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South Asia’s Useful Crisis: Opportunity in Turbulent Times?

By Malik Moin Abbas

South Asia is a complicated region. It serves both as a blessing and curse. The myriad diversity of nations within the region brings with it a diverse set of weaknesses as well as strengths. These contradictions manifest themselves in the form of a region that hosts some of the most enterprising societies existing alongside crippling levels of poverty. One can endlessly list the national and individual achievements of the states and societies within this region. However, the one aspect which has hamstrung the potential prosperity of the region is its lack of integration. Being the least integrated region in the world has not done any favors to South Asia. The inter-state and intra-state complications within SAARC (South Asian Association for Regional Cooperation) boundaries have held back the organization from achieving its potential. Its failure is also holding back the region from mitigating, if not solving, the worst aspects of climate change in a region which is presently under great duress.  

The Present Crisis

As of 2022, things couldn’t get worse for the region. Firstly, the Coronavirus-induced lockdowns at home brought local economies to a standstill, throwing millions into poverty. Coupled with the collapse in demand for South Asian exports due to the worldwide lockdowns, this put too much pressure on the fiscal and monetary powers of the states. Already suffering from sub-par fiscal management, multiple states like Sri Lanka, Pakistan and Nepal were stretched too thin trying to cope with the crisis. This entailed a growing burden on the national resources while the productivity levels kept plummeting. Except for India, and to some extent Pakistan, no other nation had a strong enough domestic market to cope with the dip in earnings resulting from the fall in exports. States like Bangladesh and Nepal relied more heavily on remittances to fund their essential imports. Tourism-dependent countries like Sri Lanka, Nepal and Bhutan witnessed huge losses in those earnings. Aside from India, most of the South Asian countries do not possess robust industries for essential day-to-day needs, hence adding to their import bills. Afghanistan, after witnessing state collapse and Taliban takeover, saw huge spikes in malnourishment and endured an especially harsh winter of 2021-2022, leading to high levels of migration into Pakistan and other neighboring countries.

Secondly, the Ukrainian crisis and the record heatwave of Spring 2022 had the effect of increasing fuel and food prices, hitting most of the nations in the regions. India and Pakistan had to ban the export of commodities like wheat and sugar to meet the domestic demand. While Nepal was barely managing to remain afloat, Sri Lanka, arguably the most prosperous nation till now, was bankrupted by the start of 2022, leading to an intense turmoil within the country. The multitude and magnitude of these consecutive crises have shaken the stability of a region where ethno-religious fault lines are rife and had been smoothened by constant state-aided co-optation efforts (especially through patronage networks). Weakening state capacities alongside national polarization stymie such efforts and have the potential to break apart societies. The state failure in Pakistan, Nepal and Sri Lanka has the potential to undo many of the efforts at maintaining a working relationship between diverse and often hostile factions within these countries. Yugoslavian and Soviet economic stagnations played a great role in the break-up of these formerly sovereign entities. India itself might not remain immune to such a crisis which has so far been avoided by the sheer size and strength of the Indian state and the economy.

A Tale of Successes and Failures

In the post-colonial period, the South Asian policymakers were well aware that greater integration and cooperation was required in the region. The Indus Water Treaty stands as one among many examples of how the states achieved meaningful cooperation in the immediate aftermath of decolonization. The founding of SAARC was grounded in this very principle of making the natural choice of regional cooperation a functioning reality. The subsequent free trade agreements amongst all the member states and bilateral relations between nations opened many doors of cooperation, previously considered impossible. Even Nuclear brinkmanship and a number of unresolved territorial disputes was unable to halt the progress towards regional cooperation. The Composite/Comprehensive dialogue between India and Pakistan since the 90s encapsulated this approach: Not letting the thornier issues hold back cooperation in vital areas.  

However, the glacial pace of progress and the intensely polarizing events like terror attacks and domestic political constraints ensured that any real chance of the region emerging as something along the lines of ASEAN was a distant one. As of today, the promising free trade agreements, economic unions and non-economic cooperation agreements display an abysmal reality riddled with underperformance and inertia. The nationalistic cocoons which the polarizing polities within most South Asian nations have cultivated show little enthusiasm for an open and functional regional framework. Such attitudes are fueled by a global drift toward bloc formations which has not left the region alone. The present contest between China and the United States is affecting the region in a way even unmatched by Cold War-era politics. South Asia is as much being torn from outside as from within. However, whereas stabler times might have bred reticence and complacency among the stakeholders, a crisis might provide enough impetus towards action.

Crisis-induced Action

It took the 1991 risk of default for the Indian state to push for radical change in the economic trajectory of the country. It took an insurgency knocking on the doors of Islamabad in 2008 for the Pakistani state to realize the consequences of patronizing extremists. It took a long and cruel civil war for Sri Lankans to realize the dangers of fuelling ethnic chauvinism. Valuable lessons were learnt from these unwanted crises. Similar hopes can be placed on the present crisis to act as a force of nature and break through the obstacles barring this region from greater security and prosperity. If that sounds too high minded, even addressing the immediate economic and environmental woes of the region is a substantial positive step in itself. Examples are all around us to prove that no grand agreements are required to make the lives of millions of South Asians better. The recent ceasefire agreement between India and Pakistan on the LoC (Line of Control) made the lives of hundreds and thousands of people living near the border much safer. No grand bargain was struck to achieve it as expediency dawned on both sides. Similarly, a simple nod allowed the transport of Indian wheat to the starving population of Afghanistan. Small does look beautiful after all if the impact of these decisions is understood from the humanitarian lens.

This particular period seems just right for making deeper moves towards many such measures. Nations which are facing the brunt of high commodity prices and food shortages can benefit from relatively lower costs of Indian goods with a much more assured supply chain. The resilient supply chains which all the big economies talked about during the pandemic can be built in the region as a whole. Good/Service-based chains can be formed as each successive chain created will ensure higher levels of integration and opening. India can relax import restrictions on most of the imports from its neighbors without affecting its trade balance negatively while allaying the fears of an “Indian domination”. Such measures will accumulate over time and impact tens of millions along the way, one small improvement at a time. Instead of grand treaties and comprehensive frameworks, smaller issue-based cooperation can be sought by the nations with their neighbors. Thus, it will be societies which shall integrate and cooperate before the states catch up.

While it is true that states themselves have emerged weaker from the pandemic, there might be a silver lining to such developments after all. For instance, the mass agitation in Sri Lanka has the potential to cause a shrinkage in the power of many entrenched power groups in the Sri Lankan state and strengthen the hand of people vis-a-vis the state. Sustained agitations by mobilized citizens can have a restraining effect on the ruling establishments. While this doesn’t guarantee success, it can provide a template to similar future movements against entrenched order in the countries. Maybe a crisis was necessary to rip open the bandages of statecraft and treat the regional wounds with greater cooperation.

Malik Moin Abbas is a Master’s in Liberal Studies (IR) student at Ashoka University.

Image credits – London School of Economics

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