Sri Lanka is an island nation with a multi-culture population of an estimated 22 million in the year 2020.
Sri Lanka witnessed a sharp rise in foreign debt reaching 42.9% of nation’s GDP by 2019. The onset of the COVID 19 pandemic induced global recession, accelerated the crisis and by 2021 the foreign debt rose to 101% of the nation’s GDP leading to economic collapse.
CAUSES
The information provided is sourced from Reuters Report, links of which are attached.
February 25th 2022 Report
How did Sri Lankan economy end in crisis?
In late November 2019, there were promises to slash tax, a move that included a near halving of value-added tax. The economic argument for the cuts was ‘To free up spending and boost Sri Lanka’s ailing finances’.
Being a tourism-reliant country, the pandemic added to the financial burden. Foreign exchange reserves have shrunk almost 70% in 2 years to 2.36 billion dollars, short of 4 billion in debt repayments due in 2022.
Inflation has surged, key imports have been held up at Colombo port due to the lack of cash and the conflict in Ukraine has pushed energy bills higher. There is only enough fuel for a few days; national power cuts have begun.
<https://www.reuters.com/world/asia-pacific/shocks-missteps-how-sri-lankas-economy-ended-crisis-2022-02-25/>
<https://www.reuters.com/markets/rates-bonds/imf-urges-sri-lanka-focus-monetary-policy-tackle-inflation-risks-2022-03-02/>
LINKS TO NEWS REPORTS
A continued increase in oil and gas prices.
<https://www.youtube.com/embed/B1zFCem5hrM><https://www.youtube.com/embed/MTH0Tzc4TXI><https://www.wionews.com/south-asia/sri-lanka-plunges-into-darkness-overshadowing-omicron-detection-and-lp-gas-suspension-433842>
<https://www.reuters.com/markets/commodities/sri-lanka-struggles-pay-fuel-imports-after-surge-crude-prices-2022-03-09/>
Global supply chain crisis
<https://www.wionews.com/south-asia/due-to-covid-19-sri-lanka-faces-economic-crisis-and-high-food-inflation-441955>
<https://www.wionews.com/south-asia/sri-lanka-allows-sharp-rise-in-food-prices-to-ease-shortages-419123>
<https://www.wionews.com/south-asia/sri-lanka-declares-an-economic-emergency-to-contain-food-prices-as-the-forex-crisis-worsens-410043>
Passage of anti-chemical fertilizer act by the Parliament
<https://www.youtube.com/embed/ao8BQKsLvwc><https://www.reuters.com/markets/commodities/fertiliser-ban-decimates-sri-lankan-crops-government-popularity-ebbs-2022-03-03/>
WHAT ARE WE SUGGESTING?
- The idea is to lobby with lawmakers in Sri Lanka on regulating blockchain. The idea is to create awareness on blockchain functionalities and best practices to regulate and leverage such revolutionary technologies to make Sri Lanka a haven for blockchain ecosystem to grow.
- Bringing favorable legislation will open avenues for new blockchain based start-up ecosystem to flourish and in turn bring a change in the grassroot levels with respect to finance, education, customs, trade, currency, land registry, vehicle registration, e-passport to name a few.
- As the saying goes “Early bird gets the worm”, if the law is changed and the country adapts these new technology, Sri Lanka will have a scope to be one of the flourishing nations alongside blockchain ecosystem development.
GOALS:
- Creating a website for easy access of information related to blockchain technology, Cardano ecosystem and its possible impacts on Sri Lanka and its various sectors.
- Appointing a lobbying panel consisting of legal, financial, education, governance, mass media and technology experts.
- Approaching the Sri Lankan cabinet ministry officials (28 member cabinet panel with different portfolios) and advocating about the benefits of adopting the blockchain technology with help of the website and repositories that will be built.
- The main aim is to approach this in the grassroot levels and therefore the idea is to start lobbying sector wise for a better outcome.
This is the right time to create awareness among the lawmakers and to work on grassroot level to drive the nation forward and help alleviate the economic crisis.
KPIs:
- Total number of ministry officials lobbied with regards to blockchain technology
- Number of sectors included in the lobbying
- Informative resources created for effective lobbying
CHALLENGES
- Not everyone will get onboard with the idea.
- Lack of uniformity in blockchain technology and virtual currency regulations across the globe
- Lack of awareness about the scope of the technology
- Improper advocacy related to blockchain technology and digital currencies in the country
MITIGATION STRATEGY
- Clarifying the scope of blockchain and its possible positive impact on the economy
- Improving advocacy by lawmakers
- Creating awareness by creating regulations and communicating it to the population.
- Starting from the grassroot level by introducing the technology and its solutions
The major challenge is to drive adaption because, as we know a "Nation is not built over a day". Constant lobbying is of key importance to navigate through the challenges and working out solutions.