Opinion
Pitfalls of export-led growth

By Prabhat Patnaik
After Sri Lanka and Pakistan, Bangladesh has become the third country in our neighbourhood to become afflicted by a serious economic crisis. It has asked for a $4.5 billion loan from the IMF, apart from $1 billion from the World Bank and $2.5-3 billion from multilateral agencies and donor nations. Though the government has put on a brave face, Bangladesh is facing a growing trade deficit, shrinking foreign exchange reserves, a rapidly depreciating currency, a record inflation and an energy crisis that has necessitated massive power cuts.
Ironically, Bangladesh was being hailed, just a few months ago, as a success story of “development”, and indeed, according to many development indicators, it had made remarkable progress. Female literacy had reportedly increased to 73 percent, infant mortality rate had become half that of Pakistan from which it had seceded in 1971, and its “Human Development Index” was higher than that of India, Pakistan and several other countries of the region. Many called it an “economic miracle” and not without some justification: a country that had been considered a “basket case” at independence, had pulled itself up quite remarkably to outperform all its neighbours, which is why the sudden emergence of economic difficulties for it has come as a big surprise to many.
As in the case of Sri Lanka, there is a tendency to blame “corruption” for the crisis; but, though corruption itself is reprehensible, this is an utterly facile explanation. More plausible is the view that the rise in international prices of a number of commodities, in the wake of the Ukraine War, has increased the import bill of Bangladesh to a point where it has simply run out of foreign exchange to pay for imports; for an import dependent country, this has created domestic shortages that have pushed up the inflation rate. And the shortage of foreign exchange, primarily dollars, also explains the depreciating exchange rate, despite the using up of foreign exchange reserves for stabilising it. The problem with this explanation, however, is that it focuses only on imports and makes no reference to Bangladesh’s reduced export earnings from garments that account for 83 percent of its total exports.
Some Bangladeshi economists have blamed the country’s monetary policy for the crisis: Bangladesh kept its interest rate unchanged for a long time instead of raising it. Had it done so, it would have been able to attract adequate private financial flows for financing its trade deficit; and in such a case the exchange rate would not have depreciated and remittances would not have dried up in expectation of such a depreciation. But this again is a superficial explanation; the problem lies much deeper, in the very nature of the strategy of export-led growth that Bangladesh, together with most other countries, has been following in the era of neo-liberalism.
The wisdom of pursuing a strategy of export-led growth has been discussed among development economists for at least half a century, ever since the so-called East Asian “miracle” started being contrasted with the comparatively sluggish growth experience of countries like India that were pursuing, in the World Bank’s language, an “inward looking” development strategy. This entire discussion, however, has missed an important element that plays a role in real life.
Among the various expenditures that constitute aggregate demand in an economy, some are autonomous while others are induced by the growth of aggregate demand itself. Exports and government expenditure are generally considered to be the two main autonomous items: consumption, for any given distribution of income, is supposed to be dependent on the level of income itself. There is no doubt an autonomous element in consumption too that is independent of income, but that becomes pronounced only in certain situations, for instance when goods hitherto unavailable to consumers suddenly become available.
The growth of demand and hence of output in an economy depends on the growth of the autonomous element of demand. And in a neo-liberal economy where being open to cross-border financial flows imposes limits on the fiscal deficit relative to GDP and also practical constraints on the government’s ability to tax the rich and stimulate demand without raising the fiscal deficit, exports become the main stimulus for growth. A neo-liberal economy in short is characterised by primary reliance upon export-led growth.
But the export-led growth strategy is not confined only to a neo-liberal setting. The government can deliberately encourage exports, rather than expanding the home market by enlarging its own expenditure, in which case we can have export-led rather than government expenditure-led growth, but with the government still being pivotal to growth; indeed, many argue that this was the case with East Asian countries.
We must distinguish between two cases among countries pursuing an export-led growth strategy: one where the countries earn systematically large current account surpluses and thereby build up their foreign exchange reserves, China being a prime example. In the case of such an economy, any adverse development in the world economic situation makes a difference only to the magnitude of the current account surplus, which affects the magnitude of accumulated foreign exchange reserves only marginally. The country therefore, can ride out such an adverse development without experiencing any crisis.
