2017 Fourth-Quarter Forecast

South Asia

Everything that informs geopolitics can be found in South Asia: challenging demographics, geographic diversity, and contentious, ill-defined borders. The Himalayan Mountains form the northern border of South Asia, whose two main rivers, the Indus and the Ganges, support the region’s great population centers. India is the region’s dominant country, home to the world’s fastest growing economy. But its rivalry with neighboring Pakistan, a fellow nuclear power and growing consumer market, has made South Asia one of the world’s most dangerous nuclear flashpoints. The region is also a testament to how militancy and militarism can undermine the regional integration needed to unleash higher economic growth.

Sep 28, 2017 | 13:57 GMT
Everything that informs geopolitics can be found in South Asia: challenging demographics, geographic diversity, and contentious, ill-defined borders.

Everything that informs geopolitics can be found in South Asia: challenging demographics, geographic diversity, and contentious, ill-defined borders.

(CoolR/Shutterstock.com)
section Highlights
  • India's ruling Bharatiya Janata Party will focus on working out the kinks of tax reform implementation during the quarter, bumping land and labor reforms off this year's legislative agenda.
  • Weak credit growth and tepid private investment will contribute to the continuing economic slowdown in India and put pressure on the government to respond with stimulus measures.
  • India will keep building up infrastructure and military assets along its contested border with China to improve its response capabilities, while cautiously expanding its security cooperation with Japan and the United States to counter Beijing's assertiveness.
  • Despite pressure from the United States to change its behavior, Pakistan will stick to its current strategy in Afghanistan as 3,000 U.S. troops arrive, dimming the prospects for negotiations with the Taliban to end the war.
  • India and Pakistan alike will work to contain Zakir Musa's new al Qaeda branch in Kashmir, which threatens both countries with transnational jihadism.
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