Nepal has recently witnessed historic protests leading to the overthrow of its government, marking a significant moment in a region that has experienced similar upheavals. This event follows the ousting of leaders in Sri Lanka in 2022 and Bangladesh in 2024, pointing to a pattern of unrest in three of the five smaller South Asian countries bordering India.
While these nations—Bangladesh, Bhutan, Maldives, Nepal, and Sri Lanka—are distinct in their own right, they share several commonalities. They are strategically situated, attracting attention due to their connections with global powers like China and the United States, and have held democratic elections since 2008. By 2020, all had reached at least lower middle-income status, as recognized by the World Bank, yet this economic growth hasn’t shielded them from political instability.
Understanding these upheavals requires looking beyond immediate events to the structural issues at play. Poor governance has certainly played a role, but it’s essential for international policymakers to address the underlying structural conditions that contribute to such turmoil. Development finance institutions and influential nations must focus on ensuring South Asia’s continued prosperity amid global uncertainties.
Economic challenges are a recurring theme in Nepal, Bangladesh, and Sri Lanka. Sri Lanka’s unprecedented debt default and food scarcity illustrate its economic woes, while young citizens in Bangladesh and Nepal have grown frustrated with limited job prospects and elite corruption. Despite these issues, these economies have exhibited growth, moving from low-income to lower middle-income status over the past two decades. However, this success comes with reduced access to concessional lending, potentially hampering their economic transitions.
The pressure from strategic competition involving the United States, China, and India further exacerbates these challenges. Nepal, for instance, finds itself navigating between these powers while pursuing its development goals, such as infrastructure projects under China’s Belt and Road Initiative and a grant from the US’s Millennium Challenge Corporation.
As Nepal stabilizes its political landscape under interim leader Sushila Karki, it plans for elections in March and can learn valuable lessons from its neighbors. Sri Lanka’s reformist president, Anura Kumara Dissanayake, has managed to establish a positive relationship with India, suggesting a possible model for Nepal to emulate. Despite challenges, a positive relationship with regional powers could offer stability and progress.
The situation in South Asia underscores the importance of addressing not only local governance issues but also the broader strategic and economic factors at play. While smaller states may not always be a priority in global strategies, their stability is crucial for larger powers focusing on the Indo-Pacific region. Ensuring their political and economic stability is in the best interest of all involved, as these nations navigate a complex web of domestic and international pressures.