After the covid-19 Pandemic, the Russian-Ukraine War has led to financial instability and a Financial crunch around the globe. This situation has brought nations like Srilanka and now Pakistan and Bangladesh under its shadow. After Srilanka, Pakistan is facing a risk of debt default. The reason for it is reducing foreign exchange reserves. Moreover, the economic situation in nations like Myanmar, Maldives, and even Nepal has been declining.
Russia invaded Ukraine in February and it has been five months now. But, the war is showing no signs of an end. While Moscow is gaining an upper hand in the east, Ukraine is fighting with all its might. While the US and Europe have implemented multiple sanctions on Russia, the latter is showing that it is not politically or financially affected by it.
It means that the situation can continue till President Putin’s aims are not met. Amidst this, the situation has caused an economic crisis around the globe. Particularly, the developing nations have been dealing with high inflation, expensive fuel, and food shortage which can continue for a long time. We can say that India’s neighborhood is facing an economic crisis. Moreover, Sri Lanka has shown how the situation can get worse and trigger a political crisis.
Rising Political Crunch In Pakistan
A big reason for the ousted Pakistan Prime Minister’s exit was the financial turmoil in Pakistan. As there are reports of Pakistan authorities contacting US officials for some financial aid, the former PM is taking a chance to criticize US leadership and the new government. Pakistan already owes more than 25% of its external debt to China.
In Srilanka, the World Bank has made it clear that they won’t provide any more Financial help till a new macroeconomic policy framework comes in place. The Situation in Bangladesh is not that severe. But, there are signs of a declining economy and the country is taking steps to solve the issue. Moreover, the regime of PM Sheikh Hasina has shown no signs of political turmoil.
Summing up,
The international situation has impacted the developing economies in the world. The neighbor of India, Sri Lanka has already witnessed an economic collapse. On the other hand, Pakistan and Bangladesh are showing signs of a declining economy. It will be important for India to focus on and maintain its economy while keeping a close eye on the financial situation of its neighbors and the world.
