‭Economics‬

E‭ conomic Crises of India’s Neighbouring countries‬

‭[Sri Lanka, Pakistan and China]‬

‭Mohammad Shoaib Sulthan, XI B, Ryan International School Sharjah(2024-2025)‬

‭Acknowledgements‬

‭I would like to express my sincere gratitude to all those who supported and‬
‭guided me throughout this project.‬

‭First and foremost, I am grateful to my professor, Mrs. Remya, for their‬

‭invaluable guidance and encouragement. Their expertise in economics was‬
‭instrumental in shaping my research and understanding.‬

‭I extend my gratitude to my principal Ms. Daizy Paul for the moral support‬
‭extended during the projects tenure‬

‭I also acknowledge with a deep sense of reverence, my gratitude towards my‬

‭parents, classmates, friends and other faculty members for their valuable‬
‭suggestions given to me in completing this project.‬

‭Date…………………. …………………………..‬

‭Name of student‬

‭2‬
‭Objectives‬

‭This project aims to achieve a comprehensive understanding of the economic‬

‭crises currently gripping India's neighbours. Here are some specific‬
‭objectives:‬

‭1.‬ ‭Identify and Analyse Key Crises:‬‭Pinpoint the most‬‭prevalent‬

‭economic crises impacting India's neighbouring countries. This could‬
‭include issues like high inflation, mounting debt, currency depreciation,‬
‭and unemployment.‬
‭2.‬ ‭Comparative Analysis:‬‭Conduct a comparative analysis‬‭of the‬
‭economic crises across different countries. Explore similarities and‬
‭differences in the nature and root causes of these crises.‬
‭3.‬ ‭Impact on India:‬‭Assess the potential impact of these‬‭economic crises‬
‭on the Indian economy. Consider factors like trade, investment flows,‬
‭and regional stability.‬
‭4.‬ ‭Policy Recommendations:‬‭Develop evidence-based policy‬
‭recommendations for India in response to the economic crises in its‬
‭neighbourhood. This could involve strategies to mitigate negative‬
‭impacts and foster regional economic cooperation.‬
‭5.‬ ‭Future Considerations:‬‭Explore potential future scenarios‬‭for the‬
‭economic landscape in India's neighbourhood. Analyse how these‬
‭crises might evolve and their long-term implications.‬

‭By achieving these objectives, this project can provide valuable insights into‬
‭the economic challenges faced by India's neighbours and their potential‬
‭repercussions for India itself.‬

‭3‬
‭Contents‬

‭1.‬‭Introduction‬
‭2.‬‭Sri Lanka‬
‭3.‬‭Pakistan‬
‭4.‬‭China‬
‭5.‬‭India‬
‭6.‬‭How india can help Sri Lanka‬
‭7.‬‭How india can help Pakistan‬
‭8.‬‭How india can help China‬
‭9.‬‭Bibliography‬
‭10.‬ ‭notes‬

‭4‬
‭Introduction‬

‭Economic and financial crises are periods of significant disruption in the financial system‬
‭and the broader economy. Imagine a domino effect – a seemingly small event triggers a‬
‭chain reaction, leading to a widespread loss of confidence, asset value decline, and‬
‭economic instability.‬

‭Types of crises:‬

‭●‬ ‭Financial Crisis‬‭: specific breakdown in the financial‬‭system, typically involving‬

‭banks or other financial institutions.‬
‭●‬ ‭Currency Crisis:‬‭Rapid devaluation of a currency,‬‭often fueled by a lack of‬
‭confidence in the issuing government's ability to manage its finances.‬
‭●‬ ‭Debt Crisis:‬‭Inability of a government or corporation‬‭to meet its debt obligations.‬
‭●‬ ‭Economic Crisis:‬‭A broader downturn in economic activity,‬‭often triggered by a‬
‭financial crisis.‬

‭Causes:‬‭There's no single cause for an economic crisis.‬‭A complex interplay of factors can‬
‭contribute, including:‬

