As Sri Lanka’s national crisis worsened, while considerable number of middle class population found themselves sliding into poverty, serious efforts are being made by the government to redress the situation though the outlook continues to turn grimmer.
Is Circular Economy (CE) a solution?
Surprisingly, none other than the World Economic Forum (WEF) believes so.
As you may probably be aware, the Swiss based WEF is the powerful international non-governmental and lobbying entity shaping global economy in myriad ways.
WEF implies Sri Lanka has a rare economic and structural reset opportunity as a result of this crisis. The country can not only survive but can even thrive in future if the insights from this crisis are used. Writing in WEF, Dr Mayuri Wijayasundara, Director, Anvarta and Honorary Fellow, Deakin University, explains:
“..there is no better time for Sri Lanka to consider some novel economic concepts that will help citizens to maintain their quality of life as it was before…The dire economic situation faced by Sri Lanka is alarming and tragic, but at the same time it provides a much-needed opportunity and drive to make key structural changes to the economy. The insights gained during the crisis can bring opportunities and drive the future economic outlook, not just to survive now, but to thrive in the years ahead..” –(https://www.weforum.org/agenda/2022/07/circular-economy-tackle-economic-crisis-sri-lanka )
WEF’s modality is to work across three distinct economic flows- Repairing economy, Sharing economy and the Performance economy;
Repairing economy: Generally this is the ‘make do and mend’ mentality that some top brands are adopting. Nudie Jeans, the Swedish denim brand, offers in-store repairs, with craftspeople in its retail stores repairing almost 46000 pairs of jeans (2020).
According to Dr Mayuri Wijayasundara, in Sri Lanka’s context, as the currency devalues, “activate repair economy”.
“This will create employment”, she advices.
“Providing skills for repair and standardising the skill base through providing professional credentials to repairers may attract talent for work, while initiatives such as opening repair centres and strategic partnerships with manufacturers may help with establishing continuous demand.” – www.weforum.org
Sharing economy: Though some authors such as Curtis SK and Mont O. believe that Sharing Economy may not be sustainable in the long run (due to access to resources at lower prices, which drives up the demand further), it still earns major credit within CE. In the Sharing Economy, importance is placed on access, rather than ownership.
Dr Mayuri Wijayasundara says that as purchasing of new assets becomes a challenge for the public, schemes that pool assets and share them among many users may work well. User-centric business models such as Uber, Airbnb would be much needed. “In addition, wider communal access to small items such as toys, books and tools can be created through libraries for sharing.”
Performance economy: The focus is on the maintenance of stocks rather than linear flow of material. As Walter Stahel, founding father of circularity believes, the difference between consumption and investment goods and is the basis of the performance economy. We pay a high price for asset ownership, but often exploit the asset much less (to our disadvantage). Paying millions for the ownership of an expensive brand new car and using it merely once a week is a common occurrence. What if instead, rather than paying such high prices and ownership, we do not go for ownership but pay much less by using it only whenever we want (while the ownership is someone else’s)? This is the approach behind Performance economy.
“..a smaller number of asset owners will take custodianship of assets to keep them in use and provide services to many users based on consumption. This concept is invaluable when the assets are relatively expensive and complex..” –WEF
With some extra work, the WEF’s CE modality for Sri Lanka could be what ‘just the doctor ordered’. After 74 years of independence it is likely that the existing institutional structure in the country has the capacity to absorb it … but will the country care to adopt it? Can the country muster the national will?
