Learning from Sri Lanka and Bangladesh – Nepal Economic Forum

On September 8, Kathmandu’s streets echoed with the voices of 1000’s of youths, protesting in opposition to a long time of systemic corruption. Whereas many seen this uproar as a sudden, one-off phenomenon, it was, the truth is, hardly an remoted occasion. Up to now three years, Sri Lanka and Bangladesh every have witnessed their very own sparks of mass revolution and political unrest in 2022 and 2024 respectively. Though these three nations have had their very own distinctive historical past, there’s a strikingly recurrent sample that connects them, particularly in context of the protests that emerged. Understanding key similarities and variations of the three upheavals whereas studying how our neighbors navigated the aftermath is pivotal, particularly at a time when Nepal stands at a essential juncture – one that’s sure to form its political and financial trajectory for years to return.

A Background of the Three Unrests

To grasp the core of those unrests, a short overview of the three crises and the context of every of the international locations is important. For Sri Lanka, it began again in April of 2019, when six suicide bombings by Islamic extremists hit Catholic church buildings and luxurious resorts within the nation’s capital space. Within the earlier 12 months, tourism was the third-largest export earner of the Sri Lankan financial system however within the two months that adopted, vacationer arrivals per day dropped to a mean of 1,700 in comparison with the 7,600 determine previous to the assault. This incident, on high of the COVID-19 lockdown imposed by the federal government throughout August, wounded an already hit tourism sector. Given this background, across the finish of the identical 12 months, President Gotabaya Rajapaksa launched deep tax cuts with essentially the most outstanding one being the Worth Added Tax (VAT) being decreased from 15% to eight%. The mix of those tax cuts, the pandemic’s impression on revenues, and the price of COVID-19 reduction measures widened fiscal deficits to 12.8% of GDP in 2020. In April of 2021, the President banned chemical fertilizers in a single day, aiming to make agriculture 100% natural which was a method to protect the overseas reserves by avoiding fertilizer imports throughout an financial disaster. However this transfer proved to be counter-productive for the financial system as general meals manufacturing dropped by greater than 40%, rice harvests dropped by 32%, tea manufacturing fell by 18%. This sparked widespread meals insecurity and financial losses, together with an estimated USD 25 million in misplaced tea exports alone. By the point the federal government defaulted on its debt in April 2022, overseas reserves had dropped to USD 1.9 billion, amounting to about one month of imports (3 months of imports are broadly thought-about acceptable for international locations with versatile change charges).  In 2022, Sri Lanka was the primary Indo-Pacific nation in a long time to default on its exterior debt. Debt-to-GDP was at a whopping 114%, far above advisable ranges for a lower-middle-income nation. Inflation ranges reached a file excessive of 73.7% in September that 12 months. Owing to the dearth of overseas reserves, the island confronted acute meals, drugs and gasoline scarcity which finally triggered the anti-government protests. This was generally known as the “Aragalaya” motion, derived from the Sinhala phrase for “wrestle”, and in the direction of the top of those protests, protestors ended up storming the President’s official residence in Colombo and the President resigned.

Within the case of Bangladesh, the financial system noticed stellar export-led progress pushed by its Readymade Garment Business (RMG), with the nation being the second largest exporter of clothes after China in 2024. In 2019, Bangladesh had a mean progress charge of 8%, which was effectively above the Asian common and within the 12 months 2022, the nation reported a progress of seven.2%, establishing it one of many quickest rising economies on the planet. Nonetheless, the wealth disparity widened since as of June 2024, 41% of Bangladesh’s complete revenue was within the arms of the wealthiest 10% of the inhabitants depicting an unlimited revenue inequality. On the political entrance, the Awami League celebration had been in energy since 2009 however they made unpopular selections like dismissing the caretaker authorities and even have been accused of mass vote riggings within the 2014, 2018 and 2024 elections. Whereas in energy, this celebration carried out arrests of their opposition leaders and the media was strictly regulated by way of draconian legal guidelines such because the Digital Safety Act, 2018, stifling folks’s freedom of expression. Then, in July 2024, the Excessive Courtroom reinstated the job quota system which assured one third of civil service posts to the youngsters of freedom fighters of the Bangladesh Liberation motion in 1971. Together with that, there have been suspicions that this quota benefitted teams that backed the ruling Awami League celebration and that they have been extremely misused. With unemployment charges hovering within the nation, the protestors requested for a merit-based quota system by way of the anti-quota protests, ranging from Dhaka however these peaceable protests escalated into violence as members of the Bangladesh Chatra League (BCL) (affiliated with the Awami League) attacked scholar protestors and within the days of the protest that adopted, police charged with batons, tear fuel and even open fireplace which left over 300 folks lifeless within the unrest. The then Prime Minister, Sheikh Hasina additionally closed faculties and universities, imposed a curfew, lower off web entry in elements of Bangladesh, and referred to as these protesting in opposition to her as ‘terrorists’. Whereas this controversial quota system was lower sharply on July 21, protests continued as folks demanded justice for these killed within the clashes and referred to as for the resignation of Hasina. In August, the protests in opposition to the federal government continued and after 1000’s of protestors stormed the Prime Minister’s residence, Hasina in the end resigned and fled to India.  The Bangladeshi authorities closed faculties and universities, imposed a curfew, and even lower off web and telecommunication companies following the protests. With unemployment charges hovering, the protestors requested for a merit-based quota system and this motion, together with the violent crackdown on the protestors and different pent up public grievances developed right into a nationwide demand for the resignation of Hasina’s authorities.

