With the Covid-19 pandemic playing havoc on the world economy, there is an imperative need for the developed as well as developing nations to look for alternative methods to leapfrog their economies to meet the needs of the people.
It has been more than one-and-a-half years since the Covid-19 pandemic emerged and we still are unable to forecast its ending. It has resulted in the collapse of the entire world economy and the development path of our human civilization has been changed totally.
The people living in developing countries are suffering in multiple dimensions and Sri Lanka is a miniature landscape of such status.
The economists, financial wizards and top technocrats are looking for new methods to boost sagging economies and one proposal they have come up with is to combine the Digital Economy and the Green Economy into a workable solution to the crises. Digital Economy and its related activities are the pillars of support to unleash its power.
As the human exchange among countries will not recover soon, traditional business models such as tourism, international trade, physical commercial meetings and site visits have all been temporarily suspended. Digital economic solutions are vital to overcome such challenges. Meanwhile, a green and sustainable development mindset should be highlighted while implementing any digital economic solution.
In May 2021, President Gotabaya Rajapaksa appointed a Presidential Task Force called ‘Presidential Task Force on Creating a Green Sri Lanka with Sustainable Solutions to Climate Change’ with all the relevant Cabinet Ministers and State Ministers involved. This ‘Green Sri Lanka Movement’ has unveiled the journey for Sri Lanka to be a model country in terms of a Digital Green Economy.
A group of international scholars and experts have been working to define the roadmap to achieve this mission. The NeoChina International Development Centre has conducted studies together with universities and IT researchers in Sri Lanka and arrived at a roadmap and below are the highlights:
To foster a sustainable ecosystem for Digital Currency and Decentralised Finance:
Digital Currency (DC) is any currency, money, or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet. Types of digital currencies include cryptocurrency, virtual currency and Central Bank digital currency. This lack of physical form allows nearly instantaneous transactions over the internet and removes the cost associated with distributing notes and coins. Out of all the forms of DC, cryptocurrency is the most disputed one.
Decentralized Finance (commonly referred to as DeFi) is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilizes smart contracts on blockchains.
While it has been creating lots of fast-money making myths in the recent years in the world of DC and DeFi, more and more negative cases happened simultaneously which caused the urgency for international organizations and government entities to impose scientific and systematic regulations for critical features such as AML (Anti-Money Laundering), CFT (Combating Financing Terrorism) and KYC (Know Your Customer) to secure a healthy and sustainable ecosystem for the development of Digital Currency.
Digital Currency and DeFi are the cores to release the power of the Digital Economy, especially in the developing world where the digital lifestyle is getting more and more sophisticated due to the restrictions and lockdowns of the pandemic. DC will increase the efficiency of transactions to accelerate the exchange of trade and services without physical contact. Both domestic and cross-border money exchange will be more convenient and efficient through DC. Many innovative business models and derivatives are happening within the ecosystem of DC which provides more opportunities to generate decent incomes through new-generation business logic. Though it sounds really promising, it is critical for us to have some solid knowledge before taking action towards tangible results.
On August 6, 2012, the US Securities and Exchange Commission issued a statement to charge a DeFi company called Blockchain Credit Partners for raising US$ 30 million through fraudulent offerings. This case is the agency’s first involving securities using DeFi technology and this case has also formed an important reference for the other countries to regulate DeFi related activities.
One major obstacle for Digital Currency is the lack of real-world application scenarios due to its technical features. Since the Sri Lankan Government has put Rural Revitalization (RR) as a priority tactic to enhance the livelihoods of the rural people and empower the performance of the agriculture sector and to create a sustainable mechanism for human–nature coexistence, there is a huge potential to integrate Digital Currency solutions along with the RR projects.
As only capable people will be able to deliver tangible results, Sri Lankan youth should be always highlighted as the fundamental pushing power to realize the target of a Digital Green Economy and relevant training and education mechanisms need to be formed along with the procedure.
US-China Digital Economy Bonhomie in Sri Lanka
Sri Lanka and most of the other developing countries see that the relationship between the US and China, the world’s number one and two economies, is facing difficulties and challenges. As US President Joe Biden has decided to come back to the international stage with the Indo-Pacific Region as the focus and climate action as a priority while Chinese President Xi Jinping has initiated the RR campaign to be the emerging pushing power to make its Belt and Road Initiative (BRI) to be more people-centric and result-oriented at the micro-level, there is the required backdrop for such cooperation.
Liu Yang Sloan, General Secretary of NeoChina International Development Centre, said that even though China has imposed very strict controls for all the cryptocurrency related activities within its territory, on July 20, the Ministry of Commerce, the Office of the Central Cyberspace Affairs Commission and the Ministry of Industry and Information Technology have jointly issued the ‘Guidelines for international Investment and Cooperation in the Digital Economy’, in which the Chinese Government has emphasized the importance of comprehensive cooperation with the international society, both developing countries and developed countries, to carry out digital economy related trade, commerce, investment and technical innovation, which makes the US-China Digital Economy Bonhomie focus on Sri Lanka highly feasible.
DGE Pilot Project: Human-Elephant Co-existence (HEC) solutions
The well-known HEC issues in Sri Lanka should be highlighted as the pilot project of the digital green economy. As for more than half a century, Sri Lanka has been following the similar methodology to tackle the HEC issues, however, as human settlement has become more and more interacted with elephant living areas, the simple method such as fence and the passive observation and alarming system is not enough.
Some out-of-box digital economic solutions which will help the people who are living at the HEC hotspot to generate extra incomes because of the existence of elephants so that it will reduce their reliance on the expansion of agricultural farmland should be the sustainable solutions. An international team of HEC and Digital Economy experts are working on some pilot projects at Hambantota Elephant Management Zone through integrated solutions. Once successful, it may be a milestone in the history of the evolution of digital currency.
Sri Lanka Forum for Digital Green Economy
To make Sri Lanka as a model country to be the Digital Green Economy through international cooperation so that such mechanisms can be extended to other developing countries is definitely not an easy job nor can it be achieved just by Sri Lanka itself. It is necessary to accumulate the intelligence of global great minds to come to Sri Lanka and realize this vision.
Liu Yang Sloan proposed setting up of the ‘Sri Lanka Forum for Digital Green Economy (LKFORUM)’ to activate the roadmap. The logo for LKFORUM has been designed by the NeoChina Centre for International Development and the international preparatory committee for LKFORUM will be formed shortly. Similar to the World Economic Forum in Geneva and the Boao Forum for Asia, LKFORUM is to be developed into a forum-based international organization specialized in fostering the platform for a Green Digital Economy related public and private stakeholders to share their minds and define the actions. Once LKFORUM is realized and the relevant mechanisms and projects materialized, Sri Lanka will eventually be the model country and main initiator for the Digital Green Economy. Meanwhile, LKFORUM can be a very important action to revitalize the tourism industry of Sri Lanka specialized for the international high-end market.
Add new comment