‭●‬ ‭Excessive Risk-Taking:‬‭Financial institutions and‬‭individuals taking on‬

‭unsustainable levels of debt or engaging in risky investments.‬
‭●‬ ‭Asset Bubbles:‬‭Periods of inflated asset prices that‬‭eventually burst, leading to‬
‭sharp declines.‬
‭●‬ ‭Policy Failures:‬‭Inadequate government regulation‬‭or flawed economic policies can‬
‭exacerbate existing vulnerabilities.‬
‭●‬ ‭External Shocks:‬‭Unexpected events like pandemics, natural disasters, or‬
‭geopolitical instability can trigger economic turmoil.‬

‭5‬
‭Sri Lanka‬‭(‬‭ශ්‍රී ලංකා‬
‭ප්‍රජාතාන්ත්‍රික සමාජවාදී ජනරජය)‬
‭Why is Sri Lanka facing an economic crisis?‬

‭1.‬ ‭It emerged from a 26-year civil war in‬

‭2009 But during the war Sri Lanka was‬
‭already in a critical situation and in‬
‭addition had budget deficits which‬
‭forced them to seek help from the IMF‬
‭and raise finance of $2.6 Billion by the help of a loan.‬
‭2.‬ ‭In the year 2013 exports decreased and the growth halved and also an increase of‬
‭imports was seen.‬
‭3.‬ ‭Sri Lanka again approached IMF in 2016 for a $1.5 billion loan‬
‭4.‬ ‭The Easter bomb blasts in the recent years affected tourism in Sri Lanka drastically‬
‭impacting their foreign currency and their foreign exchange reserves.‬
‭5.‬ ‭The pandemic in 2020 made the situation in Sri Lanka worse by restricting exports,‬
‭imports and tourism‬

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‭Impact of the crisis:‬

‭1.‬ ‭Shortages of medical equipments:‬

‭Sri Lanka does not have the latest equipments for medical services and is also‬
‭importing 85% of many of their medicines including painkillers and now due to the‬
‭economic crisis lacks the supply and has not been able to available to all the people‬
‭who require it‬

‭2.‬ ‭Daily power cuts:‬

‭Power cuts suggest that there is no electricity and if there is no electricity it becomes‬
‭next to impossible to work. The work be of any nature be it writing, reading,‬
‭studying, washing, cooking etc.‬

‭3.‬ ‭Fight for fuel:‬

‭Long lines at fuel stations are a common sight in Sri lanka, as 40% of the country's‬
‭fuel is sourced from petroleum and the rest mainly by hydroelectric sources. This‬
‭has caused frequent power cuts in most major towns and cities causing sri lanka to‬
‭depend on international powers for their essentials.‬

‭4.‬ ‭Food shortages:‬

‭Due to the government's quick decision to switch to organic farming ,cold turkey,‬
‭multiple crop failures as well as rapid increases in malnutrition were documented,‬
‭wholly reducing the HDI of the developing country.‬

‭7‬
 ‭5.‬ ‭Inflation at records of 50%:‬

‭There has been a continuous increase in Sri Lanka's inflation percentage which has‬
‭led to a scarcity of essentials among the general population. The medical industry‬
‭has also taken a hit with surgeons refusing to do surgeries due to lack of resources.‬

‭6.‬ ‭Devaluation of currency:‬

‭Sri Lankas central bank devalued the currency by 15%, mainly affecting the middle‬
‭and lower classes‬

‭8‬
‭Steps taken and that can be taken to alleviate the crisis:‬

‭In April of 2022, the president, Gotabaya Rajapaksa imposed a curfew as well as a state of‬
‭emergency over the country as fears over uprisings rose, allowing the military police to get‬
‭involved and arrest protestors, labelling them “uprisers”. Again in may of the same year‬
‭after Gotabaya fled to Malé with his wife and two bodyguards, the then vice president‬
‭assumed power (Wickremsinghe) reinstating a nationwide curfew as well as state of‬
‭emergency, banning all imports of luxury vehicles, fertilisers as well as food items such as‬
‭turmeric etc, to prevent foreign currency outflow. The government has also issued requests‬
‭to countries such as Russia and Qatar to provide Oil at lower prices to help cope with the‬
‭economic crisis while allowing them to produce and regain economic stability.‬

‭It is interesting to note that while Sri Lanka has established schemes like the compulsory‬
‭contributory pension for migrant workers etc,they have declined the IMF’s bailout as it‬
‭would increase their dependency while increasing their inflow of foreign capital.‬

