South Asian financial tragedy is not ending soon!
As a citizen of South Asian countries, the recent turbulence in the economic sector of these countries is really a big concern for the 2 Billion people living here. the incident in Sri Lanka is not forgotten properly and now the same economic collapse has occurred in Pakistan. Besides the ongoing debate is still on the collapse of 'Adani' with the recent research published by the Hindenburgresearch and the enormous crash on the stocks make the economy of India into a more problematic situation. And also for Bangladesh is suffering from a great Dollar crisis and many imports have been postponed due to the crisis. And the power sector of the country is facing the darkest hour in history. Besides the dollar crisis, the corruption with Adani has shaken the ground people about the disastrous policy of the contract.
Adani, in its quotation, demanded about $400 for each tonne of coal for running its coal-based Godda power plant in Jharkhand though the same coal can be bought for $250, according to the PDB.- New Age
Not only the price manipulation but also there is the illogical amount of capacity charge trap with the contract which is not my main topic to discuss here. These South Asian countries comprising eight countries including India, Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan, Maldives, and Afghanistan, have been struggling with economic challenges for decades. While some countries have experienced economic growth, others have suffered from chronic poverty, unemployment, and a lack of access to basic necessities.
The most liable and concerning issue contributing to such economic collapse in South Asia is widespread corruption. Corruption is a pervasive problem in most of the countries in the region, with politicians and government officials embezzling public funds, awarding contracts to cronies, and taking bribes. Corruption has led to inefficient use of public resources, reduced foreign investment, and undermined public trust in government institutions. Moreover, corruption has contributed to income inequality, as the benefits of economic growth are often skewed toward the wealthy and powerful.
Another strong issue that is liable for the strong dollar crisis is money laundering which is very common in the third-world countries corruption has made it into an art with the misuse of political power and even many government officials are associated with it and making their home in developed countries known as the 'Begumpara' which has been highlighted in the Economist's recent report. And thus money laundering has become a significant problem in South Asian countries and is often associated with organized crime, drug trafficking, and even terrorism. Bangladesh has seen an enormous increase in money laundering activities in recent years, with criminal organizations taking advantage of lacking regulations, weak enforcement, and corruption. With politicians and government officials often embezzle public funds, award contracts to cronies, and take bribes which have created an environment where illicit funds can be moved across borders with relative ease, without fear of detection or prosecution.
Another factor contributing to money laundering in South Asian countries is the region's role as a major transit point for illegal drugs. Drug trafficking generates significant profits for criminal organizations, which they then seek to launder through the region's financial systems. The growth of online platforms and digital currencies has also made it easier for criminals to move funds across borders without detection as the infrastructure in this area is not so strong. The weak regulatory frameworks and enforcement mechanisms have also contributed to the problem of money laundering in Bangladesh. Also, the Hundi business, over and under-invoicing is the key reason behind such money laundering. Bangladeshi govt. is trying to take back that money with the proper channel but it is not an easy task at all!
Another primary reason for the economic collapse in South Asia is a lack of investment in infrastructure and human capital. Most of the countries in the region suffer from the inadequate road, rail, and air transport networks, and unreliable power supplies. These shortcomings have led to reduced productivity, increased transportation costs, and hindered the growth of trade and commerce. Additionally, the region faces challenges in human capital development, with high illiteracy rates, low educational attainment, and a shortage of skilled workers. The lack of economic diversification in this region has also contributed to the financial collapse of the region. Many countries in the region depend heavily on a few primary exports, such as textiles, agricultural products, and raw materials, which are subject to price fluctuations and global demand.
Though Bangladesh is the world's 8th most populous country unluckily the region has struggled to create an environment conducive to entrepreneurship and innovation, limiting opportunities for the development of new industries and technology-based enterprises. I think the opportunity is really very big but the political unsteadiness, corruption, and various safety issues are not favorable for international investments! And also the recent COVID-19 pandemic has exacerbated the economic challenges in this area with many countries experiencing negative growth rates, high unemployment, and rising poverty rates which need to be recovered but the speed is relatively lower than the other countries for the same reasons.
What is your thought about the current situation economic condition of South Asian countries like Bangladesh or India? Already Bangladesh has asked IMF for a loan-
But there is a glimmer of hope for the country’s beleaguered finances. At the beginning of February, Bangladesh received a dose of financial relief as the International Monetary Fund approved a $4.7bn loan programme. Bangladesh has become the third South Asian nation after Sri Lanka and Pakistan to seek IMF loans, but unlike its crisis-hit neighbours, Bangladesh has not asked for a bailout package, rather a stabilization package. - Aljazeera
Thanks a lot for your time and attention, I will catch you at the next one.
Have a great day!
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Dear @tanzil2024 !
I hope you don't have any current financial hardship!
Yes, my friend I have no such hardship now but the future is uncertain, we have nothing to deal except hope for the best.