As if Struggle of twin defecits of BOP and budget were not challenging enough for democratic governments, that triple whammy of post-pandemic systemic stress, price inflation and pay more on debts scenarios are here. Countries of South Asia seem to be exceptionally badly affected by these at the moment,except for India, whose deeply democratic values are not only giving it strength to manage the crises reasonably well at home, but also lend a helping hand to those in need of desperate help.
Economies like Maldives, Nepal and Sri Lanka lie largely dependent on tourism and remittances that dried up due to COVID-19 outbreak. And just when things were beginning to ease up, the Ukraine-Russia crisis caused a global spike in oil and commodity prices. This has caused such economies to face multiple simultaneous problems that include accelerating inflation, widening current account and budget deficits, fast depleting foreign exchange reserves making the nations unable to pay oil bills, and eventually protests and social unrest.
Political turmoil in Pakistan pales in front of looming economic crisis, as food prices are hitting record highs, the value of Pakistan rupee is tumbling uncontrollably, double-digit inflation, low foreign currency reserves and dangers of meeting a serious balance of payment (BoP) crisis. Nepal is also showing classic symptoms of brewing economic crisis as its Forex reserves plunged 18% since July 2021, enough to last for just six months of imports. Inflation is hitting a record high in 67 months due to crop loss due to last floods and war-induced inflation.
Afghanistan has gotten into the hold of Taliban in August last year, who have not shown any intent of changing their ideological bearing on gender and minority issues. Similarly, the iron hold of the Myanmar generals on the nation does not seem to be getting loose anytime soon. The history of Burma weighs heavily on its present despite an educated young populace of digital age.
Sri Lanka stands broke. So much so that Mahinda Rajapaksa, who has long been seen by a large section of the majority Sinhalese as a national Hero who defeated the Liberation Tigers, had to vacate his Colombo Residence, for safety from protesters. The island nation is in turmoil amidst crippling inflation due to the worst economic crisis the country has ever seen since it gained independence in 1948.
Amid such a fiery turmoil in the region, India is trying to help neighbours with resources and aids. It has been promoting a futuristic and planning-oriented economic approach which focuses on nation-building through development, self-reliance in all sectors, modern and innovative economic solutions, digital connectivity, and security solutions.
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