‭The government should provide more for their domestic problems rather than focusing on‬
‭growth by making more sectors public and open to investment rather than privatisation,‬
‭while also liberalising their private sectors through tariff reductions, tax cuts etc. this will‬
‭increase Sri Lanks development as a whole after which they can focus more on their‬
‭economic prosperity by re-privatising more sectors causing capital inflow and GDP growth.‬

‭9‬
‭Who is helping Sri Lanka?‬

‭Indian and Japanese prime ministers, Narendra Modi and Fumo Kishida, have both‬
‭decided to help the island nation. On May 24 after the QSD [ Quadrilateral Security‬
‭Dialogue] meeting between Australia, India and Japan, the‬‭Colombo Gazette‬‭reported that‬
‭the prime ministers of the aforementioned countries have facilitated a 100 million USD‬
‭loan between the Japan bank for International Cooperation(JBIC) and Export-Import bank of‬
‭India(Exim bank of India) as an outcome of the Quad-Vaccine partnership.‬

‭India was already helping Sri Lanka before the existence of this agreement and has assisted‬
‭with several billion USD to help Sri Lanka relieve themselves of their debts. This consisted‬
‭of shiploads of large quantities of fuel, humanitarian help, cooking gas and also medical‬
‭supplies.‬

‭Conclusion‬

‭Sri Lanka's economic growth slowed after 2016, hitting negative territory in 2020 due to the‬
‭pandemic and heavy debt burden. Despite a brief recovery in 2021, the future remains‬
‭uncertain.‬

‭High debt repayments and the Russia-Ukraine conflict threaten the tourism and export‬
‭industries – key sources of foreign exchange. The conflict also impacts global oil prices,‬
‭straining Sri Lanka's resources. The EU's potential withdrawal of trade benefits further‬
‭hinders export growth.‬

‭Domestically, public anger towards the government's handling of the crisis is rising. This,‬
‭coupled with international pressure regarding economic policies, creates significant‬
‭hurdles for Sri Lanka. The government might need to seek IMF assistance despite past‬
‭resistance.‬

‭10‬
‭Pakistan‬ ‭(‬ ‫‮اسالمی ‬‮جمہ وریہ ‬‮پاکستان‬‭)‬ ‬
‭Pakistan today is a melting pot of crises. The‬
‭events leading up to this year’s elections and‬
‭what followed has only increased the‬
‭mistrust between the people and the state.‬
‭Further, the expansion in the role of the‬
‭military in both politics and the economy – through the subversion of the constitution and‬
‭suppression of political freedoms – leaves the country ill-prepared to address the many‬
‭challenges that it faces.‬

‭Why is Pakistan facing economic crises?‬

‭Pakistan's economic crisis is a complex issue with several contributing factors:‬

‭1.‬ ‭High External Debt: Pakistan has relied heavily on borrowing from abroad for years.‬
‭This has created a situation where a large portion of their income goes towards just‬
‭paying interest on the loans, limiting funds for other areas.‬
‭2.‬ ‭Poor Economic Management: Some argue that economic policies haven't focused on‬
‭long-term growth, leading to inefficiencies and a lack of diversification in exports.‬
‭3.‬ ‭Political Instability: Frequent changes in government can make it difficult to‬
‭implement long-term economic reforms. The current political climate adds to the‬
‭uncertainty.‬
‭4.‬ ‭Global Factors: The war in Ukraine has driven up global fuel prices, impacting‬
‭Pakistan's import costs.‬

‭11‬
‭Impact of the crises:‬

‭Pakistan's economic woes have a ripple effect throughout the country, impacting people‬
‭and sectors in various ways:‬

‭●‬ ‭Increased Poverty and Hunger: Rising food and essential good prices due to inflation‬
‭push more people into poverty, struggling to afford basic needs.‬
‭●‬ ‭Unemployment and Underemployment: Businesses may struggle to stay afloat,‬
‭leading to job cuts and a larger pool of unemployed or underemployed workers.‬
‭●‬ ‭Reduced Public Services: The government might cut spending on social programs‬
‭like healthcare and education due to limited funds.‬
‭●‬ ‭Social Unrest: Frustration over economic hardship can lead to protests and social‬
‭unrest, potentially destabilising the situation.‬
‭●‬ ‭Security Concerns: A weakened economy can limit Pakistan's ability to address‬
‭security threats.‬

