As we are aware, there is chaos in Sri Lanka and fear of political instability in Bangladesh. Nepal and Pakistan are financially in dire conditions, managing their foreign exchange reserves by prohibiting import of luxury goods as well as basic commodities such as tea. Economic uncertainty in China and the regime change in Afghanistan and Myanmar have made Southeast Asia a matter of concern for India.
Two decades ago, it was said that the 21st century would be an Asian century. Power will shift from America to Asia, and the latter will lead the world economically and politically. After two decades , it’s a dream , far from reality.
In 2013, President Xi of China launched ambitious “One Belt, One Road” (OBOR) project.
The objective was to connect China with different countries in the world, including Africa and Western Europe, for trade and better connectivity. It was assumed that it will lead China to be the world’s most powerful economy, ahead of the US.
The Chinese regime has spent billions of dollars to construct roads, railways, power plants, and ports. Many countries have borrowed heavily from China to meet their obligations. However a year after COVID, its progress has come to a grinding halt around the globe with expected returns in danger. OBOR today is an economic liability for China . Even money lent to domestic borrowers like Evergrande has been immersed resulting in bank-run conditions in China amidst worsening economic conditions.
Sri Lanka is facing one of the deadliest economic crises in its history. Covid has doubled the strike over Lanka’s economy. The tourism industry, which is one of the vital sources of the generation of foreign exchange and revenue and produces thousands of jobs at the local level, has been affected the most. This has resulted in job losses and business closures. This all has made Sri Lanka bankrupt. Budget mismanagement, civil war, election freebies, loans from countries like China, and populist economic policies have devastated the Sri Lankan economy inspite of assistance from India and IMF bailout package.
Pakistan is on the path of bankruptcy. Its forex reserves have been depleted. It has borrowed heavily from China, repayment of which is levying strains on its budget. Floods post pandemic and political turmoils have caused irreparable damage to Pakistan’s economy. Situation has further aggravated due to cost of energy getting escalated in the aftermath of Ukraine war.
Economies of Nepal and Myanmar are under strain post pandemic, Ukraine war and political instability. Bangla Desh’s economy too is not in pink health while we draw some comfort from the buoyant Indian economy.
Frankly world was expecting some respite from over two years of lock downs post pandemic and America’s withdrawal from Afghanistan , however Russia Ukraine war has come as a bolt from the blue. Asian economies with their baggage of the past simply have no wherewithal to sustain the onslaught.