The mantra for self-reliance
- What could be the possible path for a self-reliant and a balanced economy, asks Political Economy of Nepal
Jul 15, 2017-After experiencing the acute scarcity of basic goods and services—like petroleum, medicine and food—in the wake of the unofficial border blockade in 2015, a self-reliant economy quickly became the ‘buzz word’ among government actors, economists and public intellectuals. In its strategic paper—the Fourteenth Plan—the government even made self-reliance its primary economic vision, spelling out sweeping principles, broad visions and ambitious projects to materialise the goal.
But what could be the possible path for a self-reliant and a balanced economy, asks the newly-published book Political Economy of Nepal. The book, jointly published by Central Department of Economics, Tribhuvan University, and Friedrich Ebert Stiftung, Germany, incorporates eight chapters—ranging from Nepal’s experience with globalisation to pointing a way forward for the country’s political economy to transition into a regime of self-reliance—underscoring that major overhauls made in any economy, must first be preceded by rigorous academic debate.
In the span of 60 years, Nepal has had three different political regimes—the party-less Panchayat system, multi-party democracy under a constitutional monarchy and the Federal Democratic Republic setup. But, regardless of the political system, the country saw various degrees of chronic instability with the government and political actors chopping and changing every other year or so.
In the 1960s, at a time when Nepal threw open its borders in earnest for the very first time and globalisation began to spread around the world, the Panchayat system adopted inward-looking policies such as import substitution, protectionism, establishment of state-owned enterprises and a mixed economy. During its final years, the regime did adopt an economic policy of liberalisation, which was then adopted as the central tenet under the post-1990 multi-party democracy. This opened up avenues for privatisation, globalisation, I-NGO-oriented development model and a market-driven economy. During this phase, the private sector seized the initiative in the production sector, while NGOs became important service providers. These policies have in turn been adopted in the Federal setup, although the new constitution—promulgated in 2015—embraced a social market economy.
As a result of these frequent changes in personnel, and more importantly in the larger macro-economic vision, self-sufficiency has fallen to the wayside and Nepal has not been able to achieve sustainable growth or minimise the severity of its escalating trade deficit. Often times, the market economy is argued to be a cure-all, but it is not a magic wand that can wave all problems away, the book argues. Instead, the authors envisage that even within the larger framework of the market economy, the country can reduce the degree of dependency and move towards the path of balanced interdependence in this globalised world.
Written by experts of economic and political sectors, Political Economy of Nepal is a good segue for a critical evaluation of the market economy in line with political agendas adopted by the new constitution. The country has benefitted from the open market policy adopted in the early 1990s, and economic activities have expanded significantly after the economic liberalisation and reforms. However, the progress has been achieved at a high social cost alongside other pitfalls such as widening trade deficit, high corruption and high reliance on remittance. This calls for, the book suggests, an intensive discourse on ways to achieve economic self-sufficiency without undermining the role of globalisation.
The first chapter, Inquest of Self Reliance, presents the binding theme for rest of the chapters. In the aftermath of the acute scarcity of basic goods and services in the wake of undeclared blockade and imbalance interdependence between countries, the author has come forth with possible avenues of achieving self-reliant economy with balanced interdependence that set the tone for the analysis made through the rest of the book—namely development of hydropower and alternative energy, development and technological innovation in agriculture, development of the tourism sector, reducing the size of aid dependency, regulation of labour migration and institutionalising a robust monitoring mechanism.
In the chapters that follow, the book compares and contrasts the macroeconomic performance of three different political regimes of Nepal. They also underscore both positive and negative aspects of globalisation and Nepal’s experience with WTO, BIMSTEC and SAFTA, among others. Furthermore, the book also examines the status, problem and solution that accompany foreign aid in Nepal, while questioning the role of NGOs and INGOs and their influence on domestic policies and state autonomy.
A segment in the book, Rebuilding Resilient Economy of Nepal, puts light on how the cultural syncretism of Nepal is the main source of social capital and “the key economic resilience in the face of major shocks and disasters, to ensure the self reliance”. The chapter explores future mechanism for the rebuilding of the Nepali economy from the social democratic and labour market perspective.
The book also assesses the impact that labour migration and remittance inflows have on developing countries like Nepal and how related laws and policies need to be shaped accordingly to balance the economic phenomenon. The final chapter, Political Economy of Self-Reliant Development: Theories and Practice, in particular, is an eye-opener. The chapter, which primarily focuses on theory of self-reliant economy and practices in Nepal, comes with a critical review of development efforts made in last five and a half decades (1960-2015). The chapter meticulously inspects the major lapses and shortcomings of both autocratic and democratic regimes.
Alongside Ram Prasad Gyanwaly, the head of the Central Department of Economics at TU and the editor of the book, Political Economy of Nepal has to its name a list of eminent economists in the country such as Sohan Kumar Karna and Rashmi Shilpakar, Chandra Dev Bhatta, former NPC member Dilli Raj Khanal, Prakash Kumar Shrestha from Nepal Rastra Bank (NRB) and Dev Raj Dahal from Friedrich-Ebert-Foundation-Nepal.
As Nepal seeks to transition not just between the political system that govern it but also its macro-economic modality, the book, no doubt, will play an important role in compensating for the lack of papers that provide a perspective on Nepali economy. Political Economy of Nepal, therefore, will be an asset that might aid policy makers and planners at government bodies, alongside students pursuing economics, management, political science and policy studies. The lay reader, on the other hand, will find little joy in the voluminous chapters included in the book, even if it is tightly edited and generally well-written.
Published: 15-07-2017 08:56