Sri Lanka’s Debt Troubles in the New Development Finance Landscape
07 November 2017
‘Sri Lanka’s Debt Troubles in the New Development Finance Landscape’ by IPS Executive Director, Dushni Weerakoon, published in a Third World Thematics special issue on ‘Global Debt Dynamics’ examines the challenges middle-income countries face in the new development finance landscape as the overall costs and risks of a debt portfolio rises.
Sri Lanka’s debt financed infrastructure push did not generate the envisaged economic growth. Inadequate debt management, policy deficiencies, and weak governance contributed to deliver low investment returns, exacerbated by the ability to borrow large sums up-front without conditions or questions on the fundamentals of government economic strategy.
The paper also finds IMF conditionalities for course correction can lead to a cycle of further debt accumulation and worsening debt indicators, at least in the short run.
It is to be published in the special issue on ‘global debt dynamics’ of Third World Thematics: A TWQ Journal.