'Even Bangladesh has now collapsed': Entrepreneur links China to 5 South Asian meltdowns

China’s growing influence across South Asia via strategic investments, high-interest loans, and large-scale infrastructure projects has left many nations financially overstretched and politically vulnerable. 

From debt distress to institutional breakdown, multiple countries are showing signs of serious strain.

“Even Bangladesh has now collapsed into anarchy and in a downward spiral,” posted serial entrepreneur Rajesh Sawhney on X. “5 out of 8 economies in South Asia have collapsed: Sri Lanka, Maldives, Pakistan, Afghanistan, Nepal.”

While data doesn’t fully support this sweeping claim but the underlying stress signals are real.

Bangladesh
The country is gripped by lawlessness, violent protests, and rising radicalization. The interim government is unable to assert control, and the army has warned of a “self-manufactured crisis.” Inflation is high, investment has weakened, and growth has slipped to 3.3–3.9% for FY25. The economy remains functional but barely.

Sri Lanka
Despite modest growth projections, Sri Lanka continues to battle high poverty, inflation, and a battered currency. It defaulted on its external debt in 2022 and still owes over half its foreign debt to China. Key projects have yielded limited returns, and debt servicing remains a major risk.

Maldives
While GDP growth is expected at 6.4%, nearly 20% of Maldives’ public debt is owed to China. The country’s economy is heavily reliant on tourism, and any external shock could tip the balance. The Maldives-China FTA could also worsen the trade deficit and hurt local industries.

Pakistan
Pakistan remains politically unstable, with rising unemployment and a fragile fiscal base. Chinese loans via CPEC have boosted infrastructure, but also ballooned debt and raised sovereignty concerns. Investor confidence remains shaky.

Afghanistan & Nepal
Afghanistan’s economy is isolated, dependent on aid, and plagued by poverty. Chinese engagement is limited and slow. Nepal, though stable on paper, is facing a growing trade deficit with China and rising dependency on Beijing-backed infrastructure.