Need of Redefining Economic Nationalism in Nepal’s Development

Executive Summary

‘Nation cannot be built overnight’ but for Nepal - development cannot wait to progress piece by piece. Thoughtful planning shall be followed by strong footstep of implementation. Nothing can be improved or changed without completely heartily participation of citizens. Political leaders are mirror of public and politicians are obliged to deliver developments for all trusts and responsibility awarded. As Nepal has not been able to gear up for economic development, we need to figure out unnoticed reasons behind. Constitutional democracy has bestowed few insights of progress in academic, tourism and industrial sectors. However, the same journey dissolved hope, progress, and opportunity together in a bucket of permanent migration, fear and confusion. In Nepal’s journey of democracy, developments could not ripe in comparison to high hopes flourished, resulting into shrinking faith towards system and leadership. At this critical point of people’s craze to leave village and shift to cities or leaving small cities to Kathmandu or shifting from country to other countries, Nepal is going to face deficit of major capital of development i.e. human capital. Faith needs to be restored to reinstate love and responsibility towards soil.

Nationalism

Dictionary meaning of nationalism is identification of own nation and support for its interests, especially to the exclusion or detriment of interests of other nations. In simple words, it is an ultimate love, care and responsibility towards one’s motherland in a dignified and honorable way.

Economic nationalism is an ideology that favors country’s intervention over other market mechanisms, with policies such as domestic control of the economy, labor and capital formation.

Facts

The general trend for landlocked countries like Nepal is that they trade 30 percent lesser than coastal countries. As transportation costs for landlocked countries are up to 50% higher than coastal countries, even more for mountainous country, importing goods would be discouraging, as they would cost more. Nevertheless, Nepal has always bucked these trends and is an import reliant economy where more than 40% of all its revenues come from import. The continual rise of imports throughout its history has been recorded. The binging on imports versus weak exports records its chronically widening trade deficit that is adversely affecting its development. Since the last 25 years contributing to more than 40% of the entire GDP of Nepal, trade has remained a key factor in determining its economic condition and direction. Nepal has been running an ever-widening trade deficit since 1965. In addition, infrastructure development could not take any remarkable achievements in these years. Even distribution of infrastructure is mandatory for transforming nation through prosperity.

Clear vision, designs and roadmap are not in paper for nationwide for infrastructure and economy improvement.

 Way forward

The reliance on imports also causes many other negative impacts ranging from lack of innovation and entrepreneurship, ballooning trade deficits, depleting foreign currency reserves and stifling of fast-paced economic growth. All these problems can spate Nepal.

Therefore, it is imperative for Nepal to pursue effective import substitution strategies. Nepal has tried to come up with solutions of export-oriented industrialization and trade diversification to resolve such issues. They have produced ineffective outcomes as evident by ballooning imports, widening trade deficit and low global ranking. Some of bold strategies shall be:

 1.     Optimizing gifted potentials

Nepal is naturally blessed country in terms of geological structure and resources. Laws to be framed protecting such resources from encroachment, misuse and interruption against purposeful use.

·        Energy sector – Nepal has economically feasible capacity of more than 45000 MW of hydro energy and almost equal opportunity for solar. Nation shall bring long term policies to mobilize economy through own energy.

·        Restrict fertile lands for habitation or commercial purpose. Five decades ago, Kathmandu used to be most livable country in world but now deteriorated by unplanned urbanization. Not only country buried major portion of fertile land, also lost its beauty for tourism. So all fertile lands shall be utilized for agriculture only.

·        Economically feasible products shall be produced within country by government investments. Import and consumption of luxury products shall be discouraged.

·        Developments shall take place without harming natural and cultural environment. Various tourist attractions shall be brought into cities to attract tourist from all over the world.

·        Mandatory service clause to be implied in logical manner.

·        Love for self-grown food staples, own products shall be blended to culture

 2.     Revitalizing education system of Nepal for innovative education

Country has invested substantial amount in education sector. At present, we have approximately 35000 school, 3700 Higher Secondary Schools, 1400 colleges, 9 universities, and 4 medical institutions. Annual budget of Rs 170 billion is allocated for educational development. Unfortunately, development in Nepal Education Sector could not accelerate well in global competition. As a result, majority of Higher Secondary Graduates are moving gulf countries to earn basic earnings for survival, while eligible students/professionals migrate towards western countries for long-term relocation. Every year more than 63,000 students are going abroad for studies with least chances of returning. Innovative education system shall be introduced so that citizen be motivated to stay in own country with dignity. Technological advancement and infrastructure development are crucial to bestow hope of opportunity, social security and opportunities.

 3.     Strategic planning for better infrastructure developments

Many ambitious projects were aborted in past, many areas were ignored blindly. Trans- Himalayan cross boarder railway to be built immediately. Nepal being at center of blooming economy and holding harmonious relationship with all the neighboring countries will reap maximum benefits by transportation connecting all the corners. Nation shall think about next 50 years and plan its resources, capital requirement, funding plan and cost-benefit analysis of all national projects. Rightful plans shall be developed to provide long-term direct benefits to project affected people.

 4.     Digitization of Currency

Nepal's currency has continuously depreciated versus US Dollar with which foreign trade payments are settled. This has caused a precarious depletion of Nepal's foreign currency reserves breaking central bank’s 8-month minimum threshold. While currency devaluation or depreciation for an exporting economy usually make exports more competitive and augments growth, for an import-based economy like Nepal it depletes its foreign reserves and stifles growth. Cryptocurrency shall in system at first priority for various direct and indirect reasons.

 5.     Managing Geo Political Challenges

Nepal has been suffocated in a cocoon made of multiple layers of geological challenges, diverse emotional barriers, national- international politics and century’s old debates and limitations. Rigorous efforts are needed to visualize future, calculate risks, design needed roadmap and hike to create environment for sustainable growth.

Why nationalism wave needs to flow in Nepal Air for economic transformation

Being nationalist with patriotic zeal is essential for every well-thought-of national and anyone devoid of nationalism practically cease to be loyal citizen. Nepal has crossed a long and perilous journey of democracy in past six decades and nationalism was put to test many times. Fighting for basic rights of education and freedom in early 2000 BS to 2063 BS movement for republic system, patriotism concept has also been defined in various ways. At this fragile economic scenario, economic revolution shall begin with new definition of nationalism. Not only love, but also responsibility towards birth soil shall be germinated with all strings and knots. Every Nepali heart must realize that nations come first than anyone and anything. Policies and Planning shall be executed strictly without deviation from the spirit of constitution of Nepal.

For Nepal – Economic Nationalism can drive vision of nation building. Nationalism cannot be soiled into someone’s psyche and soul completely, but shall revolve within a civilized human being with logical and sensible approach. Nepal shall develop national interests, create nationalism economy vision and exercise those economically feasible practices with strict laws. Human capital is most important factor for any country’s development and enrolling every citizen whole heartily is must for micro to macro level policy changes and developments.

CA Sanju Adhikari

Originally published on June 2020 Journal of The Institute of Chartered Accountants of Nepal.

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