‭The crisis also affects Pakistan's international standing:‬

‭●‬ ‭Debt Default Risk: A high debt burden increases the risk of Pakistan defaulting on‬
‭loans, further damaging its creditworthiness.‬
‭●‬ ‭Reduced Investment: Foreign investors might be wary of putting money into an‬
‭unstable economy.‬
‭●‬ ‭High Inflation: The cost of everyday goods has risen sharply, making it difficult for‬
‭many Pakistanis to afford basic necessities.‬
‭●‬ ‭Currency Depreciation: The Pakistani Rupee has lost value compared to other‬
‭currencies, making imports more expensive.‬
‭●‬ ‭Balance of Payment Crisis: Pakistan struggles to earn enough foreign currency‬
‭through exports to cover the cost of imports.‬

‭The situation is serious, and Pakistan is working with international organisations like the‬
‭IMF to find solutions.‬

‭12‬
‭Steps taken or could be taken to alleviate the situation:‬

‭Controlling Spending:‬

‭Austerity Measures: The government has implemented cutbacks, reducing ministerial perks‬
‭and discretionary spending to save money [High taxes, cost-cutting formula: How Pakistan‬
‭is dealing with economic crisis? | Today News - Mint].‬

‭Boosting Revenue:‬

‭Tax Reform: There's a push to improve tax collection and potentially broaden the tax base‬
‭to generate more government income [Pakistan: Economic recovery, inclusive growth‬
‭require bold reforms - World Bank Blogs].‬

‭Debt Management:‬

‭IMF Bailout: Pakistan is seeking a bailout program from the International Monetary Fund‬
‭(IMF) for financial assistance and policy guidance [Pakistan's Economic Crisis: Unveiling the‬
‭Causes, Impacts, and Remedies | ORIC - Superior University].‬

‭Debt Restructuring: Exploring options to potentially negotiate more favorable repayment‬

‭terms with creditors could ease some of the pressure [Pakistan's Existential Economic‬
‭Crisis | United States Institute of Peace].‬

‭Growing the Economy:‬

‭Export Focus: There's an emphasis on developing a stronger export sector to bring in more‬
‭foreign currency [Taking Pakistan Out of Economic Crisis: Are We Doing Enough? | The‬
‭Friday Economist]. This could involve diversifying exports beyond traditional goods.‬

‭Investment Strategy: Attracting foreign direct investment is crucial for economic growth.‬
‭Pakistan may need to improve its business environment to entice investors.‬

‭Energy Sector Reform: Investing in renewable energy and improving efficiency in power‬
‭generation and distribution could reduce reliance on expensive imports and free up‬

‭13‬
‭resources for other areas [Pakistan: Economic recovery, inclusive growth require bold‬
‭reforms - World Bank Blogs].‬

‭Challenges Remain:‬

‭Implementing these measures effectively and navigating political complexities will be key to‬
‭success. Austerity measures can be unpopular, and tax reform can be difficult.‬

‭Pakistan's economic recovery hinges on its ability to address these challenges and create a‬
‭stable and attractive environment for growth.‬

‭Who is helping Pakistan?‬

‭●‬ ‭International Monetary Fund (IMF): This international organisation provides financial‬
‭assistance and policy advice to countries facing economic difficulties. Pakistan is‬
‭currently negotiating a bailout program with the IMF, which would offer them‬
‭much-needed funds in exchange for implementing specific economic reforms‬
‭[Pakistan's Economic Crisis: Unveiling the Causes, Impacts, and Remedies | ORIC -‬
‭Superior University].‬
‭●‬ ‭Friendly Countries: Pakistan has traditionally received economic aid from some of its‬
‭allies, particularly in the Middle East like Saudi Arabia and the United Arab Emirates.‬
‭These countries may provide loans or other forms of financial support [Pakistan's‬
‭Economic Woes: The Way Forward - The Diplomat].‬
‭●‬ ‭China: China is a close political and economic partner of Pakistan, and they have‬
‭invested heavily in infrastructure projects there through the China-Pakistan‬
‭Economic Corridor (CPEC) initiative. While the extent of future assistance is unclear,‬
‭China may offer some form of debt relief or new loans depending on negotiations‬
‭[Can Imran Khan tackle Pakistan's colossal economic woes? – DW].‬

