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Sri Lanka, an island with geographic beauty, lies in the Indian sea southwest of Bengal. It’s a historically rich nation with an enormous cultural heritage. Buddhism made up 70% of the whole country’s demographic. With its second-highest per income in south Asia, Sri Lanka has a relatively better human development quota.
However, 2022’s summer seems relatively hostile to Sri Lanka. The country is facing an extreme financial meltdown and nationwide protest. The protest mainly targeted the country’s once deemed strongman president, who allegedly committed war crimes during the civil war. He was feared by the most and elected to the position mainly by the country’s nationalistic fever and his stronghold power. After his successful election in 2019, he also put his relatives in influential works. The most ironic but sad truth could be his appointing his brother as the country’s prime minister.
Economists claim the country’s foreign currency deficit caused a spiraling economic crisis and turmoil. The government is unable to pay for essential imports, including fuels. The nation has been struggling with “Twin deficits” for years, signaling that country’s expenditure exceeds its national income and the government is not producing enough goods and services. However, the recent economic crash gained momentum from the deep tax cut before the Covid. The president vowed to cut the tax in the 2019 election. But the deep tax cut after Covid slumped the country’s economy.
The country’s lucrative tourism industry and foreign worker remittances plummeted by covid. International monetary sectors strategically locked out Sri Lanka from global capital markets due to its weakened economy. Sri Lanka’s debt program aimed to access those markets, but it did not go as expected, resulting in a plummet of 70 % of foreign reserves. The Rajapaksa government’s decision to ban chemicals in agricultural products since 2021 also triggered a significant drop in critical rice crops.
The country’s measures were insufficient to restore the debt crisis, and the economy needs a muscular reconstruction; as of February, the government left with only $2.31 billion in its reserves and still has to pay back $ 4 billion in debt.
The government’s decision to scrap austerity measures caused an adverse effect. The president cut taxes which resulted in an 8% GDP plummet. He also printed a large amount of money, causing inflation, and refused to restructure the country’s debt system.
The country has to undergo a significant governmental restructure.
Sri Lanka’s infamous president agreed to resign during the unrest. The government needs a new political restructure to strengthen the national economic power. Austerity measures should strategically tackle inflation. The country might shift its dependency on foreign remittances. The government should focus more on local infrastructure and the economy.
The DAO economic structure could be a constructive structure to look up to
The Rajapaksa government is infamous for its autocratic governance. The leading sector should not belong to a large family kingdom structure, which is highly debilitating to a modern economic system. The ruling party should be optimized and reconstructed to leave more power and autonomy to different sectors. To spur the local economy and fight against the governmental monopoly. DAO, as we refer to as a decentralized autonomous organization, strongly embodies the notion of equality and disparity. The nationwide economic meltdown of Sri Lanka has highly associated with its economic disparity and unequally distributed economic powers. The Rajapaksa government refused systematic adjustment calls from opposition parties or other politicians. The DAO governance will allow different voices. It makes governance more transparent and equal, further promoting economic reforms and equal living among citizens. The second wealthy nation in south Asia will become freer and wiser.
The DAO system’s “parliamentary organization” features diversity with its demographic representatives and high intellectuals, which could make healthy governance and plans to help thrive the country. One vivid example from the SuperEx platform could perfectly fit this vision. The first decentralized exchange, SuperEx, has built more than 10 regional DAO organizations. They exchange information, trade technics, plot optimizing schemes for the platform, and even seek job positions in SuperEx. The SuperEx platform also made DAO reserve to spur the DAO members and make the organization more economically and economically constructive.
The Decentralization might Help to Regrow Sri Lanka’s National Power
Centralized governments are famous for their efficiency but blind in many aspects. The centralized political train is directing the whole country, which could be debilitating regarding the nationwide economic crisis. Sri Lanka could turn to a more diverse power distribution. To leave the power to different regions and departments to ensure things are in the right place and people’s hands.
The distributed power to local governments could more efficiently scheme and execute rewarding plans to spur the local economy. The distributed system assigns the power to the people who understand the problem. The power distribution also goes the potential for the residents to dictate their own life without listening to a higher power that has no substantial interest in improving residential life.
The severe economic setbacks covering Sri Lanka are profound and insightful
Meanwhile, it provides a significant chance to restructure the whole economy. The lessons learned from the crisis can bring a healthier and futuristic economic structure, not just for survival now but for becoming prosperous in the future.
Those listed factors are not necessarily representative of Sri Lanka’s case, but they are helpful to consider when considering Sri Lanka’s future economy. What direction or fate the Sri Lanka people may face could be a critical question we may have ahead.
As we discussed the fiat depreciation of Sri Lanka’s official money, the governmental fiats and money are highly centralized in their central bank. Crypto, a digital asset on the blockchain network, also receives certain dictate from traditional finance. But as we said above, Decentralization and DAO features of blockchain have enormous economic power. They decrease disparity and ambiguity; they bring transparency and equality. In Sri Lanka’s case, the centralized monetary policy and economy dilapidated the whole country’s economy. DAO and decentralized blockchain, the idea of Web 3.0 could be the main ideological and economic structure to lead us to future prosperity. Holding a specific crypto asset is a long-term investment. Due diligence before the investment is needed as well. The investment in DAO-related projects and ideas of Web 3.0 and decentralization could be profitable in the long run. As we explained above, the centralized economic structure of Sri Lanka brought a monopoly to the country.
The country is struggling with essential supply and power. Decentralization and DAO are also a permanent tenet of SuperEx exchange. SuperEx exchange is a decentralized (in the coming quarter) first crypto exchange with complete DAO governance. SuperEx listed thousands of tokens covering different aspects ranging from Defi to GameFi. It has different trading modes, from spot trading to leverage and contract trading. The leverage trading it possessed had up to 150 times of leverage. The contract trading also includes stop-limit order, cross margin, and many other features. The app interface is neat and user-friendly. You will like to use it as your best crypto trading platform.
Let’s conclude that the world is swirling in turmoils, the covid outbreak, the Ukrainian war, and Sri Lanka’s economic nightmare. They all could be partly associated with one another. The world economy is highly associated and centralized, especially in traditional finance. We can promote decentralized finances to guarantee our asset safety and organic monetary policies. Sri Lanka will survive this turmoil either with a more decentralized structure or a handicapped conservative economic debris.
www.superex.com
SuperEx is the first decentralized crypto exchange with its complete DAO community governance. SuperEX crypto exchange features thousands of tokens in its trading zone, enabling users to proceed with different tradings ranging from spot to leverage and derivatives. No KYC terms are the spotlight of the SuperEx exchange, which places ultimate protection and tight defense on user assets.
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Official telegram group: https://t.me/SuperExOfficial
Official email: http://business@superex.com/
Official Twitter page： SuperEx (@SuperExet) / Twitter
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