There are grim predictions for global economic outlook for 2022 amid the outbreak of Omicron variant of COVID -19. There are worrying signals moving in waves from one end to the other across the world as the virus is catching up continents at supersonic speed.
The situation evolving in different regions of the world is alarming, and it is particularly so in South Asia, despite valiant efforts of India to vaccinate near-total population in the country.
But the fact is that the economy has been hit hard in the region, like all other regions, because of the inflation, high prices and shortage of commodities.
In this scenario, no single country can do everything for the region. It requires a collective effort with leadership rising to the occasion, cutting across the political and geographical divisions.
This region is not battling the coronavirus, it has also virus of conflict, terrorism and cross border mischiefs. These factors have not been taken into account by the world leaders in economy as they don’t want to burn their fingers in the flames ignited by some of the countries that see their interests in bleeding others.
International Momentary Fund chief Kristalina Georgieva has warned that the repeated adverse impact on the economy could push at least 100 countries to extreme poverty.
In South Asia, Afghanistan appears to be the potential candidate, because of more than one reasons. The pandemic, with the growing extreme conditions in Afghanistan and its spillover effect, can spell unforeseen situation for the whole region.
It is a matter of grave concern. The economic collapse of Afghanistan will move in rapids to other parts of the region. The conflict is already expanding.
Pakistan, the greatest supporter of Taliban in Afghanistan, by its own admission, is experiencing tough times as the TTP – Tehreek-e-Taliban Pakistan, an affiliate of Afghan Taliban, has reneged from its promises and started targeting Pakistani security forces and its strategic assets, dear to Islamabad-Rawalpindi combine. Within Pakistan, too, the things are slipping out of hands of the establishment that was once the anchor sheet of the nation.
That Balochistan was simmering and the people were desperate to unshackle themselves from the suppression of the establishment, was known to the world, the trouble is also brewing up in a big way in Khyber Pakhtunkhwa, the home state of Prime Minister Imran Khan is more than obvious. His own party’s leading lights have criticised and challenged the PM the way government is treating the province and its people.
Arrows were directed against him by the Defence Minister Pervez Khattak and other leading members of PTI for neglecting the province in distribution of gas and electricity. This political revolt has surfaced after the PTI lost local elections in the province, sending warning signals to the ruling party.
These developments, along with its penchant to trouble its neighbourhoods, particularly India, and its tendency in drawing sadistic pleasure from the discomfiture India faces in eastern Ladakh because of the Chinese aggression, contribute negatively to the overall situation in SAR.
In today’s world, each and every action that disturbs the region is rife with a potential crises that can slip out of hands of the leadership.
This is the time, the region’s leadership should join hands and address the issues confronting the region. Georgieva described the attempts to put the economy on the pre-pandemic path like “navigating the obstacle course”. These words should be taken as a warning, which if ignored can have long-term consequences for all the countries in the South Asian Region as well.
Its seriousness has been further underscored by the World Bank in its latest report for 2022 titled, “Global Economic Prospects” . It finds SAR far behind the advanced economies. The report has given a list of the developments, supported with its facts and figures to suggest that the region, especially Pakistan and India need to do more to catch up with advanced economies.
These observations of the World Bank regarding South Asia are revealing; “In SAR, relatively limited (as compared to other regions, having substantially larger output gaps with the pre-pandemic trend) macroeconomic support during the pandemic and obstacles in COVID-19 vaccination in 2021, together with lingering financial challenges in India, will contribute to a shortfall in output of nearly 8 percent relative to the pre-pandemic trend.”
Here, I think, the World Bank has omitted a crucial point that India has crossed more than 1.5 billion vaccine doses.
This has helped the world to see a vast amount of population on the planet vaccinated. This is no mean achievement. But, at the same time, the warnings of the IMF and the World Bank, need to be taken seriously.
India has to play its role in leading the economic growth in the region, and draw a roadmap that can resolve issues and strengthen economy of the region. The crumbling economy can endanger the whole prospect of recovery.
India has a greater responsibility in leading the economic forces in SAR, that is a must for stability of the region, which is so crucial to the world’s stability, economy, and human development.
Disclaimer: The views and opinions expressed in this article are the personal opinions of the author.
The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.