Highlights
- Abhijit Banerjee said GDP growth is not reducing poverty effectively in South Asia
- He warned that wealth is increasingly concentrated among the rich
- Income inequality has worsened globally over the past 30 years
- Dr Salehuddin Ahmed criticised project evaluations as overvalued and non-transparent
- He called for social audits to ensure local people can assess project value
Nobel Laureate in Economics Dr Abhijit Banerjee has said that in countries like Bangladesh and India, a large share of GDP has been increasingly concentrated in the hands of the wealthy over the past 30 to 40 years. As a result, poverty reduction has not been significant despite GDP growth.
Speaking virtually at a conference titled “Transforming Development: Building a Culture of Accountability through Evaluation, Auditing and Ethics”, organised by the Ministry of Finance and the New Development Bank today (26 May) at Hotel InterContinental in Dhaka, Dr Abhijit Banerjee emphasised the need to look beyond GDP figures.
“Too much focus is placed on GDP. GDP is high in large countries, but we should be talking about GDP per capita,” he said the Nobel laureate who is an Indian born US citizen.
“If we want to talk about everything, for example, about temperature changes, then GDP alone isn’t enough. We need to distinguish income levels, and unfortunately, income inequality has systematically worsened in many countries over the last 30 years,” he added.
He stressed that the extent to which GDP reaches the poor, versus how much is accumulated by the wealthy, determines the actual reduction in poverty.
“We must examine who is truly benefiting from the fruits of GDP,” he said.
Abhijit also noted that 10 years ago, inflation, exchange rates, and government debt were relatively under control in most countries, which is no longer the case.
“Sustainable economic development now faces many greater questions. Political and environmental challenges are creating survival risks for large firms,” he said, adding that issues such as migration and climate change are gaining attention in Bangladesh.
Gaps in project evaluation and transparency: Salehuddin
Former Bangladesh Bank governor and Finance Adviser Salehuddin Ahmed, addressing the opening session as chief guest, said there are significant gaps in project evaluation and transparency in Bangladesh.
“There is no value for money in most projects, and they are often overvalued. As a result, ordinary people are deprived of their benefits.”
He criticised the manipulated data used in project assessments, stating, “Audit reports are filled with numbers, but often hide processes behind the scenes. Even experienced auditors and accountants may not know the stories behind these numbers.”
Salehuddin called for social audits to ensure project transparency.
“Local people should be the judges,” he said, recalling how in the 1980s, signboards were placed in project areas informing the public of project details and costs, enabling the community to evaluate their necessity.
“Auditors may manipulate reports, often producing substandard assessments,” he said.
“That’s why evidence and numbers alone are not always sufficient for policy decisions.”
Officials from the Ministry of Finance’s Economic Relations Division and the New Development Bank participated in the day-long event.
