April 20 (Bloomberg) -- A controversy over a gift from Libya to the London School of Economics and Political Science shouldn’t stop universities from involvement in countries with autocratic regimes, said Howard Davies, the school’s departing director.
“Libya was a complicated place to do business in,” Davies said today in a radio interview on “Bloomberg Surveillance” with Tom Keene. “I hope universities can remain engaged in difficult countries. I don’t think that a country, just the fact that it has an undesirable regime, means that you can’t educate its people.”
Davies, 60, resigned last month over the institution’s acceptance of 1.5 million-pound ($2.5 million) donation from Libya’s Gaddafi International Charity and Development Foundation. He will remain at the school until May.
At the time of his resignation, Davies, a former chairman of the U.K.’s Financial Services Authority, said it was a mistake to accept the gift and an error to accept a British government invitation to advise Libya on its investments.
The LSE was founded in 1895 by figures including the playwright George Bernard Shaw to assist “the betterment of society,” according to its website. The university has commissioned an independent inquiry by England’s former Lord Chief Justice, Harry Woolf, into its relations with Libya.
Separately, Davies said today that the U.K. economy may “grow relatively slowly for the next 12 months” as debt, unemployment, oil prices and taxes burden families.
“Our consumers are even more borrowed than Americans,” Davies said. “You’d think it’d be difficult to beat the Americans’ habits for debt, but we did.” Now, U.K. residents are “starting to save more and spend less,” he said.
Britain’s economy shrank 0.5 percent in the fourth quarter of last year. The Office for Budget Responsibility last month cut its forecast for 2011 economic growth to 1.7 percent from 2.1 percent.
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