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South Asia’s economic landscape: Hope and hurdles on path to prosperity
Not all countries in the region are growing fast, and three—Afghanistan, Pakistan and Sri Lanka—are in acute crisis
South Asia has emerged as a beacon of hope in the global economy, with the World Bank predicting that the region will outshine other developing regions in the years to come. However, a deeper dive into the situation reveals a complex reality marked by both progress and challenges, says the World Bank its latest ‘South Asia Development Update, Toward Faster, Cleaner Growth.’
The report said that while certain countries in South Asia are basking in robust economic growth, and others are recovering from turbulent times, the region as a whole is advancing at a more restrained pace compared to the pre-pandemic era. This warrants concern as South Asia still has substantial ground to cover in terms of economic development. With per capita incomes averaging around US$2,000, the region falls significantly short, standing at only one-fifth of the level achieved by neighboring East Asia and Pacific countries or the upper-middle-income average, and a mere one-twentieth of the income level of high-income countries.
Though South Asia’s current growth rates may surpass those of numerous other regions, they remain insufficient for the region’s countries to attain high-income status within a single generation. Moreover, not all nations within South Asia are experiencing rapid growth; Afghanistan, Pakistan, and Sri Lanka find themselves mired in acute crises.
To draw a parallel, South Asia’s progress is akin to mountaineers navigating the foothills of the Himalayas. Some have scarcely departed from base camp, while others are advancing briskly but remain at a lower altitude. Regardless of their current position, every country in the region has a long journey ahead, and the path ahead is poised to become even more formidable.
The “South Asia Development Update: Toward Faster, Cleaner Growth,” released last week provides policymakers with a roadmap to expedite their journey. This report underscores four pivotal components for success:
1. Boosting Private Investment: Robust private investment stands as a cornerstone for catching up with high-income countries and facilitating the transition to cleaner energy sources. Unfortunately, private investment growth in all South Asian countries, except one, has decelerated compared to the pre-pandemic period. To reignite private investment, policymakers must prioritize infrastructure development, enhance the business environment, ensure access to credit through a robust financial system, and eliminate market distortions.
2. Restoring Fiscal Sustainability: Many nations in South Asia carry a substantial debt burden, a roadblock to economic prosperity. Over the past decade, South Asia has experienced an above-average increase in public debt. High public debt stifles private investment, constrains spending on essential infrastructure and human capital, and reduces resilience. Tackling this challenge necessitates a combination of revenue augmentation, increased spending efficiency, and the implementation of robust fiscal regulations.
3. Speeding the Energy Transition: South Asia has made strides in adopting basic energy-saving technologies but lags in embracing advanced ones. Modernizing the economy and improving energy efficiency will enable the region to keep pace with the global energy transition.
4. Maintaining a Healthy Labor Market: The energy transition heralds new employment prospects but also poses the risk of leaving lower-skilled, informal workers with pollution-intensive jobs behind. Access to education, training, finance, and markets can aid workers in transitioning to new sectors. A strong labor market, fortified with effective social safety nets, eases the path for displaced workers.
The road to prosperity demands sustained high growth rates over extended periods. Many nations have seen their aspirations dashed as growth faltered following an initial surge. However, with the right policies and investments, South Asia can surmount these challenges and reach the summit, securing sustainable livelihoods for its people on a habitable planet. Achieving this goal will necessitate concerted efforts from policymakers and stakeholders across the region.
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Landslide RED warnings continue to be in force for the Districts of Kandy, Kegalle, Kurunegala, Matale and Nuwara Eliya
The RED Landslide Early Warnings issued by the Landslide Early Warning Center of the National Building Research Organization [NBRO] to the Districts of Kandy, Kegalle, Kurunegala, Matale and Nuwara Eliya have been extended until 1600hrs today [06th December 2025]. Landslide Early warnings have also been issued to the districts of Badulla, Colombo, Galle, Gampaha, Kalutara, Matara, Monaragala and Ratnapura,
Accordingly,
LEVEL III RED warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Gangawata Korale, Deltota, Doluwa, Thumpane, Medadumbara, Minipe, Pathahewaheta, Yatinuwara, Ganga Ihala Korale, Akurana, Udunuwara, Panvila, Pathadumbara, Kundasale, Pasbage Korale, Hatharaliyadda, Ududumbara, Poojapitiya, Harispattuwa and Udapalatha in the Kandy district, Galigamuwa, Kegalle, Mawanella, Rambukkana, Dehiowita, Warakapola, Deraniyagala, Bulathkohupitiya, Ruwanwella, Yatiyanthota and Aranayaka in the Kegalle district, Narammala, Mawathagama, Mallawapitiya, Alawwa, Rideegama and Polgahawela in the Kurunegala district, Rattota, Wilgamuwa, Ukuwela, Pallepola, Matale, Laggala Pallegama, Yatawatta, Naula and Ambanganga Korale in the Matale district, and Nildandahinna, Walapane, Hanguranketha and Mathurata in the Nuwara Eliya district.
