Senior Vice President of the World Bank discusses future of economic development

This Tuesday, Chief Economist and Senior Vice President of the World Bank Dr. Kaushik Basu gave the second of four lectures for the Global Futures Initiative. This initiative is a two-year long series of discussions on the future of development, governance, security and environment.

Basu began his talk with a focus on the history of economic development, citing Adam Smith and his belief that when countries specialize and trade, they are more capable of progressing and growing. He also explained the other prevailing theory of the “invisible hand” and the ability of the economic market to grow on its own.

He made it clear that the issue of economic development is not an easy topic. “Just growth is not enough,” Basu said. He also points out that with growth comes inequality and poverty.

He also highlighted the challenge of making sure the wealth from economic growth is distributed fairly. Similarly, where you are born has a profound influence on your economic situation. “The bulk of human inequality shows up at birth. If born into a slum…right from the word ‘go’ your chances are blighted,” he said.

Rather than simply focusing on economic growth, people creating policies need to pay attention to where this money is going and how it can be shared.

Another issue Dr. Basu addressed during his talk was the need to create effective policies aimed at reducing poverty. Even though it is important for activists to be passionate about improving the living conditions for many in poverty, real and influential change comes about policies based on analytical thought.

Towards the end of his talk, Dr. Basu discussed the global trends in economic development, highlighting the BRICS countries as having some of the highest growth in GDP. He also mentioned the issues of technology in relation to economic growth. Although technology can create faster production or allow people to work for firms half a world away, it can also take away jobs or reduce the income of workers, leading to more inequality.

During his energetic speech, Dr. Basu repeatedly emphasized the importance of combining economic growth with the promotion of shared prosperity. “It is right that we should be concerned about poverty. It is right that we should be concerned about inequality,” he said.

The discussion served as a reminder and a challenge to make sure that efforts to develop countries must always seek to improve the lives of all people.

Photo: Georgetown University

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