‭14‬
‭Conclusion:‬

‭Pakistan's current economic crisis is a culmination of several interlinked factors, creating a‬

‭perfect storm that threatens its stability and prosperity. Years of reliance on external debt‬
‭have saddled the nation with a heavy burden, leaving limited resources for crucial‬
‭investments. Furthermore, economic policies haven't always prioritised long-term growth,‬
‭leading to inefficiencies and a lack of diversification in exports. This vulnerability is further‬
‭exacerbated by the ever-changing political landscape, making consistent economic reforms‬
‭a challenge. The recent global crisis in Ukraine has added fuel to the fire, pushing up fuel‬
‭prices and adding to Pakistan's import woes.‬

‭The consequences of this economic turmoil are widespread and deeply concerning. Rising‬
‭food and essential good prices due to inflation are pushing more people into poverty,‬
‭struggling to afford basic necessities. Businesses grapple to stay afloat, leading to job cuts‬
‭and a larger pool of unemployed or underemployed workers. The government may be‬
‭forced to cut spending on crucial social programs like healthcare and education, further‬
‭straining the social fabric. Frustration over economic hardship can lead to social unrest,‬
‭potentially destabilising the situation and impacting Pakistan's international standing. A‬
‭high debt burden increases the risk of default, damaging creditworthiness and deterring‬
‭foreign investors. The Pakistani Rupee's depreciation makes imports more expensive,‬
‭hindering economic activity, and creating a balance of payment crisis.‬

‭Despite the seriousness of the situation, Pakistan is not alone. International organisations‬
‭like the IMF are stepping in to offer financial assistance and policy guidance. Additionally,‬
‭friendly countries and partners like China are potential sources of support. To navigate out‬
‭of this crisis, several crucial steps need to be taken. Implementing austerity measures and‬
‭tax reforms can improve government finances. Negotiating debt relief or restructuring with‬
‭creditors can also ease the burden.‬

‭The long-term solution lies in fostering a robust and sustainable economy. Enhancing the‬
‭export sector by diversifying beyond traditional goods is crucial to bring in more foreign‬
‭currency. Creating a business-friendly environment will attract foreign direct investment, a‬
‭vital engine for growth. Investing in renewable energy and improving efficiency in power‬

‭15‬
‭generation can reduce reliance on expensive imports and free up resources for other‬
‭sectors.‬

‭The road ahead for Pakistan's economy is undoubtedly challenging. However, by‬
‭acknowledging the root causes of the crisis, implementing sound fiscal policies, and‬
‭fostering a more vibrant and diversified economy, Pakistan can overcome these obstacles‬
‭and achieve long-term stability and prosperity.‬

‭16‬
‭People’s Republic of China‬‭(‬‭中华人民共和国‬‭)‬
‭China's economic situation is complex. While some see a‬
‭full-blown crisis, others view it as a period of slower growth‬
‭with significant challenges.‬

‭●‬ ‭Slowdown:‬‭Growth rates are down from China's‬

‭historical highs.‬
‭●‬ ‭Debt:‬‭High debt levels, particularly in the real estate‬
‭sector, are a concern.‬
‭●‬ ‭Real Estate:‬‭A slump in housing sales and‬
‭construction is impacting the economy.‬
‭●‬ ‭Demographics:‬‭A shrinking workforce due to‬
‭population decline adds pressure.‬

‭The government is taking steps to address these issues, but the path forward is uncertain.‬
‭Some analysts believe China can navigate these challenges, while others fear a more‬
‭serious downturn.‬

‭Why is China facing an economic crisis?‬

‭China, once a story of rapid development and prosperity, is now facing economic‬
‭challenges which some call a crisis but most call an economic slump. Here's a deeper dive‬
‭into the reasons as to why China might be having this problem.‬

