Sri Lanka, Nepal, Pakistan Economic Crisis: A look at the economic condition of India’s neighboring countries

The way India’s neighboring countries Sri Lanka, Pakistan, Bangladesh and Nepal are getting trapped in China’s debt trap or by giving various assurances to take loan from IMF, they are bursting inflation bombs on their people, it is a very dangerous situation. Is. This web of debt will not only create difficulties for the present and future generations of these countries, but also due to the Chinese debt, the territory of these countries can also be usurped by the dragon in the coming times. Seeing the expansionist plans of China, India has been helping neighboring countries from time to time so that they do not become victims of China’s conspiracy. It was with the help of India that Maldives came out of the economic crisis and freed itself from China, Bangladesh also understood India’s point and did not increase its dependence on China, India is also giving all kinds of guarantees to other financial institutions including IMF for Sri Lanka. So that this country can stand on its feet again. But due to China’s disciple Pakistan and China’s pro-Nepal government, these two countries are getting trapped in a bad situation. That’s why America has also expressed concern that China can forcefully take advantage of the debt being given to India’s immediate neighboring countries by Dragon.

Talking about the economic condition of India’s neighboring countries, first of all let us introduce you to the present condition of Pakistan. Pakistan is facing a variety of problems on various fronts, but its mounting debt burden cannot be ignored as inflation is at its peak and foreign exchange reserves have fallen. Pakistan has reached the brink of economic collapse and is waiting for a miracle. Pakistan is looking for a messiah who can fix its faltering economy. In the form of such a messiah, it has also found its friend China, which has already given USD 700 million in aid from the IMF.

Let us tell you that Pakistan, the world’s fifth most populous country, is facing various problems like political instability, climate change and economic crisis and these problems are ready to push it into a situation like Sri Lanka. The devastating floods in Pakistan, which is recovering from the COVID-19 pandemic, have completely submerged not only the land but also its battered economy. Pakistan is reeling under a debt trap that is affecting its import-dependent economy and will have far-reaching economic and social consequences, according to a new study by the Asian Development Bank Institute. If you want to understand how much debt has been imposed on Pakistan, then you can understand through statistics, according to which Pakistan’s external debt and liability is about 130 billion US dollars, which is 95.39 percent of its gross domestic product (GDP).

Pakistan, facing financial crisis, has to return about $ 22 billion in the next 12 months and a total of $ 80 billion in three and a half years, while its foreign exchange reserves are only $ 3.2 billion and its economic growth rate is only two percent. At present, Pakistan is using almost half of its central budget to repay the loan. Although the Government of Pakistan has made various efforts to reduce the debt burden, it is not enough in the background of skyrocketing inflation. Pakistan’s massive debt burden is the result of harmful policies and pressure on economic imbalances, etc. To deal with this, Pakistan has been increasing its dependence on various economic cooperation and loans, including 22 programs of the International Monetary Fund.

If seen, the governments have failed to make any structural reforms to get Pakistan out of the debt trap. Short term measures in Pakistan can only avoid the current situation, while Pakistan is in dire need of long term structural reform measures. If the country is willing to protect itself from future defaults, it must end the special privileges before it is too late. But there doesn’t seem to be any chance of that.

Meanwhile, Pakistan has received the much-awaited USD 700 million aid from China ahead of finalizing talks with the International Monetary Fund (IMF) for economic assistance. Pakistan’s Finance Minister Ishaq Dar has tweeted that ‘State Bank of Pakistan’ received $700 million fund from ‘China Development Bank’. After which the Prime Minister of Pakistan Shehbaz Sharif expressed his gratitude to the “special friend”. Shehbaz Sharif said, “Pakistan has an ally country, we all were thinking that they were waiting for the IMF agreement and then they will play their part but that ally country told us a few days ago that ‘we will give you direct Giving financial help.” Shehbaz Sharif said that these things can never be forgotten. Let us tell you that Pakistan’s foreign exchange reserves, which fell to a low of US $ 2.9 billion a few weeks ago, , has now increased to close to 4 billion US dollars.

As far as the situation in Sri Lanka is concerned, let us tell you that this neighboring country of India is currently in the final stages of talks with the IMF regarding a bailout package of US $ 2.9 billion. Sri Lanka does not have foreign exchange reserves at all, due to which there is no import from outside and this country is completely dependent on the help of India and other countries. The situation is such that the Election Commission of Sri Lanka has said that local body elections cannot be held because there is no money. Meanwhile, President Ranil Wickremesinghe has said that his job as president is to revive the beleaguered economy. The Sri Lankan government has repeatedly indicated that the economic crisis is increasing due to the lack of foreign exchange reserves.

On the other hand, if we talk about Nepal, if the Government of Nepal does not take utmost care regarding ‘debt trap’ diplomacy, then it may also have to face the economic situation like Sri Lanka and Pakistan. Apart from Pokhara International Airport, Nepal has just completed construction of two major projects – Gautam Budh International Airport in Bhairahawa and Chobhar Dry Port in the capital Kathmandu. None of these costly projects is working effectively. If a project’s business strategy is ineffective or is established without rigorous preparation, it sends a very negative message to the international community and future generations. The risk here is that the country’s national debt could prove too onerous at a time when Nepal needs major investment in quality infrastructure.

Let us tell you that for the financial year 2022-2023, the Government of Nepal is allowed to raise a maximum of 256 billion Nepalese rupees (about $ 2 billion) as internal debt. This decision to curb external debt has come at a time when many countries including Sri Lanka are failing to repay the debt. In such a situation, Nepali officials are very cautious about taking loans from China and are requesting donations instead of loans from Beijing for projects under the ‘Belt and Road Initiative’ initiative.

However, now the US State Department has said that the US is deeply concerned about the possibility of coercive benefits being taken from China in lieu of loans given to India’s immediate neighbors Pakistan and Sri Lanka. Donald Lu, Assistant Secretary of State for South and Central Asian Affairs, told reporters ahead of Foreign Minister Antony Blinken’s visit to India, “We are very concerned that Chinese loans to India’s neighboring countries could be misused.” Is.” Let us tell you that Antony Blinken is coming to New Delhi on a three-day official visit from March 1 to 3. Donald Lu said that the US is talking to countries in the region that they should make their own decisions and not come under pressure from any external partner.

-Gautam Morarka