Some people may be gleefully predicting a Sri Lanka-like economic collapse in India. But for the sake of a stable world order, India should not go the Sri Lanka way and once we look at facts and figures, we do realise that India is actually not heading in that direction
Protesters dance shouting slogans against president Gotabaya Rajapaksa outside his office in Colombo, Sri Lanka. AP
Sri Lanka’s economic collapse keeps getting worse. What started as an economic crisis actually took the shape of social unrest and has now metamorphosed into a political upheaval. Most of the Rajapaksa family members are now out of power. President Gotabaya Rajapaksa is the latest victim of public anger. After his residence was stormed by tens of thousands of protesters, Gotabaya confirmed his resignation. The future of the country now hangs in balance. Amid soaring inflation and rising food prices, bad investor sentiment, dwindling foreign exchange reserves and a crippling agrarian crisis, no one knows where Sri Lanka is headed.
Sri Lanka President Gotabaya Rajapaksa, right, waves to the media as he leaves with his wife Ayoma. AP/FILE
Back home for India, the priority should be to ensure that the geopolitical and geostrategic consequences of Sri Lanka’s economic and political crisis are properly controlled. New Delhi has to ensure that it doesn’t lose out to Beijing in the race of shoring up influence in the island country that is strategically located in the Indian Ocean Region (IOR). However, within the so-called intelligentsia and liberal media circles in India, the Sri Lankan crisis has become a matter of pushing their political agenda.
There has been a strange sense of jubilation amongst a certain section of YouTubers, journalists and politicians. They claim that they have been vindicated by what is happening in Sri Lanka. They have thinly veiled theses to back their claim. They are uniting their voices to claim that the ongoing crisis in Sri Lanka is a consequence of decades of majoritarianism and hyper-nationalism, which supposedly reached its peak under the leadership of Gotabaya Rajapaksa. They also say that India is heading towards an economic and political collapse as severe as the one being faced by Sri Lanka currently. Why? Well, they say that India too has a majoritarian government.
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Whether the present regime in India is majoritarian or not is however not the matter of concern. Frankly, no link can be established between the election of a majoritarian government and an economic collapse. Had there been any such link, Sri Lanka would have probably slipped into a much bigger economic downfall when the civil war in the country was at its peak. What those trying to draw a parallel between India and Sri Lanka don’t seem to understand is that India is too big to fail. India cannot and should not go the Sri Lanka way. And it isn’t even moving towards a Sri Lanka-styled collapse.
At the outset, it is utterly bizarre to compare India with Sri Lanka. The very character of the two economies is poles apart. Sri Lanka is a small, island economy dependent on tourism and agriculture. India, on the other hand, is a huge economy with a vibrant services sector, a resurgent manufacturing sector and a huge population. So, no parallels can be drawn between the two countries. The only argument that the Indian opposition and the left-leaning intelligentsia is left with is the bogey of a majoritarian regime. They won’t talk about dynastic succession, family dominance and nepotism in Sri Lankan politics as a cause of the crisis. Nor will they talk about China’s mounting debt in Sri Lanka’s economy, the impact of the Pandemic and damaged tourism sector, and some terrible decisions like suddenly banning import and use of fertilisers and pesticides.
However, the dishonesty of a monopolistic intelligentsia and a clueless opposition is not the main issue here. The fact remains that India’s present regime was never taking it in the direction in which Sri Lanka has headed. Consider the World Bank’s growth forecast for 2022 and 2023. It has made some gloomy predictions for the past two years. Amidst the Ukraine war and other global issues, the world GDP growth is likely to go down from 5.7 per cent in 2021 to 2.9 per cent in 2022. The world is slipping into a recession but the only shining point is India. The country is bound to be the fastest-growing major economy with 7.5 percent GDP growth in 2022 and 7.1 per cent growth in 2023.
On the other hand, China is expected to clock growth rates of 4.3 per cent in 2022 and 5.2 per cent in 2023. No other economy comes even close to India in terms of GDP growth for these two years. So, far from collapsing like the island economy of Sri Lanka, India is actually emerging as a ray of hope for the global economy. India is becoming too big an economy to fail and it has actually emerged as a ray of hope amidst gloomy predictions for the world economy. India’s ambitious growth story must therefore continue for the sake of global stability.
And it is not just the growth numbers that look positive but the very foundations of the economy have also been strengthened over the past one decade or so. The number of unicorns in the country has grown from a mere 4 in 2014 to 101. India has also become the world’s 6th biggest economy in the world and it has also been attracting a sizeable share of Foreign Direct Investments (FDI) in recent years and its Foreign Exchange reserves have hit the $600 billion mark. To top it all, the present regime has proven to be a pro-market government with no knee-jerk reactions to upset the investor sentiment unlike Sri Lanka. This is why the country’s Ease of Doing Business Index rankings too had jumped from 142 to 63 before the World Bank abolished the index.
The bizarre thesis comparing India’s situation with the economic collapse in Sri Lanka therefore reeks of economic illiteracy and vindictive mindset. For reasons best known to them, some people may be gleefully predicting a Sri Lanka-like economic collapse in India. However, for the sake of a stable world order, India should not go the Sri Lanka way and once we look at facts and figures, we do realise that India is actually not heading in that direction.
The author is a columnist who writes about international affairs and developments in the defence sector. The views expressed in this article are those of the author and do not represent the stand of this publication.
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