Across diverse political systems, youth-led protests have highlighted the inability of economic growth alone to translate into jobs, equity, and upward mobility
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The global contagion of protests in Iran, Bangladesh, Nepal, and Sri Lanka has its roots in common underlying socio-economic stimuli, despite later expanding to become more political. Operating under distinct political systems with clearly different institutional characteristics, the protests have led to remarkably similar outcomes. A common feature is that young people have emerged as the most active participants in the protests. The movements have also largely developed as leaderless and decentralised, with political forces aligning in the later stages. A key reason underpinning the movements could be the expanding role of the internet and social media, which have not only amplified global exposure but also raised public awareness of existing domestic inequalities. There is a growing aspirational demographic, especially among the youth, disillusioned with limited economic and social upward mobility. The protests have overlapping causes, which are inherently geography-agnostic — lack of employment opportunities, discriminatory practices, rising inequality, and faltering economic justice.
These countries are not experiencing economic stagnation; rather, GDP growth rates in Nepal, Bangladesh, Sri Lanka, and Iran have ranged from 3.7 percent to 5 percent in 2024, above the global average of 2.9 percent. The primary concern is not the absence of growth but its unevenness.
The Iranian protests are rooted in deteriorating economic conditions, exacerbated by successive rounds of US sanctions. In FY 2025, Iran’s GDP growth slowed from 4.6 percent to 3.7 percent, the lowest in five years. This led to labour market pressures, with employment generation proving inadequate. Only 3.8 in 10 working-age individuals are employed in Iran, with the rate even lower for women, at 1.2. In December, the Iranian rial dropped to 1.42 million to the US dollar, a record low, under renewed sanctions. This was accompanied by rising inflationary pressures, including sharp increases in food and fuel prices. In 2025, the inflation rate reached 42.2 percent and food prices escalated by 72 percent compared to the previous year.
In Bangladesh, protests stemmed from demands to eliminate quotas in public sector jobs. The unrest emerged from deeply entrenched grievances related to nepotism, inequality, and governance failures. The student-led movement highlighted underlying structural socio-economic fault lines. The country’s economic expansion has not translated into equivalent job creation, placing tremendous pressure on labour markets. Despite the manufacturing sector generating relatively well-paid employment, job creation stagnated and weakened, with employment contracting by 10 percent between 2016 and 2022. These vulnerabilities are especially skewed towards youth and women. The youth unemployment rate reached 8 percent, while it was 14 percent for university graduates in 2023. These constraints reinforced dependence on public-sector employment and emerged as a key driver of widespread outrage.
A key reason for uneven, jobless economic growth is the lack of structural transformation. Typically, economic growth is accompanied by labour shifting from low-productivity activities to higher-productivity sectors; however, these countries have experienced incomplete transformation.
Nepal witnessed widespread Gen Z-led protests in 2025, directed towards addressing corruption, inequality, and rising economic distress. About 20 percent of Nepal’s 30 million population lives in poverty, and unemployment among youth aged 15–24 stands at 22 percent. Income inequality remains pronounced, with the top 10 percent earning more than three times the income of the bottom 40 percent. With over one million young people migrating abroad in search of work, limited domestic employment opportunities have deepened youth disillusionment. Moreover, most employment is informal, low-wage, and characterised by weak job security. Together, these socio-economic pressures have intensified the strain on Nepal’s youth, manifesting in large-scale movements across the country.
Similarly, Sri Lanka witnessed the ‘Aragalaya’ protests in 2022, fuelled by a debt crisis, hyperinflation, and currency collapse. The youth played a decisive role in sustaining the movement, underscoring deep frustration with the failure to convert educational attainment into upward social mobility.
These countries are not experiencing economic stagnation; rather, GDP growth rates in Nepal, Bangladesh, Sri Lanka, and Iran have ranged from 3.7 percent to 5 percent in 2024, above the global average of 2.9 percent. The primary concern is not the absence of growth but its unevenness. In Sri Lanka, despite high secondary education attainment of about 81-83 percent, the share of youth not in employment, education, or training remains elevated at 18 percent. Iran exhibits similar characteristics, with high levels of educational attainment accompanied by persistently high unemployment. Nepal faces a dual challenge of lower secondary education attainment alongside high youth unemployment, indicating failures in both human capital formation and job creation. Bangladesh continues to grapple with inequality, with a Gini index of 30.9.
As economists Daron Acemoglu and James Robinson argue, institutions shape the distribution of resources in society; weak or extractive institutions therefore impede inclusive growth and upward mobility.
A key reason for uneven, jobless economic growth is the lack of structural transformation. Typically, economic growth is accompanied by labour shifting from low-productivity activities to higher-productivity sectors; however, these countries have experienced incomplete transformation. In Bangladesh and Nepal, a large share of the workforce remains engaged in agriculture and informal services. Sri Lanka’s growth has largely been driven by infrastructure investment, while Iran’s economy remains heavily dependent on hydrocarbons, constraining job creation and heightening risks of hyperinflation.
Political risks and sanctions have further dampened private sector investment. Another major factor is institutional weakness. As economists Daron Acemoglu and James Robinson argue, institutions shape the distribution of resources in society; weak or extractive institutions therefore impede inclusive growth and upward mobility. The protests point to the prevalence of crony governance, weak labour markets, exclusionary policymaking, and low accountability. Political instability and economic underperformance form a classic chicken-and-egg dilemma, reinforcing a cyclical loop. Unless the aspirations of the youth are addressed and meaningful structural reforms are implemented, the unrest is likely to persist in the long run.
Shruti Jain is an Associate Fellow with the Centre for Development Studies at the Observer Research Foundation.
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Shruti is an Associate Fellow at the Centre for Development Studies, Observer Research Foundation (ORF), where her research examines the intersections between policy, economic diplomacy ...
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