January 2026 Edition: The Adjustment Year

Volume 2, Issue 1 · January 2026

Mauritius and the Economics of the Sea

Island nations navigate the collision between maritime wealth, climate vulnerability and financial fragility. From ocean territories and port economics to currency pressures and tourism dependency. The Meridian maps how small states manage outsized exposure to global systems. Plus: India's GDP mirage, Bangladesh after the uprising, and Iran's collapsing rial.

Top stories

Mauritius GDP growth projected at 3.0% in 2025 (IMF), down from 4.7% in 2024. Public debt reaches 87% of GDP. Tourism earnings exceed $2 billion but climate erosion threatens 37km of coastline. | India records 8.2% GDP growth in Q2 FY2025-26, with unemployment falling to 4.7% in November 2025. Yet formal job creation lags headline numbers, with 12 million youth entering workforce annually. | Bangladesh garment exports earn $36 billion in 2024 despite political upheaval. 113 factories closed, 96,000 jobs lost. GDP growth slumps to 3.97% in FY2024-25, lowest in decades. | Iranian rial collapses to 1.42 million per US dollar (December 2025). Inflation hits 52.6% point-to-point, food prices up 72%. Tehran bazaar protests spread nationwide as currency loses purchasing power. | Indian Ocean small states navigate fiscal fragility. Mauritius public debt 87% of GDP, current account deficit 6.5%. Climate vulnerability meets structural dependency on tourism and offshore finance. | LDC graduation threat looms for Bangladesh in 2026. Loss of EU preferential access, US tariffs adjusted to 20%, heightened competition as buyers diversify sourcing to Cambodia, Vietnam, Indonesia. | Mauritius GDP growth projected at 3.0% in 2025 (IMF), down from 4.7% in 2024. Public debt reaches 87% of GDP. Tourism earnings exceed $2 billion but climate erosion threatens 37km of coastline. | India records 8.2% GDP growth in Q2 FY2025-26, with unemployment falling to 4.7% in November 2025. Yet formal job creation lags headline numbers, with 12 million youth entering workforce annually. | Bangladesh garment exports earn $36 billion in 2024 despite political upheaval. 113 factories closed, 96,000 jobs lost. GDP growth slumps to 3.97% in FY2024-25, lowest in decades. | Iranian rial collapses to 1.42 million per US dollar (December 2025). Inflation hits 52.6% point-to-point, food prices up 72%. Tehran bazaar protests spread nationwide as currency loses purchasing power. | Indian Ocean small states navigate fiscal fragility. Mauritius public debt 87% of GDP, current account deficit 6.5%. Climate vulnerability meets structural dependency on tourism and offshore finance. | LDC graduation threat looms for Bangladesh in 2026. Loss of EU preferential access, US tariffs adjusted to 20%, heightened competition as buyers diversify sourcing to Cambodia, Vietnam, Indonesia.

Markets at a glance — THE MERIDIAN Data Desk

Ibovespa

164,215

+0.8%

MOEX

2,198

-1.1%

Sensex

85,647

+0.4%

SSE Comp

3,912

+0.6%

JSE All-Share

113,142

+0.2%

SEMDEX (Mauritius)

2,089

-0.3%

USD/BRL 5.89

USD/RUB 81.2

USD/INR 91.3

USD/CNY 7.08

USD/ZAR 17.2

USD/MUR 46.5

USD/BDT 119.8

IRR/USD 658,500

Commodities

Gold $4,412/oz

Brent $62.3/bbl

NatGas $4.18/MMBtu

Data snapshot based on latest available quotes (indices, FX, and commodities; delayed 15–20 minutes).

Updated: 6 Jan 2026 • 09:00 London • © THE MERIDIAN Data Desk

Cover, Synthesis & Flagship Frameworks

Editor's Letter · January 2026

A New Year for the Global South

The adjustment year begins. From Mauritius to Iran, Bangladesh to the Andes, 2026 forces hard choices on currencies, subsidies and the politics of tightening.

Framework · Global

The South as a System

How emerging economies interact, co-depend, and create their own circuits of risk and opportunity beyond the North.

Indicators · Data

The Meridian Indicators 2026

Our proprietary metrics for tracking debt stress, governance quality, climate exposure and human capital across 46 countries.

National & Regional Deep Dives

Mauritius · Country Report

Mauritius and the Economics of the Sea

Island nations, ocean territories, and the untapped power of maritime wealth navigating fiscal fragility and climate risk.

India · Country Report

India's GDP Mirage

A top-four economy with bottom-tier systems. Why headline growth masks deeper structural challenges in employment and productivity.

