Anti-export bias in policy framework causes decline of debt-export ratio

COLOMBO (News 1st) - A public lecture on the "Challenges of Late Converging Economies" at the Central Bank of Sri Lanka was delivered by the Chief Economic Advisor to the Govt. of India Dr Arvind Subramanian. Addressing the event, Governor of the Central Bank of Sri Lanka, Dr Indrajit Coomaraswamy expressed his views as well. Dr Coomaraswamy stated that on the external debt to export ratio, that essentially the exports as a percentage of the country's GDP has come down from a peak of about 33% down to 12.4%. He also continued to say that it was largely because the country has been going through an anti-export bias in our policy framework for a large amount of time. Dr Coomeraswamy also stated that today the country has done remarkably well in terms of enrolment ratios in primary and secondary education but that in terms of learning outcomes particularly in terms of the stem subjects that there has to be higher value. Also speaking at the event was the Chief Economic Advisor for the Government of India, Dr Arvind Subramanian. He stated that, since 1969, for much of Sri Lanka's history, has had to go through IMF programs and that this has not been true of other south Asian countries, certainly not India. He also further added that this reveals that there have been ongoing macroeconomic stresses in Sri Lanka forever. "I want to congratulate your current policymakers, but the long-running trend is very disturbing. I am struck by how external debt service to exports has increased just very dramatically from 130% to upwards of 250%" continued Dr Subramaniam.