South Asia’s tipping point: Inequality, instability, and India’s leadership test

As volatility rises from Colombo to Kathmandu, Delhi’s next move could reshape the region

- BY MILINDA MORAGODA

The uprisings in Nepal and Indonesia, and earlier turbulences in Bangladesh and Sri Lanka, are not random flareups.

They are symptoms of a deeper global phenomenon reshaping societies. From the Arab Spring to today’s protests, politics is being recast by inequality, elite capture, and a restless younger generation.

The pandemic acted as both a trigger and a breeding ground for this turbulence. It widened the gap between rich and poor, eroded trust in governance, and sharpened frustration among youth who already felt excluded from opportunity. What we are now witnessing across South Asia and beyond is part of a global pattern of volatility, with structural roots that cannot be ignored.

The inequality trap

For eight decades, capitalism and open markets have generated extraordinary prosperity. Hundreds of millions across Asia were lifted out of poverty, and global integration spurred innovation and growth. Yet, capitalism today faces a legitimacy crisis.

The “top one per cent” phenomenon has become starker, not only in advanced economies but in the Global South. Wealth and influence are concentrated in the hands of a few, while the middle class feels squeezed and the poor remain vulnerable. Social media and digital technologies have amplified this inequality, exposing privilege and corruption in real time while fuelling polarisation. The result has been growing impatience among young populations, who are less willing to wait for incremental change.

South Asia reflects these trends vividly. Sri Lanka’s dramatic political and economic crisis in 2022 was not only about fiscal management but also about the collapse of trust between rulers and ruled. Bangladesh is wrestling with political polarisation; Nepal’s streets echo with popular dissatisfaction; Afghanistan and Pakistan remain mired in instability; and even smaller states such as the Maldives and Bhutan have faced their own disruptions.