‭1.‬ ‭Debt burden: China's rapid economic growth was fuelled by huge credit injections,‬
‭leading to unforeseen amounts of debt. The real estate sector which received the‬
‭most rapidly took on loans to complete projects while the commoners piled‬
‭mortgages on their households. This debt now drags on growth, as businesses‬
‭struggle to repay and consumers remain wary‬
‭2.‬ ‭Real estate slump: once a pillar of growth, now a source of concern was caused by‬
‭rapid oversupply resulting in the decrease of real estate values. This created a‬

‭17‬
 ‭vicious cycle where owners dont sell because of the low prices and buyers and‬
‭banks, not investing due to the volatility of the sector as well as the poor quality of‬
‭construction locally known as “tofu dreg” projects.‬

‭*Seen here is rice crackers in the ceiling of a building.‬

‭3.‬ ‭Demographic shift: China's population is shrinking rapidly with a growing number of‬
‭elderly and a shrinking workforce mainly caused by the One-Child policy as well as‬
‭growing costs. This translates to a smaller consumer base and a potential strain on‬
‭social security services.‬
‭4.‬ ‭Global headwinds: China’s export oriented economy while strong and large is not‬
‭immune to global economic slowdown, but more resilient. Ongoing global tensions‬
‭as well as the possibility of a recession can hamper economic prosperity.‬
‭5.‬ ‭Policy Balancing Act: The Chinese government is walking a tightrope. They need to‬
‭stimulate growth without adding to the already high debt burden. Additionally, strict‬
‭COVID-19 lockdowns, while effective in controlling the virus, have disrupted supply‬
‭chains and consumer spending.‬

‭China's ability to navigate these challenges will determine the severity of the economic‬
‭slowdown. The government has tools at its disposal, such as infrastructure spending and‬
‭targeted stimulus packages. China is facing a period of economic transition. While a‬
‭full-blown crisis may not be inevitable, addressing these challenges will require careful‬
‭policy manoeuvring and a shift towards a more sustainable growth model.‬

‭18‬
‭Impact of the crisis:‬

‭●‬ ‭Loss of jobs and incomes: Slower growth translates to lower demand for goods and‬
‭services. This can lead to factory closures, company downsizing, and ultimately,‬
‭unemployment. Reduced employment means lower incomes for households,‬
‭impacting their purchasing power and potentially leading to a vicious cycle of‬
‭declining demand.‬
‭●‬ ‭Reduced consumer spending: Economic uncertainty often leads to increased‬
‭frugality. Consumers may postpone purchases of big-ticket items like cars and‬
‭homes, further dampening economic activity.‬
‭●‬ ‭Investment: Businesses become hesitant to invest in new projects during an‬
‭economic slowdown. This can lead to stalled infrastructure development, reduced‬
‭innovation, and ultimately, lower long-term growth potential.‬
‭●‬ ‭Social stability: Widening income inequality and rising unemployment can‬
‭exacerbate social tensions. If a large portion of the population feels left behind by‬
‭the economic slowdown, it could lead to social unrest.‬
‭●‬ ‭Property Market Woes: A struggling housing market impacts not just developers and‬
‭construction workers. Homeowners facing declining property values might struggle‬
‭to meet their mortgages, and banks could face bad loans. This can have a domino‬
‭effect on the financial system.‬
‭●‬ ‭Strained Social Security: China's ageing population relies heavily on social security‬
‭programs. A shrinking workforce coupled with a growing number of retirees could‬
‭put a strain on these systems, potentially leading to benefit cuts or increased taxes.‬
‭●‬ ‭Environmental Issues: China has been grappling with pollution for years. An‬
‭economic slowdown could lead to reduced investment in clean energy technologies,‬
‭potentially setting back environmental progress.‬

‭Steps taken or could be taken to alleviate the situation:‬

‭1.‬ ‭Tax cuts for middle and lower incomes: this will increase their purchasing power and‬
‭increase disposable income‬

