Saturday, June 7, 2014

Nepal a stone in between two yams

Dr. Christopher Lingle is a free market economist, academician, freethinker and the author of the famous book Singapore’s Authoritarian Capitalism. Familiar with Nepal for long, Dr. Lingle was in Kathmandu for a seminar, and Nepalkanoon’s Shishir Lamichhane got a chance to talk to him on some topics related to Nepal. Here is the excerpt of what he had to say:
Nepal in between two rising economies
Two hundred forty years ago, Prithvi Narayan Shah said that “Nepal is a yam between two stones”. But today, Nepal remains a stone between two yams, India and China, as both have progressed way ahead and Nepal’s economy remains backward and stagnant. The blame can be very much put upon the policies that failed and are failing and the politicians and bureaucrats that oversee them. This is meant to directly attack the policy makers/politicians who have chosen to be vassals of foreign players and to have failed their own citizens. If politics is not in order, other things won’t get momentum. Power distribution and controlling the access to incomes from corruption has received more attention than the development of the country. While some may be honest and competent, the poor performance of the economy does provide results to inspire confidence.
There is no precise consensus among the political parties or in the government as to what the foreign policy of Nepal is or what sort of economic policies can yield high growth. Intellectuals suggest three kinds of foreign policy: equiproximity, equidistance and equibalance. Nepal is not a landlocked country but an “India-locked country” accompanied by China. Here an equibalanced foreign policy is suggested as the best suitable for Nepal.
Nepal can grow without India and China. The existing potential inside Nepal is enough to make vibrant and massive economic development and Nepal does not have to depend on foreign trade per se, although it should not avoid it. But it should seek good relations with both India and China in a manner that serves Nepal’s interests than others’
Nepal should act not as a bridge but as a trade corridor between India and China with the equibalanced foreign policy. This would allow Nepalis to earn massive benefits as a “middleman”.
All should be allowed to compete in the market. More economic activity means more jobs and this leads to more specialization that will increase the overall standard of living. More regulations tend to hinder economic activities so that there are fewer new jobs and more misery.
Nepali faulty mentality on agriculture
The mentality of Nepalese to view agriculture as a low level activity is the problem as well. If you approach it as a high value-added activity, agriculture can lead to substantial gains from trading. By labeling agricultural product with something like “fed by the pristine waters of the Himalayas” will allow products to be sold at a higher price and even demanded more.
It has always been obvious that state should seek advantage for themselves and concessions in a quid pro quo basis. That is what international relations should be  BE all about, seeking advantage for one’s state.
Nepal’s diplomatic colonialism
Nepal is facing diplomatic colonialism from India, or more precise and explicitly, India operates as a “democratic imperialist state”. Assam and Sikkim are examples of an imperialistic nature of the “largest democracy in the world”. While Bhutan remains as a vassal state of India as well.
It is high time to think about preventing Nepal from being controlled by other states. A school of diplomacy necessary for the context of Nepal seems more necessary than ever. Policy makers with good head, heart and hand i.e., good understanding, honesty and responsibility are required but tragically many lack the compatibility of these three things.
It’s not a good idea to be a vassal state, and this fact needs to be construed well by the people and intellectuals when the political class has already given up a substantial part of the sovereignty to India. People shouldn’t be an instrument of the state, and similarly the state shouldn’t be the instrument of another state.