Had an opportunity to go through the former Prime Minister Dr. Bhattarai's lecture at Tribhuwan University entitled "THE NATURE OF UNDERDEVELOPMENT & REGIONAL STRUCTURE OF NEPAL: A Marxist Analysis"(http://www.slideshare.net/slideshow/embed_code/37144918#). His exposition on persisting stubborn underdevelopment of Nepal in context of Neo-Marxist theory of movement of surplus value from the periphery towards centre was really succinct and lucid. Being a staunch supporter of Austrian School of Economics I was rather surprised by his accurate assessment of poverty in Nepal from Marxist point of view. Especially in his slides he has clearly pointed out that the major economic hurdle Nepal faces is asymmetric trade between India and Nepal since the Sugauli Treaty. The historical reference he has provided regarding the balanced trade Nepal had between both Tibet and India before the Anglo-Nepal war is something every policy maker should heed to. Apparently in both ancient and medieval time Nepal had a vibrant economic trade with both its neighbor. During the time of Sino Chinese war in 18th century Nepal was so powerful that she even decreed Tibet to use our sovereign coins for trade.
But today's circumstances are completely different. Compared to volume of trade with southern block our trade with northern neighbor is a morsel. Dr. Bhattarai has correctly pointed to this trade disparity as one of the major obstacle in country's development. He has also pointed out the concentration of workers from all over the countries to major cities such as Kathmandu, Biratnagar and Birgunj as the leading cause of inequitable growth. Besides these two major concerns in his lecture also notes the diminishing marginal return in agricultural sector as another aspect militating against the equitable development. And finally in a very last slide he provides his prescription to break free from vicious spiral of poverty in a trifecta- Federalism, Balance trade and Inclusive Development. But unfortunately he simply list them out and stop short from providing the proper road map to achieve them.
And this is the point where I think he fails to deliver in his otherwise brilliant lecture. The first issue is of course the most contentious one: Fedralism. He hasn't mentioned on what basis should the lines of federalism be drawn. Further he completely glossed over the political malfeasance that has so far plagues the entire issue. There is no denying that federalism the only way out from preventing wealth being concentrated only in urban centers, but until the argument of whether using geographical or ethnic basis as criteria for drawing federal map is resolved this issue will remain in limbo. Of course it is really easier said than done. And even after it get solved the other issues such as tariff barriers, state level taxes and equitable sharing of natural resources will undoubtly require extensive exercise before fruits of federalism can be reaped.
As for balancing trade with our neighbor goes this I think will remain a pipe dream until the feeling of enmity between both our neighbors get sorted out. And this of course is beyond our capacity. But that doesn't mean there is nothing we can do. In fact there are few things we can do in our home front. The first thing is trying to make Nepalese currency convertible in India. Second is to make Yuwan fully convertible in Nepal. One other effective option will be instead of fixed peg with Indian Rupees, a new peg should be establish with basket of Indian rupees and chinese yuwan, Further currently there is undercurrent brewing in SAARC region to establish single currency governed by same monetary policy. This idea though far-fetched can be very good for Nepal as trying to maintain fixed rate vis a vis India and independent monetary policy , we are witnessing large capital flight as predicted by Impossible Trinity of Mundell-Fleming model. But again the entire premise still hinges on the effective diplomacy. However one encouraging note in this front is establishment of BRICS bank of which both India and China are members. Nepal will need to leverage this new opportunity with skillful shuttle diplomacy in order to bring in capital which unlike the investment from world bank won't be objected by both our neighbor.
Finally the third point Inclusive Development can be achieved only by grass root level movement of increasing local skill and literacy rate. Instead of resorting into populist Affirmative action program, the policy should address towards increasing the core competency level of ethnic minorities. A gramin bank model of financial institution should be established that provides small capital without collateral to women, ethnic minorities, marginalized groups in order to promote small entrepeneurship.
Despite these short comings in his lecture everyone should laud Dr. Bhattarai's trail blazing attempt of sharing his experience with students. Let's hope this prelude will create a knoweledge sharing culture which will be nurtured and in future other policy makers and politicians will also engage in such endeavors.
No comments:
Post a Comment