Nobel Laureate Makes the Case for Economic Growth
~~Adz:Left~~“Economic growth is a necessary condition for poverty reduction, but it is not an end in itself.” So said Professor Michael Spence, Nobel Laureate and Chairman of the World Bank’s Commission on Growth and Development, in his presentation of the 12th Sir Arthur Lewis Memorial Lecture at the ECCB Headquarters on 7 November, 2007.
According to Professor Spence, although growth in and of itself is not of interest to humans, it makes accomplishing economic and social goals easier or even possible, and provides options and opportunities for individuals and countries to be creative and innovative.
He stated that growth of seven per cent or more was required to double GDP every 10 years. However since the 1950s only 12 countries had sustained this high growth rate over a period of two to five decades, with China achieving more than 9 per cent growth over the past three decades.
He highlighted key trends in the global economy that affect growth opportunities as well as the challenges including rising income inequality, global warming and demand shocks in energy and commodity prices.
Professor Spence noted the need for infrastructure to connect to the global economy since growth at high speed could only be achieved with the demand and knowledge in that economy. Other key elements were high savings and investment governed by stable rules; clarity about the roles of the public and private sectors, long planning horizons, flexibility, resource mobility and competition as the driver of productivity growth.
He pointed out that critical policy priorities for small states would include coordinating infrastructure investment, regional integration, and the sharing of governance.