‭19‬
 ‭2.‬ ‭Debt restructuring: The government could work with banks and companies to‬
‭restructure debt, making repayments more manageable and freeing up resources‬
‭for investment.‬
‭3.‬ ‭Easing Credit Restrictions: The government could loosen lending restrictions for‬
‭first-time homebuyers, potentially boosting demand in the property market.‬
‭However, this needs careful consideration to avoid fueling another bubble.‬
‭4.‬ ‭Social Safety Net Strengthening: Expanding social security programs could give‬
‭consumers more confidence and encourage spending.‬
‭5.‬ ‭Reskilling and Upskilling Initiatives: Investing in programs that equip workers with‬
‭new skills can help them adapt to changing job markets and prepare for future‬
‭economic opportunities.‬
‭6.‬ ‭Unemployment Benefits: Implementing or expanding unemployment benefits can‬
‭provide a safety net for laid-off workers and help them weather the economic‬
‭slowdown.‬
‭7.‬ ‭Infrastructure Investment: Investing in infrastructure projects can create jobs in the‬
‭short term and stimulate long-term economic growth.‬
‭8.‬ ‭Stimulating Innovation: Encouraging research and development can lead to new‬
‭industries and products, fostering future economic dynamism.‬

‭Who is helping China?‬

‭1.‬ ‭China Itself: The primary responsibility for navigating the slowdown lies with the‬
‭Chinese government. They're implementing various measures like targeted‬
‭stimulus, infrastructure spending, and potential reforms (mentioned previously).‬
‭2.‬ ‭International Financial Institutions: Organizations like the International Monetary‬
‭Fund (IMF) can offer advice and recommendations on economic policy. While not‬
‭direct financial aid, their expertise can be valuable.‬
‭3.‬ ‭Trading Partners: A healthy global economy benefits China, a major exporter. So,‬
‭stable economies in the US, Europe, and other trading partners can indirectly help‬
‭by creating demand for Chinese goods. However, current trade tensions might‬
‭hinder this.‬

‭20‬
 ‭4.‬ ‭Private Investors: Foreign investment in China can provide a source of capital and‬
‭expertise. However, investor confidence in the Chinese market has been shaky due‬
‭to the economic slowdown and ongoing policy uncertainties.‬

‭The responsibility for China's economic recovery lies primarily with its own government‬
‭and its ability to implement effective policies. While the international community can play a‬
‭role through advice and maintaining a stable global economy, it's not a straightforward‬
‭case of external actors "helping" China.‬

‭Conclusion:‬

‭China's economic growth has slowed, sparking concerns about a full-blown crisis. While‬
‭serious challenges exist, a period of slower but manageable growth seems more likely.‬
‭Debt, a real estate slump, demographics, and global headwinds all contribute to the‬
‭slowdown.‬

‭The government is taking steps like targeted stimulus and infrastructure spending, but‬
‭navigating this complex situation requires careful policy maneuvering. Success hinges on‬
‭transitioning towards a more sustainable growth model that addresses issues like income‬
‭inequality and environmental concerns.‬

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‭India‬
‭India's economy is a dynamic giant, boasting a rich mix of agriculture, services, and‬
‭manufacturing. Once primarily rural and agricultural, India has seen a remarkable‬
‭transformation in recent decades. The powerful services sector, particularly IT and‬
‭technology, is now a key driver of growth. However, challenges remain, including‬
‭widespread poverty and a growing population. Despite its complexities, India's economic‬
‭story is one of immense potential and a fascinating example of development in the 21st‬
‭century.‬

‭How can India help Sri Lanka's economy:‬

‭India can be a key player in Sri Lanka's economic recovery through several avenues:‬

‭●‬ ‭Investment:‬‭Indian businesses investing in Sri Lanka's‬‭infrastructure, tourism, and‬

‭manufacturing sectors can create jobs and boost Sri Lankan growth.‬
‭●‬ ‭Trade Facilitation:‬‭Smoother trade channels through‬‭measures like currency swaps‬
‭and relaxed import restrictions can increase trade volumes, benefiting both‬
‭economies.‬
‭●‬ ‭Tourism Boost:‬‭Encouraging Indian tourists to visit‬‭Sri Lanka can provide a‬
‭much-needed injection of foreign currency and support the tourism industry.‬
‭●‬ ‭Energy Assistance:‬‭India's relatively cheaper electricity grid can be interconnected‬
‭with Sri Lanka's, offering a more stable and affordable power source.‬
‭●‬ ‭Financial Support:‬‭Continued financial aid and lines of credit‬

