In this issue of the South Asia Bulletin, contributors analyze the efforts South Asian countries have made to bring their citizens back from conflict-ridden Sudan. Other national, and transnational issues have been discussed, including Sri Lanka and Nepal’s economic crises, increased terror attacks in Pakistan, and the first Apple store in India. Read the South Asia Bulletin for more.

Most South Asian countries suffer from political and economic distress. But India and China increase their global footprint. Read the South Asia Bulletin for more.

In this issue of the South Asia Bulletin, contributors analyze the political, economic, and geostrategic issues in the region and the South Asian response to the Russian Invasion of Ukraine.

South Asia strives to address natural disasters, political instability and economic crises. At the same time, they have newer bilateral and regional issues such as Agnipath scheme, and Chinese military presence in Indian Ocean littoral states to sort out. 

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.

South Asia Bulletin: What, Why and When?
Conventionally, South Asia (SA) covers the region to the West of Myanmar (South East Asia), South of
the Himalayas, and East of Iran (Middle East), extending to the Indian Ocean. Most of the region was
colonized by the British, who called it the ëIndian subcontinent.í
In contemporary parlance, SA consists of the eight countries under the regional grouping called South
Asian Association for Regional Cooperation (SAARC). It is home to a quarter of world population.
SAís global economic share has increased in recent decades, particularly with the rise of India and
Bangladesh. In addition, SA boasts two nuclear powers- India and Pakistan. Many analysts argue
that SA (primarily India) will play a critical role in the global balance of power in the coming decades
if it already has not done so. The accelerated interests and engagement of international and regional
powers such as the US, China, the EU, and Japan in the region suggest the significance of SA will
only continue to grow in breadth and depth.
However, the understanding of SA is limited. Even more concerning is the limited understanding of
countries in the region besides India. The global understanding of SA is Indo-centric. Without a doubt,
India remains the dominant and most consequential country in the region. Therefore, many outsiders
view South Asian affairs through an Indian lens. This provides a wrong understanding of the region
and, subsequently, faulty policies. Therefore, there is a need to study and understand SA countries
on their merit.

Domestic Development

On 23 May 2022, the Office of the Attorney General (OAG) and the Anti-Corruption Commission (ACC) signed a memorandum of understanding (MoU) on strengthening partnership and collaboration in the prevention, investigation, and prosecution of corruption cases. The MoU provides a framework for professional communication and cooperation between the two agencies to work closely in the best national interests of the country.

Inter-agency cooperation in anti-corruption initiatives has been Bhutan’s weak link. OAG claims that the ACC has a mandate for investigation, not prosecution, per the constitution. However, the ACC act of Bhutan provides provisions for prosecution in particular circumstances.

Bhutan’s corruption ranking has slipped one place from 24th last year to 25th this year as per reports by Transparency International in its Corruption Perception Index 2022. However, the country’s score of 68 has remained the same for the past three years since 2018, and Bhutan is the least corrupt country in South Asia.  

Regional Engagement

India agreed, in principle, to provide a third internet gateway to Bhutan. Bhutan’s foreign minister, Tandi Dorji and Indian External Affairs Minister, S. Jaishankar, reached an agreement during the latter’s visit to Thimpu on 6 May. The rate is not yet finalized but is understood to be less than USD five per Mbps (megabits per second). Currently, Bhutan pays USD seven per Mbps for the Internet connection through the Siliguri corridor. The new link will benefit Bhutan’s Eastern districts and remote pockets of the country. It will also ensure continuity in service during emergencies such as internet shutdown caused by cycle Amphan in other gateways. Bhutan also expects the connection to attract foreign direct investment in information technology (IT) and IT-enabled services and employment generation.

Bhutanese Prime Minister Lotay Tshering said the internet is to be free and that the country should push to reduce the data charges and enhance access to the internet. However, he emphasized the need for responsible use of the internet.

Earlier this year, Bangladesh agreed to provide 10 Gbps IPLC (International Private Leased Circuit) to Bhutan at a friendly rate of USD three per Mbps. The decision came during Tsering’s meeting in Dhaka with his counterpart Sheikh Hasina on 24 March 2021.

