In an independent and incisive take on Sri Lanka’s current external stability position, IPS Deputy Director argues that the build-up of external payments stress is a cumulative process, where the lines between external public debt, public-guaranteed external debt, and private sector external debt become blurred, and virtually disappear at times of external payments crises. The most prudent strategy to insulate an economy from rising exposure to foreign debt is to ensure a healthy growth in earnings from exports of goods and services, and build-up a ‘war chest’ of non-borrowed official reserves.

An e-book of the ‘Sri Lanka: State of the Economy 2012’ containing summary information and visuals of the 7 key chapters is now available for free download. This e-book also contains links to a video presentation of the main highlights of the report.

As the Sri Lanka Economic Association’s Annual Sessions 2012 kick off today on the theme ‘Export Growth for Sustained Development’, Ashani Abayasekara (Research Assistant – IPS) writes that trade protectionism is raising its ugly head through subtle yet substantial ways, and the Sri Lankan export sector must keep a close watch. Some of the top [...]

So many facets of the “Asian century” are discussed heatedly. But one is glossed over — economic freedom. Market liberalisation is a crucial enabler of Asia’s current awakening. Its “negative” acts – removing restrictions that repress economic activity – have unleashed the animal spirits of ordinary people, and they are transforming Asia and the world [...]

As the European crisis led by Greece and Spain has significantly worsened over the last few months, the future of Europe seems ever more uncertain. With the decreasing possibility of a favorable outcome coming out of Europe, the impact of this crisis on the United States, China and emerging Asia is steadily increasing. Countries outside of the region have begun to plan ahead for a possible breakup of the European Union and all eyes seem to be on the EU at the moment – waiting to see how the situation will eventually manifest.