Nepal, alternatively, has seen a long time of amassed structural weaknesses. Remittances contributed to 23.5% of the nation’s progress within the final fiscal 12 months driving the excess Stability of Funds (BoP) determine. The nation suffers from a weak productive sector with imports exceeding exports by virtually 6.6 instances prior to now 12 months. The nation lacks a positive surroundings for companies as a result of poor implementation of presidency coverage, bureaucratic burden, and continued political instability.  Nepal’s general rank in ‘Doing Enterprise’ in 2020 was 94^th out of 190 economies as per World Financial institution which has hindered the productive sector progress. Owing to the dearth of alternatives within the nation, final fiscal 12 months 856,422 left the nation looking for overseas employment overseas. On high of those financial points, the nation has seen fragile political stability. From 2008 until the current, no administration accomplished a full time period as 14 governments have been shaped beneath eight completely different Prime Ministers. After the brand new structure was promulgated in 2015, the Prime Minister’s submit in Nepal rotated between the trio of KP Sharma Oli, Pushpa Kamal Dahal, and Sher Bahadur Deuba, all of whom confronted allegations of corruption and nepotism. Within the month of September in 2025, a viral pattern on social media with the hashtags of ‘NepoBaby’ and ‘NepoKids’ attracted widespread consideration on the acute quantity of wealth that the Nepali politicians had amassed by way of years of corruption benefiting their offsprings whereas the vast majority of the general public suffered economically. This pattern was impressed by the identical viral developments in Indonesia and Philippines. General, the general public belief in leaders and political establishments has eroded, primarily among the many youthful part of the Nepali society. The folks’s frustrations reached a boiling level when the federal government responded by suspending 26 social media platforms together with Fb, Instagram, YouTube,  X and others citing non compliance with the brand new registration guidelines beneath the Social Media Administration Directive 2080 (2023 A.D.). The end result of those occasions then led to younger college students and protestors started protesting at Maitighar Mandala, a serious roundabout within the valley on September 8, 2025. Because the peaceable demonstrations moved towards the Federal Parliament constructing within the capital, the police enforced crowd management measures like tear fuel and water cannons which escalated to rubber bullets, and reside ammunition, killing not less than 19 folks and injuring a whole lot of youths. The subsequent day, the then Prime Minister KP Oli resigned and the military was deployed to revive order. Three days later, after being nominated on a Discord dialogue organized by ‘Hami Nepal’, former Chief Justice Sushila Karki was appointed because the Interim Prime Minister of the nation, changing into the primary feminine govt head and the Home of Representatives was dissolved by the President.

Divergent Roots

Whereas the uproar in Sri Lanka and Bangladesh emerged out of comparable grievances of the protestors, the underlying financial intricacies differ. Understanding these core variations is important for Nepal to keep away from making the identical errors as its disaster ridden neighboring international locations.

Sri Lanka’s disaster stemmed principally from the sequence of fallacious selections made regarding the financial system as a result of lack of far sighted coverage making similar to the massive tax cuts and the in a single day ban on chemical fertilizers that hit the agriculture sectors. These selections led the nation into being unable to pay its money owed or import important items as a result of lack of overseas reserves, inflicting a complete financial breakdown. Bangladesh, quite the opposite, has a comparatively booming financial system and the problems have been primarily political with an authoritarian authorities, shrinking freedom of expression, lack of democratic area and truthful practices. Whereas the financial system was steady, the folks’s belief within the system was severely shattered. In distinction to Sri Lanka, Nepal’s problem was not associated to mounting money owed, nevertheless it was primarily the rising unemployment and lack of a productive financial system that was amplified by the nation’s weak governance practices and systemic problems with corruption.

The Commonalities

Any protest, particularly in at the moment’s interconnected world, doesn’t exist in a silo. The waves of protests seen in South Asia prior to now couple of years have been fueled by the frustrations of the folks, shared throughout borders. A defining characteristic of the upheavals in all three nations has been the demographic of those elevating their voices. In Sri Lanka, the motion was pushed by college students and younger professionals urgent for a change within the island nation’s political system. Equally, in Bangladesh, college students and younger staff have been on the forefront of the anti-quota motion, calling for justice and political reforms. In Nepal, the Gen-Z youths led the protests combating in opposition to corruption and nepotism. In all these actions, this digitally savvy, aspirational, younger era spoke out after witnessing a widening hole between their expectations and actuality. This represents an enormous “youth bulge” within the area which, sadly, is failing to translate right into a demographic dividend as a result of lack of employment. That is stark since within the 12 months previous the unrest the youth unemployment charge have been 25.4% in 2021, 15.7% in 2023, and 20.5% in 2024 for Sri Lanka, Bangladesh and Nepal respectively.

