Sri Lanka is expected to be placed under default by rating agencies after the non-payment of coupons on two of its sovereign bonds last month.
Worse, in a statement that threatens daily life in the country, the energy minister informed the parliament that the country has run out of money to pay for fuel. This is the first time that the country is facing such a crisis since gaining independence from British rule in 1948.
Naturally, the country didn’t know how to handle it.
Unprecedented economic-crisis-borne violence has left not only a trail of deaths and injuries but also the resignation of former PM Mahinda Rajapaksa. Rajapaksa has long enjoyed a cult status in the country for leading a crushing victory against the terrorist group LTTE. But the current crisis managed to jump over the pedestal to lead to his home being burnt down by protestors!
The country that is watching Sri Lanka with the greatest trepidation is Pakistan: For, almost all the reasons and the consequences thereof in the island nation are currently ripe in the Islamic country. Add to that a generous contribution from the Frankenstein of myriad home-grown-and-nurtured terrorist groups.
Political governance is in limbo because of a raging battle on the streets of the Islamic country between a hapless, artificially-stitched coalition government and a belligerent former PM Imran Khan.
The Pakistani currency, PKR, has reached the level of 200 per USD while the foreign reserves dwindled by $190 million last week to $10.308 billion, enough only for 1.5 months of imports.
On the other end of India’s east-west compass, the often-touted economic success story called Bangladesh is now suddenly in tatters. Inflation has reached a 40-year high and the trade deficit at the end of March ’22 was close to $25 billion. Experts in Dhaka blame the COVID-19 pandemic and the Russia-Ukraine conflict for the reversal.
Nepal’s economy may be short of ‘concerning’ status at the moment, but it is much worse than it has been previously.
In other words, India’s neighbourhood has slippery slopes galore.
Beyond the conveniently crafted term ‘South Asia’ lives the truth that the region is, after all, the ‘Indian Subcontinent‘. Therefore, it is both India’s prerogative and obligation to help arrest the chaos that has currently engulfed more or less the entire neighbourhood.
It is a given that there would be characteristic resistance to Indian help. India, however, should look to assuage that by offering credit lines, currency swaps, deferred payments, etc., and not making political statements.
India has already done all of that to help Sri Lanka fight for another day. More is underway.
Eventually, even Pakistan will accept assistance of that nature from India.
It is never rewarding to be an adult amid estranged teenage siblings. But one has to be what one essentially is. So, India should play the role to the hilt – for the sake of the sparring family; and for the sake of the village green that feeds the family, viz., the Indian subcontinent.