Many other countries, however, belong to the second category, where they run more or less perennial current account deficits, balance their payments through private financial inflows, and even when they build up foreign exchange reserves these are financed through borrowings, including from private financiers. India belongs to this category, as do the countries of South Asia in general, and indeed most countries of the global south.
In the case of this second group of countries, if there is a widening of the current account deficit because of some exogenous reason, whether a pandemic induced reduction in tourist earnings (as in the case of Sri Lanka), or a Ukraine War-induced increase in import prices, or a world recession-induced fall in export earnings (both of which have happened in the case of Bangladesh), its impact on the economy gets exaggerated because of the behaviour of private agents in general, and of private financiers in particular. This is because, when there is a widening of the current account deficit, and hence a greater need for private financial inflow, this very widening causes a greater financial outflow.
Private financiers expect the currency of the country that has seen a widening of its current deficit to depreciate, and hence, concerned exclusively with their own interest, take funds out of the country, thereby intensifying the foreign exchange problem for it. In fact, if things were left exclusively “to the market”, it is not clear that the country would ever reach an equilibrium in the foreign exchange market; but that is when the country approaches the IMF, and a loan from it creates expectations among private financiers that the depreciation of the exchange rate would be arrested, so that the foreign exchange market can come to some sort of an equilibrium. But the IMF demands a heavy price for giving a loan, in the form of a reduction in welfare spending, a winding down of the public distribution system, a handing over of the nation’s assets to foreigners (sometimes called “denationalisation” of assets) and so on.
It is this exaggeration of an initial shortfall in foreign exchange to a huge shortfall because of the behaviour of private finance, that occurs over an extremely brief period and pushes the country to the steely embrace of the IMF, which explains why countries suddenly go from being “miracles” to mendicants. The problem with export-led growth is precisely this: its apparent success can evaporate in a jiffy; and this happens when the pursuit of export-led growth makes the country dependent on the whims and caprices of globalised finance.
We have seen this happen in our neighbourhood, even to countries like Sri Lanka and Bangladesh which had notched up impressive human development achievements. With the world economy stagnating, and exports of several third world countries being hit by such stagnation, the list of mendicant countries is likely to grow in the coming days; and India despite its economic size and the large size of its foreign exchange reserves (though these are built up not from current account surpluses but from financial inflows) is by no means immune from it. The only saving grace in India’s case is its foodgrain self-sufficiency (though at very low levels of consumption) and external relations that would allow oil imports from countries “sanctioned” by imperialism. Even foodgrain self-sufficiency, however, would have disappeared if the Modi government’s three farm laws had been implemented; but the kisans saved the day for the country.
The idea of export-led growth had become discredited by the inter-war crisis of capitalism before it made a reappearance through neo-liberalism; with world capitalism confronting a new crisis, a change away from it is once again on the horizon.
(This article was originally published in the People’s Democracy)
https://www.networkideas.org/news-analysis/2023/06/pitfalls-of-export-led-growth/
Opinion
Prof. Harshana Sasanka Rambukwella: A Charismatic Pedagogue

Yesterday, a sumptuous rainbow manifested over Pera. I could not but think of you, my friend!
Harshana was my batchmate at Pera in 1997.
Since he was the only boy among a bevy of girls, taking the first year English course offered by the English Department, Professor Erskine called him the “thorn among roses” at the very first lecture we had with him. But Harshana Sasanka Rambukwella was never a thorn in anyone’s side, so the name did not stick.
He was a lovely human who was happy to spread goodwill among all he associated with. What I remember most distinctly about him is that he was level-headed even as a raw fresher and could argue a point with strength without showing an ounce of unnecessary aggression. Though he had a temper it was reserved for what called for anger.
My most distinct memory of him is when he and I went to the E.F.C. Ludowyk memorial lecture, when Dr. Jayantha Dhanapala spoke on Neruda, as a poet and diplomat. We were awe -struck and though shy as freshers enjoyed the academic atmosphere and the sophistication Dr. Dhanapala exuded. I am glad we did not know of Neruda’s darker side then. That would have spoilt the experience.