Moreover the youth element, a standard issue between protests in all three international locations was the function of social media and the Web within the group of the actions. The Sri Lankan “Aragalaya” motion organically began with protestors being mobilized by way of social media regardless of there being no particular chief. Social media helped increase voices in opposition to injustices, share information and occasions as they unfolded, collect assist and set up protests. Likewise, the Bangladeshi protestors additionally leveraged social media for activism within the 2024 protests to arrange resistance campaigns, form public opinion, share their story with the worldwide group and maintain public engagement past the bodily protest by way of platforms like Fb, WhatsApp, and Instagram. In the identical method, the September protests in Nepal began by way of the viral marketing campaign shedding a lightweight on nepotism, protestors have been mobilized by way of the assistance of social media platforms like Discord and Tiktok, and even the interim Prime Minister was chosen by way of a Discord channel. These cases within the area underscored the importance of digital expression in politics. Tightening of management over the digital area just like the banning of web companies which started on July 17, 2024  in Bangladesh and the social media ban in Nepal imposed from September 4, 2025, solely fueled the frustrations of the folks in these international locations and snowballed into the protests which ended up toppling each the nations’ governments.

General, the same theme appears to be persistent in these crises which is the preliminary dismissal of residents’ considerations by the management. In every of the circumstances, leaders dismissed the protestors’ considerations as a substitute of truly addressing the core points. This governance hole turned peaceable frustration into widespread anger and violence.

The Aftermath

Whereas the responses to all three crises have been completely different from their causes, all of them have left a profound impression on the residents. In Sri Lanka, the President fled the nation and resigned whereas the brand new authorities obtained a bailout of USD 2.9 billion from IMF and consequently applied harsh austerity measures beneath the IMF Prolonged Credit score Facility (ECF) program that pushed many into poverty with the poverty charge taking pictures up by 13.2% in 2024 (reaching 24.5%) from 2019 as authorities spending was lower, subsidies on electrical energy and gasoline have been eliminated and taxes have been elevated.

In Bangladesh, the previous Prime Minister Sheikh Hasina was compelled to resign and fled to India and an interim authorities was shaped beneath Mohammad Yunus. Nonetheless, the nation has been working beneath intense scrutiny with the brand new authorities making controversial selections together with the discharge of leaders who have been imprisoned for corruption. On November 17, 2025, Hasina was discovered responsible of crimes in opposition to humanity by the Worldwide Crimes Tribunal of Bangladesh and because of this, was handed a dying sentence over the brutal crackdown by her safety forces on the coed protestors.

As for Nepal, a complete of 76 lives have been misplaced throughout the protests, the nation suffered huge infrastructure lack of roughly USD 580 million, and the World Financial institution revised the predictions for Nepal’s progress within the fiscal 12 months 2026 to 2.1%, down from 5.4% earlier than the September protests. Regardless of this, whereas an interim authorities was shaped with Gen-Zs selecting their interim Prime Minister Sushila Karki by way of Discord and the March 5, 2026 elections are underway, there may be nonetheless no signal of a complete, credible restoration plan for the financial system, leaving the nation in a weak and unsure state.

Desk 1. Abstract of the Protests in Sri Lanka, Bangladesh, and Nepal

The Street Forward

Nepal is at a essential level in historical past and its path ahead should be dictated by the laborious realized classes learnt from the financial collapse of Sri Lanka and the political brittleness of Bangladesh. An important lesson from Sri Lanka is the heavy price of delayed motion. The Rajapaksa authorities ignored the repeated warnings in regards to the collapsing overseas reserves and refused to enter negotiations with IMF for monetary rescue or debt restructuring earlier than it was too late. Nepal should notice the significance of early motion and formulating rapid, credible financial restoration plans with sturdy and competent experience backing these methods. Future nation leaders should be questioned about their plans for the nation by the folks in distinction to Sri Lanka’s case the place nor the President offered a thought out plan of the nation might maintain the tax cuts nor the residents requested him about it. Ready for a full-blown disaster will not be an choice in a nation already hit by the current unrest.

Alternatively, from Bangladesh’s unrest, Nepal should notice that financial stability is meaningless with out political legitimacy. If the folks of the nation itself don’t feed heard or represented or pretty handled, then a rising financial system is a not sufficient. Suppressing dissent of the general public solely results in larger issues as seen in Hasina’s violent response in the direction of the opposition and protestors which ended up escalating the motion and introduced an finish to her authorities. Partaking in real public dialogue and defending democratic area are pre-requisites for the rebuilding of public belief.

General, these crises within the South Asian area present the importance of prioritizing accountability in governance and fixing the basics of a nation and its financial system. The September protests have been a ultimate warning bell for Nepal to be taught from the destiny of its South Asian neighbors. The lesson is crystal clear: the price of inaction and governance failure will be catastrophic whereas proactive, accountable management is the one mild that may information a nation by way of darkish and difficult instances. Nepal now faces a monumental option to both be taught from these brutal regional classes or put together to repeat essentially the most painful chapters in historical past. The price of failure is a value the nation can now not afford to pay.