LEVEL II AMBER warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Uva Paranagama, Kandeketiya, Bandarawela, Soranathota, Hali_Ela, Meegahakivula, Badulla, Ella, Haputhale, Lunugala, Welimada, Passara and Haldummulla in the Badulla district, Nuwara Eliya, Ambagamuwa Korale, Thalawakele, Norwood, Kothmale West and Kothmale East in the Nuwara Eliya district, and Kahawaththa, Godakawela and Kolonna in the Ratnapura district.
LEVEL I YELLOW warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Padukka and Seethawaka in the Colombo district, Elpitiya and Yakkalamulla in the Galle district, Mirigama, Attanagalla and Divulapitiya in the Gampaha district, Bulathsinhala, Ingiriya and Horana in the Kalutara district, Athuraliya and Pasgoda in the Matara district, Bibile and Medagama in the Monaragala district, and Kiriella, Nivithigala, Eheliyagoda, Kuruwita, Kalawana, Pelmadulla, Elapatha, Balangoda, Openayake, Imbulpe, Ayagama, Ratnapura and Kaltota in the Ratnapura district.
The International Monetary Fund (IMF), on Thursday, signalled strong solidarity with Sri Lanka in the wake of Cyclone Ditwah, confirming that it is actively exploring options to provide further support for recovery and resilience beyond the existing Extended Fund Facility (EFF).
Julie Kozack, Director of the IMF’s Communications Department, opened her remarks with heartfelt condolences:
“Our deepest sympathies go out to the people of Sri Lanka for the effects of the devastating cyclone. Our hearts mourn the loss of life that has taken place,” she said, extending condolences to other Asian nations also grappling with severe flooding, including Indonesia, Malaysia, Thailand, and Vietnam.
On Sri Lanka, Kozack emphasised that the IMF is closely engaging with authorities, development partners, and counterparts to assess the humanitarian, social, and economic toll of the disaster.
“Large parts of Sri Lanka have been affected by floods, and we expect economic activity to be adversely impacted, in addition to the significant human toll,” she noted.
The IMF is awaiting the completion of a rapid post-disaster damage assessment, led by Sri Lankan authorities, in collaboration with international partners, to better gauge the economic impact.
“We are continuing to support Sri Lanka’s recovery, reform, and resilience under the EFF arrangement. Our staff is looking into options to further support Sri Lanka in the recovery process,” Kozack confirmed.
She reiterated that the Board meeting, scheduled for 15 December, remains on track, following the staff-level agreement on the fifth review reached in October—prior to the cyclone.
“We will provide additional details as the assessment of economic needs and damages moves forward, and as we have more information to inform our thinking around the options,” she added.
Naina Thambi Marikkar Mohamed Thahir was sworn in as a Samagi Jana Balawegaya (SJB) National List Member of Parliament before Speaker Dr. Jagath Wickramaratne yesterday (05).
His appointment follows the resignation of SJB Parliamentarian Muhammathu Ismail Muththu Mohamed, who stepped down from his position on 28 November.
The SJB subsequently nominated Thahir to fill the resulting vacancy.
Accordingly, the Election Commission issued a Gazette Extraordinary declaring Naina Thambi Marikkar Mohamed Thahir a Member of Parliament, in terms of Section 64(5) of the Parliamentary Elections Act, No. 1 of 1981, as amended by Section 6 of the Elections (Special Provisions) Act, No. 35 of 1988.
With the issuance of the gazette, and the subsequent swearing-in, Thahir has officially assumed duties as a National List MP, representing the SJB.
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