Sultan South Asia in 2022

The Covid-19 fallout continued into the year 2022, negatively impacting the South Asian economies. Many countries in the region — excluding India whose economy remained somewhat unscathed — moved from being festive to fraying.

Pakistan remains one of the worst affected in the region. Already in economic turmoil, Pakistan faced floods of biblical proportion causing damages worth $32-40 billion. The vote of no-confidence against the PTI government in April this year, though purely democratic, pushed the prevailing economic crisis towards a default-like situation.

Sri Lanka moved from merriment to mayhem within a year. The island nation continues to suffer from a grave economic crisis with the inflation rate soaring to 70%. Ensuing popular uprisings caused political and social stability which have, in turn, added to the economic degeneration. The Ukrainian war also turned out to be a major trouble, causing food and fuel shortages.

Nepal experienced extremely dwindling foreign reserves — from $12 billion in 2021 to $9 billion in 2022. The impact on the micro-economy — manifested in high inflation and high cost of living — led to a social uprising in the country.

This year, Bangladesh also faced an industrial slowdown. Penetration of one million Rohingya refugees worsened the economic and social crisis as it became difficult for Bangladesh to accommodate a huge flux from Myanmar.

Also, Afghanistan faced a humanitarian crisis and issues of governance.

While nearly every South Asia country braved a tough 2022, India gloomed and gleamed in the outgoing year. The country saw its per capita income soared by 6.8%. The Indian government successfully maintained the inflation rate at 7% — as against twice as much in other countries of the region. The inflation rate in India was even lesser than in America and Britain. According to reports, India performed extraordinarily and is on track to become the world’s fifth largest economy.

It was the protectionist economic policies and expansion of domestic investment which helped India advance amidst dire circumstances. The government subsidized mega giants like Ola, Adani and Reliance. It managed to turn the energy order from fossil fuels to solar energy. While energy crisis remained a big impediment to economic targets in nearly all South Asian countries, Indian government’s adoption of green energy and decentralised energy policy through solar rooftop projects thwarted the energy crisis in the country.

In 2023, few challenges are anticipated to cause troubles for the South Asian region — the foremost of them being the climate disaster. Pakistan and India suffered severe heatwaves in March and April of 2022. The potential challenge in the coming year is to manage the harsh weather conditions and burgeoning vulnerability due to the ecological crisis. South Asia is under threat of a climate catastrophe which could destabilise the socio-economic and socio-political structures in the coming year.

Other big threats to stability and integration of the region in 2023 will be food insecurity and fuel crisis — mainly due to the ongoing war between Russia and Ukraine. People in Pakistan, Sri Lanka and Afghanistan will continue to suffer from back-breaking price hike.

Last but not least, the rising insurgency in the region — with the resurfacing of militant groups like TTP and al-Qaeda — will put the South Asian region in a geo-strategic and geopolitical dilemma. The head-to-head tussle between India and China in Ladakh; Pakistan and India in Kashmir; and Pakistan and Afghanistan-based militants will hinder domestic peace as well as regional stability.

To conclude, the whole of South Asia, except India, underperformed in 2022 in the areas of economy and political harmony. If the region wants the coming year to be any different, it is time for the countries in the region to increase interdependence and interconnectivity to ensure mutual peace and prosperity.

Published in The Express Tribune, December 12^th, 2022.

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