Global Engagement

Bhutan unveiled its Sustainable Development Goal (SDG) seven roadmap in Thimphu on 31 May. It aims to ensure universal access to affordable, reliable, and modern energy services. The roadmap focuses on efficiency in transport and domestic fuel use. Thimpu has partnered with ESCAP and UNDP for the same. Bhutan stepped onto the international stage as the first country to become carbon negative in 2017. It means the country’s greenhouse gas production is more than offset by its extensive forests and export of renewable energy. The Constitution of Bhutan states that forests should cover more than 60 percent of the country at all times.

Domestic Updates

The Maldives is at a high risk of dollar reserve depletion by 2023. The primary causes are Covid-19’s impact on the tourism industry, soaring global fuel prices, and rising borrowing costs. Maldives has USD 829 million in reserve. However, the national debt, at USD 5.9 billion in 2021, has ballooned to USD 6.4 billion in the first quarter of 2022.

Minister of Finance, Ibrahim Ameer, assured that the Maldivian finance is in better shape now than in the last three years. The economy is growing with the arrival of tourists. The Maldives is expected to grow at 13-18 percent in 2022.

Regional Engagement

Maldives and India conducted the second joint hydrographic survey of Maldives, covering 6500 nautical miles. The survey is critical for the Maldives to update the Navigational Charts/Electronic Navigational Charts for ship safety in several areas of Maldives and enhance Blue Economy. The first phase of the survey started in 2021. Some of those areas were not surveyed since 1853.

The joint survey resulted from India’s policy of supporting the Maldives to set up Hydrographic facilities. India provided the Maldives with hydrographic survey equipment in 2021 and 2022. The joint survey will enable economic development, defence, security, coastal zone management, environmental protection, and scientific research.

Global Engagement

President Ibrahim Mohamed Solih sought approval from the parliament to join the International Islamic Trade Finance Corporation (ITFC). Maldives is not a member of ITFC. Yet, ITFC has provided financial assistance to the Maldives since 2005. ITFC aims to advance trade among members of the Organization of Islamic Cooperation (OIC). The Russian invasion of Ukraine has adversely impacted Maldivian tourism. The two countries jointly accounted for 14 percent of tourist arrivals between January to March of the current year. Despite this, Maldives condemned the Russian invasion of Ukraine at the United Nations General Assembly (UNGA) vote. Furthermore, the Maldives has reiterated its firm belief in principles of respect for sovereign states and sovereign equality. Yet, Maldives has taken a cautious approach to enforcing the sanctions imposed by the West in the aftermath of Russian aggression in Ukraine.

Domestic Updates

Bangladesh Nationalist Party (BNP), the marginalized opposition party in Bangladesh, held a protest against Prime minister Sheikh Hasina for her ‘defamatory’ remarks. During a press conference, Prime Minister Hasina insinuated that Khaleda Zia, chairperson of BNP, be dropped from the Padma Bridge. Hasina and Zia were political rivals, but Hasina and her party, Bangladesh Awami League (BAL), have dominated Bangladesh politics since 2009.

Human rights violations and marginalization of the opposition have been a hallmark of the BAL regime. Khaleda Zia was sent to jail after she was sentenced to five years imprisonment by a special court in the Zia Orphanage Trust corruption case on 8 February 2018. In addition, observers have questioned the integrity of the 2014 and 2018 elections held under BAL.

BNP has been a shadow, with little representation in the national parliament. Currently, they are protesting against inflation, demanding elections under a neutral government and the release of the party chairperson. However, questions remain over their sustenance and impact on Bangladesh politics.

Bangladesh has seen spectacular economic growth in the last two decades. Yet, Bangladesh’s foreign reserve peaked at USD 48 billion in August 2021 but dropped to USD 42 billion by May 2022. Global price increase of oil and wheat because of the Russian invasion of Ukraine, import growth due to Covid-19 free situation, and low remittance inflow are the significant causes. This has raised fear in some quarters that Bangladesh is following Sri Lanka’s path. As a result, the Bangladesh Bank has hardened its import policy for luxury and non-essential items like sports-utility vehicles, washing machines, air conditioners, and refrigerators to mitigate the situation.

