Video: Govt. must respond to CB’s ex-Dep. Governor - Harsha

United National Party (UNP) parliamentarian and well-known economist Dr. Harsha De Silva said today the government should answer the allegations made by the Central Bank’s former Deputy Governor W.A. Wijewardene that the computation of external public debt was below international standards.

Dr. De Silva told a media briefing that Mr. Wijewardene was indeed right because the indicators on public debut recorded in the Central Bank’s press release did not give the real picture on public debt because they had not been computed in keeping with the standards set out in the Manual on Effective Debt Management by the UN Economic Commission for Asia Pacific.

He explained the point he was making with the help of several examples.

Dr. De Silva said the definition of public debt, as mentioned in the Manual on Effective Debt Management, was the sum of all external obligations of the Central Government; provinces or similar subdivisions and their agencies, and autonomous public bodies such as state enterprises in which they have joint ownership and major shareholdings with the private sector.

Dr. De Silva said according to the Central Bank 2013 report, Sri Lanka was identified as a nation with a medium debt.

This he said is indicated by the disbursed debt outstanding/gross national income ratio which is actually a disbursed external debt growth as percentage of gross national income.

Dr. De Silva said this ratio according to the Central Bank report was around 35.1 per cent whereas the real amount was 61 per cent. He said when this ratio exceeds 50 per cent that country was a high debt nation and as such the economy of a nation which was high in debt was vulnerable to collapse. (Yohan Perera and Sanath Desond)

WATCH