College of LAS « Illinois


Economic Development by Motorbike

Economics professor applies unconventional methods to Third World problems.

Salim Rashid

One way for an economist to study the struggles of an impoverished nation is by toiling through mathematical formulas in a comfortable room thousands of miles away. Then there’s Salim Rashid’s way, which includes leaving his desk and buzzing on a motorcycle through cyclone-ravaged plains and forests in Bangladesh.

Rashid, who joined the University of Illinois faculty in 1981, visits Bangladesh—a south Asian nation of 150 million people that is roughly the size of Illinois—once a year in a mission to steer his native country away from what he considers a disastrous path. As housing devours more than 1 percent of Bangladesh’s agricultural land each year, the population is projected to skyrocket to 250 million by the year 2100.

“What I’ve been doing over the last 10 years is going back and repeatedly trying to emphasize this point,” he says. “You have to think 30 years ahead and then bring that backwards in order to get something effective happening. You can’t just look at the current budget and the next year’s budget and the next year’s budget and think that just because Bangladesh has staved off disaster for the last 50 years it will necessarily stave off disaster in the future.”

This is a good point in which to define Rashid. He grew up as the son of a bureaucrat in what was then East Pakistan (which became Bangladesh in 1971). His family was middle class but spared no effort or expense on education, and Rashid eventually left home to study at the London School of Economics.

Though trained as a mathematical economist, he whispers that over the years he evolved into “an outlier.” That is, Rashid deems the mathematical models that developed into the bedrock of modern economics as inadequate in tackling real issues. He believes that intangibles—values in particular—play a role in economics, and that economic systems must be embedded within a social framework.

You cannot solve problems in a nation like Bangladesh solely through market forces, he adds, because market forces would dictate that the best people and ideas would abandon the Third World for more developed countries.

“I was taught that economics deals with real world problems, and mathematics deals with precision. So initially I thought this was a way to get a precise solution to the world’s problems,” he says. “As soon as I started seeing what the models actually do, I realized there was an enormous gap between real world problems and the model formulations I was producing. So I slowly started distancing myself from that area and moved into other areas where I thought I would get more insight.”

He hasn’t given up hope that economists can help the Third World, but he believes culture specificity is the key in evaluating and solving problems.

“That is why I work on Bangladesh, because I think I understand Bangladesh,” says Rashid. “I tell everyone else to focus on one country. Try and understand that one county and see what you can do for them. Don’t make a universal model because those don’t work.”

Rashid’s focus on Bangladesh has been extensive. In past ventures he has helped establish a private university, and has worked with the World Bank, Asian private research institutions, the Planning Commission, and other groups on monetary issues, roads, and local government infrastructure.

He recently spent his sabbatical in Bangladesh developing grass-roots support for an idea he developed and has written about called compact townships, which he believes can address the country’s economic problem. He envisions creating some 7,000 of these townships in rural areas, with each one consisting of about 20,000 residents brought in voluntarily in an agglomeration of housing, schools, hospitals, and local government. The small size would enable non-motorized traffic within each.

The townships would have urban amenities—such as Internet and other communication access to conduct business—and provide safe drinking water and crucial flooding protection. This would stem migration to cities. He acknowledges that it would be a “mammoth” undertaking, but he spots fundamental problems in all the alternative plans he’s seen.

He decided to take this concept directly to the people because he felt he exhausted his connections and has not been successful influencing Bangladeshi policymakers. Rashid and some of his students traveled around asking villagers if they’d be willing to relocate to a compact township, and a survey of multiple communities revealed that up to more than 80 percent of residents would be willing.

So Rashid began talking of the disadvantages, such as paying a long-term mortgage in the new townships, and the percentage of those approving of such a drastic change dropped, but only to around 50 percent, a result that defied the “educated people and the bureaucrats who were convinced that villagers were ‘backward’ and would never move,” Rashid says.

“Over 30 years, Bangladesh has to reorganize its entire spatial mode of living and producing,” he says. “That’s my proposed solution, but regardless of whether people accept my solution or not, the important thing is that they see the problem—how do 250 million live and prosper in a land the size of Illinois?”

By Laura Weisskopf Bleill
Fall 2009