I also remember that we chortled when Professor Walter Perera told us not to partake of the refreshments, sotto voce because he had not thought that many people would show up. Then later, good old “Wally,” told us to go on and tuck in because there was enough to go around, with very visible relief. The two of us laughed and chuckled all the way home.
Those were good times.
I was reminded of his temper when I met him as my Professor in my Sociology of Education class, which he taught with Professor Harini Amarasuriya. It was one of the most enjoyable sessions that I was fortunate enough to attend. He would speak on Pierre Bourdieu with such magnanimous expertise helping even the most reluctant of students understand the depth of the French sociologist and philosopher’s views on education and other matters, relating these theories as they should be adopted in the teaching of English in Sri Lanka. When students in his zoom meetings were quiet, he would say with severity, ” the level of engagement is very low.”
The Charismatic Pedagogue was the title on one of his kuppi talks contributions. He was indeed a charismatic Pedagogue.
When he brought up the notion of the Brown Sahib and Thomas Macaulay, I could not help but feel nostalgic, reminded of the time we had spent as raw freshers at Pera. There was Ramila, who remained his best friend until he passed away and of course Prashani and many others. There was nothing very raw about Harshana. He was always a gentleman whether as a young man or as the gentleman I met last on 6th August 2022, when I first visited the PGIE. He would always check my availability when he called me later on and I would say “What men! Don’t stand on ceremony just call anytime!”
It was pure irony that he was one of the judges at a competition and when my entry which went without my name won, his happiness on my success was very evident when he called to congratulate me.
As a scholar, Professor Rambukwella has made many notable contributions both as the director of PGIE and also through his quite prolific writing and research which include research papers such as , Anagarika Dharmapala: the nation and its place in the world, Patriotic Science–The Corona Virus Pandemic, Nationalism, and Indigeneity, and the countless papers he co-authored with the best in the field, and his explorations on Sri Lankan English and last but not least his magnum opus: ‘The Politics and Poetics of Authenticity: A Cultural Genealogy of Sinhala Nationalism.’ This work translated by his good friend Professor Wasantha A. Liyanage, “Amare,” will influence the Sri Lankan reader for time to come. It was a timely and necessary work which will in future help countless students, scholars and readers make sense of the dialogue surrounding the notion of Sri Lankan Nationalism as manifest in politics and literature and Sri Lankan culture. He was not simply an academic he was a man of taste who lived and loved and partook of culture.
Harshana’s life, though brief made its mark on the world because he was not simply an idealist, he was an activist and a trade unionist. He led by example and was a mentor to countless people, students, writer and scholars and a miscellany of others who defy labelling. This must be a trait that he inherited from his father, who was a mild gentleman when we met him during his stint at the English Teaching Unit, but had a reputation as one of the best teachers and school masters Dharmaraja College, Kandy could boast of.
Harshana was a great scholar, a teacher par excellence and a warm kind hearted human being. He will be missed, not only by Prashani, and the two lovely girls about whom I have heard so much, but by everyone who knew him however briefly.
Rest easy my friend! You will be loved. Your life though brief is a cause for celebration not for lament!
By Ashanthi Ekanayake
Opinion
Ragging and loss of life

Recently another life of an undergraduate was lost due to barbaric ragging at the Sabaragamuwa University. This is not the first time this happened at this University and sometime back a girl committed suicide due to inhumane ragging. It is pertinent to examine some of the factors as to why this sort of inhumane ragging goes on unabated in the universities. The most important factor as to why ragging cannot be stopped falls on the university administration. Vice Chancellors are mortally scared of these violent student groups backed by their unions to take punitive action against the perpetrators of this violence. This may be because they want to paint a picture of a peaceful atmosphere in the universities to their political masters who appointed them in the first place. These vice Chancellors are also aware of instances where strong action taken against ragging by Vice Chancellors in the past resulted in their removal such as Prof. Epitawatte at Sri Jayewardenepura and Prof, Sujeewa Amarasena at the Ruhuna University. They desist from taking action with the students because of the fear that the students will organiSe protests and even resort to physical violence against them. Academic staff members also turn a blind eye even when they see instances where ragging is openly carried out by the seniors. This may be because they themselves were raggers in the past and see nothing harmful in such sordid instances of ragging. Unlike in the past, ragging today is inhuman, violating privacy and forcing hapless undergraduates into the worst forms of human torture.
