Cyn-Young Park is assistant chief economist of the Asian Development Bank. She has written widely on the economies and the financial markets of Asia. She was a speaker at a satellite event held in IIFT Delhi, as a part of the recently concluded Delhi Economics Conclave. In a conversation with Shanu Athiparambath, she spoke on the importance of macroeconomic policy in shielding the economy from economic crises.
Q. If the public sector has to spend money, it has to be taken from the private sector. It has to be taxed. If the private sector does not have enough funds to make the necessary investment, where does the money come from?
A. In a way, the governments can take a long-term view when compared to the private sector. How much can the government actually spend? It depends on the country’s medium term fiscal sustainability. Unlike the private sector, the public sector can think of tomorrow, and spend today. But, that spending should not be wasted. That will be bad governance. You have to actually have a very strong governance system. The public should be able to ensure good governance.