Regional Engagement

Bangladesh’s foreign minister, Abdul Momen, attended a two-day NADI-3 (Natural Allies in Development and Interdependence) Conference, which began on 28 May in Guwahati, Assam. Indian External Affairs Minister S. Jaishankar and Chief Minister of Assam Himanta Biswa Sarma also attended the conference. In his inaugural speech, Momen said, “We have developed strong connectivity with our neighbours, particularly India. We have developed robust connectivity by road, railways, waterways, and air routes. We have more to do in waterways because it is cost-effective. I am looking forward to a new Indian subcontinent where we can help improve the connectivity of all the waterways. We also developed connectivity in our energy sharing.” Momen urged Nepal and Bhutan to join in connectivity. However, BBIN motor-vehicle agreement (MVA), which brings all four countries together, is languishing.

Global Engagement

Bangladesh observed 29 May as the International Day of United Nations (UN) Peacekeepers. Nearly 7000 Bangladeshis serve as the UN peacekeepers, 9.2 percent of a total of 75,516. Bangladesh is the largest troops contributor to peacekeeping operations. Hasina has assured that Bangladesh is ready to contribute more peacekeepers.

The Ukraine war has also resulted in the price hike in necessary food items, especially wheat. Even though India banned wheat export, it will continue to export to neighbouring countries. Bangladesh, which had successfully engaged China, India, and other major powers through open regionalism, is facing a new challenge because of increasing competition between China and the US (and Quad). All Quad members are key development partners of Bangladesh.

Domestic Updates

In late May, India announced a ban on wheat exports. New Delhi intended to secure the supplies for the nation amidst rampant inflation and a disrupted global supply chain caused by the Russian invasion of Ukraine. India accounts for just one percent of global exports and thus has only a regional impact. India banned the exports of sugar earlier. It has not yet banned rice exports and is considering exporting wheat to select regional nations.

India continues to face a slow but steady ‘fourth wave’ of the novel Coronavirus pandemic, with new cases climbing fast. The country counted over 4,000 new cases for the first time in the last three months. Amid the domestic crisis of the COVID-19 pandemic, India has earmarked USD 26 billion to curb rising prices and record inflation.

Regional Engagement

India has extended financial aid assistance to economically-decrepit Sri Lanka by deferring loans worth USD 1 billion. In addition, India sent energy supplies (diesel) to Sri Lanka. The economic downturn of the latter has led to political and social crises. As a result, Colombo lacked essentials such as food, fuel, and medicines in May.

Prime Minister Narendra Modi visited Lumbini, the birthplace of Gautam Buddha in Nepal. Modi offered prayers at the sacred Maya Devi temple on the occasion of Buddha Purnima. India views Nepal from the prism of being within its geostrategic ambit and desires to reduce Chinese influence in Kathmandu.

India appointed ambassadors to Nepal and Bhutan in May. Following PM Modi’s visit to Nepal, the Ministry of External Affairs announced the appointment of Naveen Srivastava. He is known as a strong China hand and handled the East Asian Desk before being appointed Nepal ambassador. Ambassador to Bhutan appointee Sudhakar Dalela is also an old China hand. The appointments reflect New Delhi’s efforts indicate that China views its neighborhood from a security perspective and intends to counter Chinese influence in the region.

Global Engagement

Modi embarked upon a trip to Japan to attend the Quad Leaders’ Summit on 23 May. Modi spoke of India’s role in the maritime domain as the Quad made progress on maritime domain awareness (MDA). He described Quad as a ‘force for good’.

However, the Quad continues to remain divided on Russia. India is reluctant to criticize Russia, India’s time-tested strategic partner. Amid the ongoing conflict, India-Russia bilateral trade has witnessed an exponential rise. India is not just purchasing cheap oil from Russia but is also procuring other commodities such as fertilizers. Moscow is now the fourth-highest supplier of crude oil to New Delhi. As two major powers, India and Russia are consolidating their traditional partnership through an enhanced trade relationship that is only bound to grow. India also continues to have a different position in Moscow than the European Union. India’s Minister of External Affairs, S. Jaishankar, was quite critical of European hypocrisy over procuring oil from Russia to meet India’s needs. He said that Europe’s purchases of oil from Russia far outweigh India’s. However, the Quad is firmly united in its view of the global threat posed by rising Chinese influence.