Economics Personal Statement

Shanker Sreetharan  is currently a first year undergraduate reading BSc Economics at University College London. This personal statement was part of his successful application to UCL, University of Warwick and University of Nottingham for Economics.

The Sustainable Development Goals (SDGs) are the UN’s targets for poverty eradication, environmental preservation, and achievement of prosperity. Initially, I was interested specifically in the target of eradicating poverty within 15 years, which seemed overly optimistic. In ‘The End of Poverty’, Sachs estimates that with planned developmental aid, poverty can be eradicated by 2025. This argument is predicated upon the existence of the poverty trap (represented by the S-shaped curve), which he argues a one-time injection of resources will help the poor escape.

Contrary to this, economists like Easterly reject his notion of a poverty trap, and instead argue that poverty can be tackled by educating the poor as to the efficient way to benefit from their existing resources. Personally, I do not think the two ideas are mutually exclusive; greater efficiency and information will increase the efficacy of aid. However, research I conducted during an economics internship at Malaya University suggests the existence of thresholds in corruption and governance, which prevent aid from serving its intended purpose.

I am eager to further explore growth and development models at university. The SDGs detail far more than just poverty, but I think that there are multiple conflicts between the different targets. For instance, the goal of speedily eradicating poverty conflicts with that of controlling climate change, since the UN’s time targets would require heavy industrialisation. Growing up in Malaysia, I have witnessed the harms of overly rapid development first-hand. Cities like Kuala Lumpur experience flash floods, landslides, and pollution due to over-urbanisation. I am therefore convinced that sustainable development must be the overarching goal.

To explore the subject further, I took Columbia’s online course, ‘The Age of Sustainable Development’. I learnt that growth must comply with planetary boundaries in order to be sustainable. While researching the link between development and sustainability, I was fascinated to stumble upon the environmental Kuznets curve. If the hypothesis of increasing development leading to environmental improvement after a point is true, then concerns of sustainability will sort themselves out naturally. However, empirical work by Levinson et al. has found little support for an inverted U-shaped relationship between national income and environmental indicators.

Competing in the Malaysian Public Policy Competition, I employed this knowledge to conclude and argue that development policies must be designed to be sustainable. My EPQ on sustainable development argues that development policies need to strike a balance between neoclassical and ecological economics. Neoclassical economics considers the environment a subset of the human economy, focusing on maintaining a constant available capital stock by ensuring a high savings rate; this investment then drives technological improvement. On the other hand, ecological economics rejects the subsuming of the environment, instead arguing that it is the human economy which is a subset of the environment, since natural resources are not perfectly replaceable by man-made capital.

I argue in my EPQ that firms must move towards investments with positive externalities, and that this is the only way to ensure that the micro-foundations of development are sustainable. Businesses could invest in waste management, ensuring safe work environments, education and reducing carbon footprints. This ultimately generates dynamic increases in productivity, achieving growth while preserving the environment. Therefore, I suggest that governments should move to subsidise and encourage such investment; failure to do so spells doom in the long-run.

As a scholar of the Central Bank of Malaysia, I will have a platform to craft policies and models for sustainable development. I am keen to explore the intricacies of sustainability and development through economic theory at degree level.

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