Iran · Country Report

The Economy of Iran and the Rial

Inflation dynamics, sanctions architecture, and the economics of isolation as the currency collapses to record lows.

Bangladesh · Country Report

Bangladesh After the Uprising

Post-revolution economic recalibration and the garment sector's uncertain future amid factory closures and political transition.

Africa · Politics

Africa's Ballots in 2026

Elections, incumbency risk, and the democratic stress tests across the continent in a year of economic pressure.

Political Economy & Governance

Governance · Institutions

When Conglomerates Become Ministries

How corporate power and state capacity blur in emerging economies, and what it means for accountability and reform.

Governance · State Capacity

When Governance Becomes Maintenance

Keeping systems running takes precedence over reform. Why crisis management crowds out strategic planning in stretched states.

Politics · Democracy

The Post-Democracy Playbook

Elections without choice, institutions without independence. How authoritarian stability sells itself as pragmatic governance.

Geopolitics · Influence

Soft Power, Hard Edges

Culture, investment and diplomatic capital. How the Global South deploys influence beyond military might.

Macroeconomics, Money & Finance

Macro · Inflation

Stagflation Returns

Slow growth meets persistent inflation. The policy dilemma facing central banks across emerging markets in 2026.

Debt · Sovereign Finance

The Age of Universal Debt

When every country borrows and no one defaults cleanly. Debt sustainability in a world of high rates and low growth.

Debt · Rollover Risk

The Maturity Wall 2026

$1.5 trillion in sovereign and quasi-sovereign debt comes due. Who refinances, who restructures, who defaults.

Monetary Policy · Rates

After the Peak: The End of Tight Money

Central banks pivot toward easing. But inflation persistence and currency fragility complicate the descent.

Currency · FX

The Dollar's Quiet Retreat

De-dollarization through trade invoicing, reserves diversification, and bilateral swap lines. Gradual, not dramatic.

Capital Flows · Investment

The Return of Domestic Capital

Local pension funds, insurance pools, and retail investors increasingly finance their own governments and firms.

Africa · Monetary Policy

Africa's Rate-Cut Cycle Begins

Nigeria, Kenya, South Africa pivot as inflation moderates. But currency weakness and fiscal strain limit room to ease.

Central Banking · Independence

Fiscal Independence: The Central-Bank Test

When governments pressure central banks to finance deficits, monetary credibility erodes and currencies pay the price.

Industry, Production & Trade

Manufacturing · Trade

The Manufacturing Pivot

Mexico, Vietnam, India compete for factory relocation. But infrastructure, skills, and policy consistency determine winners.

Energy · Industry

The Firms That Keep the Lights On

State utilities, independent power producers, and the private capital filling energy gaps across emerging markets.

Energy · Transition

Green Hydrogen's First Test

Namibia, Chile, and India's industrial gamble. Can they scale production before markets mature?

Society, Labour & Human Capital

Education · Technology

Learning in the Age of Automation

AI reshapes skills demand faster than schools adapt. What happens to workers trained for jobs that no longer exist?

Labour · Productivity

The Time Tax

Commutes, queues, bureaucracy. How time poverty undermines productivity and growth in emerging economies.

Migration · Voice

Exit as Expression: When Leaving Becomes the Vote

When elections fail to deliver change, people vote with their feet. Migration as political statement and economic safety valve.

Labour · Informality

The Informal Dividend

How unrecorded economies stabilise the Global South through flexibility, resilience, and social safety nets the state can't provide.

Demographics · Fiscal

The Pension Trap

Aging populations, unfunded liabilities, and the fiscal arithmetic that forces benefit cuts or tax hikes.

Climate, Resources & Environmental Stress

Climate · Food

The El Niño Hangover

Food insecurity and price shocks linger after the 2023-2024 event. Harvests recover slowly, budgets adjust painfully.

Resources · Geopolitics

Water as Power

Rivers, dams, and scarcity politics. Hydro infrastructure becomes diplomatic leverage and domestic flashpoint.

Climate Finance · Debt

The Debt-for-Nature Moment

Swapping sovereign debt for conservation commitments. Early deals show promise, but scale remains uncertain.

Growth, Development & the End of Old Models

Development · Growth

When Growth Stops Convincing

GDP rises but living standards stagnate. Why headline numbers no longer buy political legitimacy in emerging markets.

Fiscal · Subsidies

The Subsidy State: Cheap Prices, Expensive Currencies

Fuel, food and power subsidies protect voters but drain reserves and weaken currencies. The political economy of removal.

Culture · Industry

The South Designs Itself

Fashion, film, and creative industries emerge as economic drivers beyond commodities and cheap labour.

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