Sri Lanka lacks evidence based economic debate: WB economist

WASHINGTON, Oct 22, 2007 (LBO) – Sri Lanka needs debate on economic policy centered on real evidence or research instead of extreme posturing based on ideology if the island is to progress, a top development economist said. However up to July 2007 Sri Lanka spent four percent less on oil imports compared to the same period in 2006.

“Sri Lanka is already a middle income country with about 1300 US dollars of per capita income,” Shanta Devarajan, chief economist for South Asia at the World Bank, told LBO in an interview on the sidelines of the annual meeting of the Bank and the International Monetary Fund here.

“But if you compare it with other countries at the same level, the economic policy debate is much more evidence-based elsewhere. In India, which is about 1000 dollars per capita, I find that the nature of economic policy debate is evidence based.

“Right now in India there is a vigorous debate about opening the capital account. People are writing papers and analyzing and participating in that debate. In Sri Lanka it is usually an ideological debate.”

Devarajan points to a recent 500 million US dollar sovereign bond as a case in point where the government depicted the bond as a “great thing” while t