Dr. Omkar Shrestha
Research Associate, Institute
of Southeast Asian Studies – Yusof Ishak Institute (ISEAS)
Adjunct
Faculty, Economics Department, National University of Singapore (NUS)
It was an enlightening talk with Dr. Omkar Shrestha on “Nepal – A Stagnating Economy Sleepwalking towards Global Irrelevance” in NEA on Friday, August-5, 2016. On the talk, he shared the synopsis of global economy, Structure of Nepalese Economy, shifting of Global/Regional Economic Blocs, Irrelevance Indicators w.r.t. to global context and pragmatic suggestions for Reviving the Economy and Gaining Global Relevance. Our situations, according to Dr. Shrestha are really alarming, He urged to start some new initiatives to restore the Nepal Brand as well as utilise the natural beauties, resources, diversities, heritages and cultures to reclaim the Global Relevance.The talk was concluded with the profound remarks by Dr. Bindu Nath Lohani, Former Vice President of Asian Development Bank.
The useful information and important suggestions from the talk are:
Global
economic centre of gravity shifting to Asia :
u China
overtaking France in 2005, United Kingdom in 2006, Germany in 2008 and Japan in
2010; Goldman Sachs study shows China overtaking the US in 2026 (instead of
earlier forecast 2041);
u The
same report shows India overtaking Japan by 2032; China and India overtaking
the US economy two times by 2050;
u Nearly
50% of global GDP growth between 2010 and 2025 will come from 400 cities in
emerging markets; 95% of them being small and medium sized cities, the West may
never have ever heard of;
u Trade
and investment among the emerging countries doubled over the past decade;
u Goldman
and Sachs concludes its report with a question – “Are You Ready?”
Nepal –
Structure of Nepalese Economy:
u Consumption
share of GDP – 94% (Fuelled by remittances, a single driving factor, highly
risky
u Investment
(Domestic and Foreign) insignificant;
u Government’s
capital expenditures are small & constrained by implementation capacity;
u Export/Import
ratio – 1:11; Trade Deficit to GDP Ratio
– 32%
u Total
Imports – Rs 685 billion ; Total Exports
– Rs 61 billion; Total Trade Deficit –
Rs 624 billion (during 11 months of FY 2015/16);
Nepal – Global Irrelevance Indicators
Nepal – Global Irrelevance Indicators
u Nepali
Passport among the worst passport -
fifth from the bottom with Afghanistan, Iraq, Syria, Libya and Somalia
below Nepal according to Henley and Partners Visa Restriction Index, 2016;
u A
Nepali candidate gets selected in internationally-contested job but the second
ranked candidate is given the job offer simply because the job requires
frequent travel which is not possible under Nepali passport;
u General
perception that Nepali Passport can easily fall in wrong hands; Rampant cases
of passport losses; perception of violation to visa rules/obligations;
u Tendency
of Kathmandu-based foreign missions and embassies to look at Nepal from the lens of Southern neighbouring
country; Decreasing number of foreign misson;
u Poor
degree of connectedness to the world outside (by land and air); National flag
carrier is barred from flying the sky over US and Europe under Class III
category; Air connectedness influenced mostly by remittance-related factors;
u Nepal
delinked from the regional and global value chain (GVC)
u Political
instability resulting from wanton changes in Government with each regime’s
shelf life reduced to one year or less since 2008; No global public support
during five month border trade disruptions in support of Nepal;
u Country’s
poor ranking in various global indexes like Corruption Perception Index,
Pinkerton Country Risk Index, Human Development Index, Ease of Doing Business
Index etc;
u Unimpressive
economic achievement; Nepal overtaken by countries like Laos & Cambodia;
u No
foreign dignitaries’ visit to Nepal for a long time
Reviving the
Economy and Gaining Global Relevance :
u Place
Human economic rights ahead of human political rights;
u Address
political mess because poor economic performance more due to over
politicisation e.g. politicisation of
labour, students and even civil service; Over political protection to small
formal labour group at home and under protection to large labour group abroad;
u Address
software bottlenecks (lack of law and order, Breakdown of moral discipline,
rampant corruption, People’s mistrust in government services, and general mind
set of aversion to responsibilities etc) because they are even more urgent than
physical infrastructural bottlenecks.
u Remittance
earnings as a single driving force to growth is neither sustainable nor
prudent; Foreign employment cannot be answer to domestic unemployment problem.
u Government
itself can never create adequate jobs
(In total, 376,860 individuals on Nepal, Government salary); but it
should always create and maintain most attractive environment for domestic and
foreign investment;
u
It is time to treat water resources
beyond energy, as important as it is; Treat water as consumption product –
industrial consumption, agriculture consumption, human consumption; (India’s $168 billion River Linking Project that could
have bearing on Nepal water resources)
u Redefining
Tourism (Tourism sector’s direct contribution to GDP is embarrassingly low 2%);
u Proactive
promotion of “Silver Industry”, a massively expanding industry of $8 trillion
in 2008 projected at over $20 trillion over the next decade;
u “Inevitability”
of Nepal as a “Trade Gate” between Asia’s two major economic houses, It is time
not to keep ourselves mind-locked that
Nepal is landlocked;
u “Gravity
of Proximity” is weakening in goods as well as services
u Education
as the great leveller; “Knowledge products” or the “idea products” like the 3-D
manufacturing and other high-tech products as the exit door to Nepal’s
geographical bottleneck;
Restoring
Nepal Brand and Reclaiming Global Relevance:
u Reassert
Good Governance by eliminating prevailing Trust Deficit between people and
political leaders, between people and police, between people and professionals
in various fields;
u Stress
Human Responsibilities – not just human
rights; Accountabilities not just authorities, and discipline, law and order
not just democratic rights;
u Consider
setting up “The Kathmandu Dialogue” –Invite world class thought leaders
for deliberation on current issues of country-concern; Make their voice the
country’s voice; Make them act as the country’s “Good Will Ambassadors”;
u Join
as many regional bodies like Singapore does; smaller nations get their voice
heard only through regional bodies; bilaterally they are too small to be taken seriously.
u For
smaller nations, global relevance is not something to be taken for granted; It
is like an artefact that is to be created and earned;
Nepal – Our Land:
Our Nation
u Nepal
– This is a rich country being made poor and miserably dependent on
remittances; This is a rich country inhabited by poor in an environment of
ethical collapse and ill governance led by leadership deprived of long -term
vision;
u This
was a country with the image of Shangri La now tarnished to the image of a land
of migrant workers; It is a country with rich tapestry of multiple cultures now
being reduced to ethnic or geography-based identities rather than ”Nepali” as
its first identity;
u This
was a country once provided with easy visa access to a number of counties but
now reduced to among the world’s worst passports, fifth from the bottom with
only Afghanistan, Iraq, Syria, Libya and Somalia under it;
u This
is a country with overwhelming potential and underwhelming performance; It is a
land of resilience and unending hope as seen after the major earth quake in
2015;
u We
have so much contents & substance to convince the larger world – nature’s
gifts, ancestors’ heritages; people’s bright resilience, the optimistic
attitude, the likeability and the contagious smiles;
u “It
is among the mother earth’s most photogenic country” National Geographic
u Kathmandu
- Most dense in the world in terms of
cultural heritages: UNESCO
u Nepal
– From flat land of Lord Buddha’s Birthplace Lumbini to Mt. Everest, the
world’s roof
u Home
to near-extinct multiple birds and flowers;
u Water
stressed Asia’s home of 6,000 rivers and over 200 majestic lakes and ponds;
……
Who in Nepal
will win if Nepal fails? Who in Nepal will fail if Nepal wins?
ARE WE READY?
