KARACHI: Both democratic and non-democratic governments can transform the economy from poverty to prosperity provided there is honesty and confidence on the institutions and government, said Sir Paul Collier, CBE, FBA is a professor of economics and public policy at the prestigious University of Oxford.

Addressing the annual Zahid Hussain Memorial lecture, organised by the State Bank on Thursday, on the “Role of Central Bank in National Economic Development”, Professor Collier cited the successes of Singapore and South Korea in achieving economic development.

He stressed on the need to create a sense of mutual participation and trust in the government and institutions. He attributed the economic success of democracies to the same factors.

He said South Korea followed Pakistan’s planning for development but succeeded with the vision ‘development first, unification of Korea later’. Korea succeeded to build institutions and trust among the people; the essential ingredients to develop.

Contrasting the paths adopted by Nigeria and Indonesia for their economic development, he pointed out, that while Indonesia devalued its currency to make its goods more exportable, Nigeria concerned itself with building a very strong currency. The result was that the Nigerian economy crashed while the Indonesian survived.

Acknowledging the necessity for an expansive taxing capacity, he, however, emphasised the need for a public trust that the tax proceedings will be used for their interests as a prerequisite.

He noted three beliefs that the central bank should seek to impart; a sense of shared belonging, a sense of fairness and a rationale of self interest-collective building of future interest.

People should have mutual trust as it is the basis for collective sacrifices a country requires in order to achieve prosperity.

He praised State Bank’s role for the progress of economy and his expressed his confidence in the China Pakistan Economic Corridor, calling it a simple and practical for the future progress of Pakistan.

Published in Dawn, February 2nd, 2018