The visiting United Nations Department of Economic and Social Affairs senior economic affairs officer Nazrul Islam on Wednesday suggested bringing the country’s state-owned enterprises out of government’s control to achieve a sustainable economic reform.
He was speaking in a seminar titled ‘Was the Gradual approach not possible in the USSR?’ organised by the Bangladesh Institute of Development Studies in the city.
The seminar made a critical analysis of the Sachs and Woo’s hypothesis based on Vietnam’s experience with her 1989 reforms that China would have grown faster had she followed the Big Bang approach to reform instead of the Gradual approach.
Economist Jeffrey Sachs from the USA and Wing Thye Woo from Malaysia prescribed implementation of the Big Bang theory, although it had failed in the erstwhile Union of Soviet Socialist Republics, rather than the Gradual approach.
In contrast, China with Russian technology and engineers had achieved great economic development following the Gradual approach.
The Sachs-Woo hypothesis promulgated in the 1980’s by Jeffry Sachs and Wing Thye Woo is based on a comparative analysis of the economic reforms of the former USSR and China.
The Sachs–Woo hypothesis shows that the Gradual approach was not possible for the USSR because of the structural differences between its economy and that of China.
In their view, china had predominantly agricultural economy with surplus labour, so that reforms with Gradual approach in China could take the form of growth of new sectors based on surplus labour.
At the same time, the USSR had an over-industrialised economy characterised by full employment so that reform for her meant mainly restructuring of the existing economy.
BIDS director general Mustafa K Mujeri suggested that Bangladesh should follow the successful reform experience of China.
Economists Rehman Sobhan and Mahbubul Mokaddem Akash, BIDS research director Binayak Sen, and other researchers and economists were present at the seminar.
