The Himalayan nation of Nepal and the Indian Ocean Island nation of Sri Lanka have a progressive multi-pronged agenda which facilitates member SAARC and BIMSTEC states to better target their collaboration with other regional economies.
The Himalayan nation of Nepal and the Indian Ocean Island state of Sri Lanka are becoming important and visible players in international politics. Due to the change in the order in the global power shift, South Asian countries such as Nepal and Sri Lanka have to balance their foreign policy, based on the interdependencies with their neighboring nations. Both Nepal and Sri Lanka are currently facing very challenging times. The survival and proliferation of South Asian small states is primarily determined by the characteristics and dynamics created by their systems. The foreign policies of South Asian nations such as Nepal and Sri Lanka are likely to be defined by the pursuit of their national interests. In this regard, greater interdependencies between large and small nations within and outside regional blocs will offer the momentum for policy reforms. Like the global and regional powers, small states such as Nepal and Sri Lanka, too, have the same hopes, aspirations and natural rights. The domestic political settings of Nepal and Sri Lanka exert a critical role in their external linkages. Alongside maintaining stability and sovereignty, the challenge for smaller nations is their vulnerability to external pressures.
The Covid-19 pandemic and the financial crisis had a strong impact on both these nations. Due to the increasing frequency of international dialogue, these two South Asian nations can enable national-scale design frameworks identifying policy portfolios to achieve efficient mixes of economic growth. In the context of regional cooperation, both these nations need to diversify the regional economy by developing the export-oriented agricultural and industrial tourism sectors. Improving sustainability in both these South Asian nations requires balanced national economic policies. The external trade policies of these two South Asian nations are expected to concentrate on new export prospects by identifying potential products and services in neighboring regional blocs. Clearly, these island nations opt for bilateral and regional trade agreements that have taken a neoliberal turn.
The rising energy prices combined with the massive hike in food prices have worsened inflation. In the post-Covid and economic crisis context, the action plans of State-led welfare and social protection systems of Nepal and Sri Lanka must aim to strike a balance for sustainable development. Nepal and Sri Lanka must endure using all available policy apparatuses and adaptable policy resolutions to maintain macroeconomic stability. These factors highlight the significant room available for future growth and expansion through economic diplomacy.
Regional integration: SAARC and BIMSTEC
There is a solid link between the authority of regional integration organizations such as SAARC and BIMSTEC. In 1987, the currently eight member SAARC Secretariat was set up in Kathmandu. The Bay of Bengal sub regional Initiative has developed to be the “preferred platform” for regional cooperation in South Asia. Both Nepal and Sri Lanka are the founding members of the SAARC and are also members of the BIMSTEC (The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation).
Tourism in Nepal and Sri Lanka
The tourism sector for Nepal and Sri Lanka is a key driver of economic growth, enterprise development and employment creation. The growth and achievements of the tourism sector in Nepal are outstanding .The Himalayan nation is a very pleasant place to stay in and travel around and is a favorite among trekkers and mountaineers. Economic recovery from the pandemic has gained traction over the course of 2022 for Nepal. The expansion of tourism in Nepal continues to achieve spectacular gains in recent years. The tourism sector in the country, which had an astounding success story in the year 2022 is entering a new track with fresh dimensions. According to Nepal Tourism Board (NTB), 614,148 international tourists visited the country in the year 2022.
Tourism was one of the most-affected sectors of Sri Lanka by the pandemic and the recent economic crisis in Sri Lanka, tourism is a vital sector for economic revival. Sri Lanka has received 628,017 tourists till November and has generated revenue of US$ 1,129.4 million in the eleven months from January to November this year (Central Bank of Sri Lanka, 2022). Tourism can certainly help stimulate economic revival in Nepal and Sri Lanka.
New era in South Asian solidarity
The Himalayan nation of Nepal and the Indian Ocean Island nation of Sri Lanka have a progressive multi-pronged agenda which facilitates member SAARC and BIMSTEC states to better target their collaboration with other regional economies. Nepal and Sri Lanka as middle-income developing economies offer a great opportunity to represent South Asia and to emphasize not only on the benefits of economic support but also to create a channel of diplomacy.