Ragging is most prevalent in halls of residence where the wardens and sub wardens simply turn the other way and never try to stop this menace. Wardens are collecting points for their next promotion and do not see that it is their duty to look after the welfare of the students.
Police, too, are to be blamed for not taking action against raggers under the Anti-ragging Act even after the university produces these culprits at the police station. I can well remember the case of a ragging incident at the Peradeniya University, where the accused were handed over to the police and they wanted to record it as a case of two student groups involved in a fight. Some time ago, the Police Department stated that all forms of ragging should be reported to the CID but nothing happened under this arrangement. Similarly, recently the Attorney General gave an undertaking to the supreme court that the vice chancellors have been instructed to prevent ragging in the universities but this is just restricted to actions on paper and nothing substantial has come out. Similarly, the Attorney General’s department takes years to prosecute raggers who have been caught, produced before judges and released on bail. There is a case of some agriculture faculty students who were caught red handed in a safe house outside the University premises at Peradeniya several years ago. The Attorney General has still not filed action against these students.
This year 1250 students have been selected to the Faculty of Arts at the Peradeniya University, where there are only150 males including 30-Buddhist monks. This shows that males shy away from attending a state university and think that it is better for them to go to a private university where there is no ragging. In fact, private universities have more males than females and the underlying reason is the lack of ragging in these private universities.
The political parties who back the student unions cry hoarse for preserving free education but they do not have the slightest idea that these ragging incidents are a big threat to free education. It is up to the Government to set up effective mechanisms to curb ragging including strict instructions to the police and the legal system to deal with these cases under the anti-ragging act.
by Professor O. A. Ileperuma,
Emeritus Professor, University of Peradeniya
Opinion
Remembering Dr. Samuel Mathew: A Heart that Healed Countless Lives

It is with a deeply heavy heart that I express my sincere condolences on the passing of Dr. Samuel Mathew Kalarickal on the 20th of April 2024. Born in 1948, Dr. Samuel was not only a pioneer of interventional cardiology in India but a giant in South Asian healthcare whose influence extended far beyond national borders.
A Beacon of Excellence and Compassion
Known as the “Father of Angioplasty” in India, Dr. Samuel introduced life-saving coronary interventions when they were still rare. His leadership at Apollo Hospitals and Kokilaben Dhirubhai Ambani Hospital brought cardiac care to global standards. But beyond the accolades, it was his humility, compassion, and unwavering dedication to patients that truly set him apart.
A Lasting Impact on Sri Lanka
Dr. Samuel played a pivotal role in shaping modern cardiac care in Sri Lanka. In the 1990s and early 2000s, many Sri Lankan patients sought his expertise in India, trusting him with their lives. He treated them with care and dignity, leaving lasting impressions on families across the island.
He also trained and mentored numerous Sri Lankan cardiologists, generously sharing knowledge of advanced procedures and technologies. His efforts helped uplift cardiac care back home and empowered many of us to bring those skills to our own communities.
A Mentor Who Lit the Path
To me, Dr. Samuel was more than a mentor—he was a fatherly figure. I fondly recall our time at the 2011 Coimbatore meeting, where he urged me to form the Sri Lanka STEMI Forum. His guidance helped us create national strategies and treatment models for heart attack care—an initiative that continues to save lives today.
A Legacy That Lives On
Dr. Samuel leaves behind more than medical breakthroughs. He leaves behind a legacy of service, inspiration, and heart. His memory will live on in every life he touched, every doctor he guided, and every patient he healed.
You will be remembered always, Sir—not just for what you did, but for who you were.
May your soul find eternal peace.
– Dr Gotabhaya Ranasinghe
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