At a public lecture in Dhaka organised by Bangladesh Bank on Sunday, he praised Bangladesh’s achievements and advised the country to be prepared for the challenges of globalisation.
This is Basu’s first visit to Bangladesh in his current capacity.
A former Chief Economic Advisor to India’s Ministry of Finance, he is the first Indian to hold such a post in the World Bank.
Born in Kolkata, he did his PhD under the supervision of economics Nobel laureate Amarta Sen.
In his lecture, he touched on almost issues related to economic development including exports, globalisation challenges, demographic dividend, energy security, management of reserves, and even the notorious Dhaka traffic.
He also reminisced on his days in Kolkata where he grew up reading the same poets the students of Bangladesh read.
On top of everything, he stressed on infrastructure development.
“Infrastructure should be the number one priority,” he said, particularly pointing at port development and electricity generation.
He also stressed on transparency in business policy and said multinational companies must be encouraged to invest, but not at the cost of national interest.
In this regard, he suggested a “good design” based on lessons from West Bengal, where the leftist regime did not lure investors for over 30 years.
“They worked for the workers,” he said, advising Bangladesh to have its own investment policy.
He compared today’s Bangladesh with the one of 23 years ago when he last visited Dhaka and said he was impressed to see many socio-economic changes.
The investment rate has increased to 27 percent of the GDP from only 17 percent in 1992. Savings rate has also increased in the same manner.
He said if those rates could be increased to between 35 percent and 40 percent by 2020, then the 8 percent growth would be possible.
He also advised on proper management of foreign exchange reserves as Bangladesh currently sits on a record $27 billion reserves.
Due to mismanagement, he said, India faced a massive crisis in 1991 when Indians stopped sending remittance directly.
Basu 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.
As the World Bank, IMF, US, UK prescribe different types of policy advices to the government, he was asked who the Bangladesh government should listen to.
“It’s your decision,” he said, adding Bangladesh has many talents and thinkers. “You all can sit and decide.”
But he said the government must set a business policy saying whether it wants to have foreign direct investment or not, when asked about the FDI.
East India Company entered the region as an investor, he said, referring to the company that ruled with its own armies during the British rule in the sub-continent.
He also spoke about skills development to reap the benefit of having a huge number of young population in Bangladesh.
On the notorious traffic that he faced on his way to hotel from the airport, he said this was a development-induced problem that cannot be addressed without “proper planning”.