You will have to keep it up in the midst of all this.
bdnews24.com: Bangladesh’s foreign exchange reserves have reached a comfortable position. What effect is this having on the economy?
KaushikBasu: Very good. The reserves in Bangladesh are now 26/27 billion (US) dollars. Let me go back a little… a long time ago. In the early 1990s, seven billion dollars was considered very good. Then, after the reforms in India, the reserves began to increase very quickly.
That is evident in Bangladesh, too. Twenty-seven billion is a very handsome figure.[It gives very little scope for] currency fluctuation. Speculators are wary of this because they know the central bank wields power, it has a huge ammunition. So, it’s very good news.
One thing has to be kept in mind here. The global money market is always volatile. To manage it, the central bank has to handle it with great caution. But this has been attained under this central bank regime; you have reached 26 billion dollars. So one can hope this is a progress that will continue. Bangladesh will benefit a lot in export-import because of this.
(The original interview, mostly in Bangla, has been translated)
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