‭How can India help Pakistan's economy:‬

‭Revitalizing trade relations could be a powerful tool for India to help Pakistan's economy.‬
‭Here's how:‬

‭●‬ ‭Mutual Benefit:‬‭Normalized trade can significantly‬‭boost Pakistan's exports,‬

‭potentially by 80%, easing their foreign exchange crisis. India could benefit from‬
‭access to cheaper Pakistani goods like textiles and agricultural products.‬

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 ‭●‬ ‭Reduced Reliance on China:‬‭Trade with India can lessen Pakistan's dependence on‬
‭China, potentially giving them more bargaining power in economic dealings. This‬
‭could benefit India strategically as well.‬
‭●‬ ‭Stimulating Business:‬‭Indian private sector investment,‬‭particularly in energy and‬
‭infrastructure, could create jobs and boost economic activity in Pakistan.‬
‭●‬ ‭Unlocking Potential:‬‭Reviving trade creates a win-win‬‭situation, fostering economic‬
‭stability and potentially paving the way for broader cooperation between the two‬
‭nations.‬

‭While challenges exist, normalizing trade offers a significant opportunity for India to play a‬
‭positive role in Pakistan's economic recovery.‬

‭How can India help China’s economy:‬

‭Helping China's vast economy directly might be less straightforward. Here's how India can‬
‭still play a role:‬

‭●‬ ‭Increased Trade:‬‭As India's own economy grows, its‬‭demand for Chinese imports‬
‭could rise, benefiting Chinese exporters. Additionally, India can become a‬
‭destination for high-quality Chinese goods seeking new markets.‬
‭●‬ ‭Investment Opportunities:‬‭A stable and growing Indian‬‭economy could attract‬
‭Chinese investments in areas like infrastructure and technology. This two-way flow‬
‭of capital can benefit both nations.‬
‭●‬ ‭Regional Stability:‬‭A strong and prosperous India contributes to a stable Asian‬
‭economic landscape, which indirectly benefits China's export-driven economy.‬
‭●‬ ‭Knowledge Sharing:‬‭Collaboration in areas like IT‬‭and green technology can lead to‬
‭mutual learning and innovation, boosting both economies in the long run.‬

‭While India can't directly address China's internal issues, fostering a healthy economic‬
‭relationship creates a win-win situation for both Asian giants.‬

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‭Conclusion:‬

‭The economies of Sri Lanka, Pakistan, and China, though vastly different in size and‬
‭structure, are all facing significant challenges. Sri Lanka grapples with a debt crisis, Pakistan‬
‭struggles with high external debt and political instability, while China experiences a‬
‭slowdown with concerns about its long-term growth model.‬

‭Despite their individual difficulties, these Asian nations are not isolated entities. They are‬
‭interconnected through trade, investment, and regional stability. Here's how India, a rising‬
‭economic power, can play a role in supporting each:‬

‭●‬ ‭Sri Lanka:‬‭India can act as a crucial partner by investing‬‭in Sri Lanka's‬
‭infrastructure, tourism, and manufacturing sectors. Additionally, facilitating trade,‬
‭providing energy assistance, and offering financial support can bolster Sri Lanka's‬
‭recovery.‬
‭●‬ ‭Pakistan:‬‭Normalising trade relations offers immense potential. Increased trade‬
‭volumes benefit both nations, while reduced reliance on China for Pakistan‬
‭strengthens India's strategic position. Furthermore, Indian private sector investment‬
‭in Pakistan's energy and infrastructure can create jobs and stimulate economic‬
‭activity.‬
‭●‬ ‭China:‬‭While directly influencing China's vast economy might be difficult, India's‬
‭own economic growth presents opportunities. As India's demand for imports rises,‬
‭China's exporters can benefit. Additionally, a stable and growing India can attract‬
‭Chinese investments, fostering a two-way flow of capital. Collaboration in areas like‬
‭technology can lead to mutual innovation that benefits both economies.‬

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‭Bibliography‬

‭Byjus‬

‭Wikipedia‬

‭Britannica‬

‭Studdocu‬

‭Wallstreet mojo‬

‭Economic times‬

‭Wall street exchange‬

‭Infographics‬

‭BRICS‬

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