South Asia remains a very challenging and difficult concept, particularly in India. It is seen as a way of keeping India bogged down in its neighbourhood. But the source of India’s potential, and its greatest force multiplier, is its neighbourhood. If India is to take its rightful place on the international stage, it will need to be a key stakeholder in South Asia and its prosperity; and I will consider four major challenges which South Asia faces today.
The first is, of course, the challenge of the economy, which every South Asian nation faces today. There are many drivers to the current economic crisis and it has bled into foreign policymaking as well. One of these drivers of economic disruption has been the Covid-19 pandemic, of course. World Bank estimates suggest that regional growth will fall between 2-3%; we should be clear that the economic outlook for South Asia is fairly bad. Covid-19 has not just affected GDP growth, but also manufacturing, tourism, and remittances. These are major, diversified sources of income for almost every South Asian nation. The second big driver has now come from the Russian invasion of Ukraine, which has put further pressure on food and energy security when both were already unstable in South Asia. The third driver has been classic economic mismanagement, stemming from several South Asian states choosing to follow a populist model in recent years. Demonetisation in India has had a substantial impact at all levels of the economy. Both Pakistan and Sri Lanka have chosen to take on major debt from China, and both have already encountered difficulty in repaying those loans. Other bad decisions have stemmed from the desire to curb foreign exchange outflows in response to these debt crises, including Sri Lanka’s now-infamous decision to ban fertilisers.
The second major challenge which South Asia faces today is the rise of hypernationalism. And this is in a sense linked to the economy because if you look globally, we’ve seen the rise of hypernationalist populist majoritarians across Europe as well as North and South America. Some have theorised that this populist turn is the outcome of a popular revulsion to the impact of globalisation following the 2007-08 global financial crisis. Leaders came to power who appealed to a sense of a majoritarian grievance, a desire for economic conservatism, of anti-immigration, and of xenophobia. Illiberalism has also followed these anti-minoritarian trends, including crackdowns on the free press in India, Pakistan, Sri Lanka, and Bangladesh. No one is exempt. India has recently enacted majoritarian legislation, including the Citizenship Amendment Act.
The third big challenge in South Asia is great power conflict. In South Asia this specifically means the continuation of a theatre of conflict between the US and China, revived after the perceived US exit from the region. Now we're seeing the US come back in with new initiatives, whether it is with the IndoPacific Economic Forum or the Quad itself; these projects aim to produce a counternarrative to the Chinese narrative in the region. These efforts are not always successful; I will take the Covid-19 vaccine initiative as an example. The Quad leaders committed in March 2021 to manufacture 1 billion vaccines, which were meant to be American vaccines manufactured in India, with Japanese and Australian funding helping to make these vaccines available across the IndoPacific region. As of September 2022, three months away from the self-imposed deadline to deliver those billion vaccines, not a single vaccine has been produced under this framework. Regardless of the efficacy of Chinese-made vaccines, they have been distributed far and wide in South Asia. Even countries like Bhutan, which has thus far managed to stay away from other aspects of great power conflict in the region, accepted Covid-19 vaccines from China. But these power plays do not exist on an axis, tilting in one or another direction; they are dynamic interactions. If one challenges the sustainability of BRI projects, for example, then one must have a counter-offer of sustainable financing for alternative projects or for the same projects. New Delhi must take a greater leadership role in providing economic assistance and investment in the region – in the Indian Ocean, and on the Indian subcontinent – if it is to take a greater leadership role in geopolitics.
Finally, India cannot act as a counter to any of these other forces, any of the forces that are plaguing South Asia today, unless it is able to present itself as an example to the rest of the region. At various points in India's history, it has been able to do that. But India today cannot cast itself as a counter to China by invoking its democratic system unless it is prepared to adhere to those very principles that the democratic constitution speaks of. It has to demonstrate that it is a pluralistic, representative, inclusive power which respects the right of each citizen. While neighbours may or may not emulate India at various times, these qualities are required if the government in New Delhi is to differentiate itself from any of the other players that may pose a threat to stability and prosperity in the region.