South Asia occupies an increasingly prominent role in global affairs. According to the World Population
Prospects 2022 by the United Nations, the region will be home to 3.5 billion people out of 8 billion
globally by November 2022. Four out of the top eight populous countries will be in the region. China
and India round off the top two positions, though they will exchange ranks.
The region continues to experience political and economic instability. Sri Lanka got a new president
after the former president fled the country following months of social protest and financial crisis.
The government under Prime Minister Shehbaz Sharif is struggling for the mandate as former Prime
Minister Imran Khan made a sensational comeback in the Punjab elections in Pakistan. The Taliban
has failed to garner recognition, though some major powers now engage the Taliban.
The region suffers from high inflation, ballooning debt and dwindling forex. Sri Lanka, Pakistan and the
Maldives are at different stages of negotiation with the International Monetary Fund seeking support.
Most countries have high single-digit inflation, but Sri Lankas’s is a staggering 45 percent. Every South
Asian currency has depreciated against the greenback, reaching record lows.
The region might be able to benefit from the IMF support in the short term, but the political cost in the
medium term could be high as IMF-mandated austerity bites.