Proposal For Prosperity
These days economic prosperity has become a buzzword in the Nepali society. Everyone is - knowingly or unknowingly - talking about prosperity. The Left Alliance has recently formed a two-thirds majority government - along with the support of Madhesh-based parties - under the premiership of CPN UML chairman KP Oli and leaders of that alliance are also relentlessly advocating the slogan of economic prosperity. So, in this scenario, I think, it would be wise and fruitful to understand the dynamics of economic prosperity in relation to the the Nepali economy.
Our general perception of economic prosperity merely implies economic growth of double digits at least for two decades, huge increase in per capita income of the Nepali people, expansion of the service sector, rapid industrialization in the Terai belt, and transformation of metropolitan cities like Kathmandu, Pokhara, Chitwan and Biratnagar into smart cities. However, all these things alone cannot make the Nepali economy a prosperous economy. Economic prosperity in context of the Nepali economy is a much broader concept whose understanding is a must if we really want to build a prosperous Nepal.
At least three things must be understood in detail and in-depth before talking about economic prosperity in the Nepali context. They are: basics of economy, nature of the Nepali economy, and sustainable economy.
Production, exchange, consumption, distribution, public finance and international trade in totality form the national economy of a country. Among them, production is the root of everything in the modern market economy. If there is production of goods and services of various kinds within the domestic territory of a country, then only other aspects of national economy have some sense; otherwise, these other components of national economy can never contribute in achieving economic prosperity. What I mean to say is that production alone constitutes the backbone of any national economy. An economy must produce basic goods like food, energy and ecology within its own national geography if it wants to be self-reliant, independent and sustainable.
At present, Nepali economy can be broadly divided into two main parts: rural economy and urban economy. Until some time ago, the rural economy of Nepal was more production oriented. It was the primary economy and urban economy was just a derivative of it. It used to produce all required food stuffs, labour force and raw materials for the entire national economy in the past. However, at present, thousands of hectares of cultivable land in the rural areas of both Terai and hills remain either fully or partially barren, as the agriculture labour - which used to be available in abundance in the past - has either migrated to urban areas or has gone abroad for foreign employment. So, the rural economy no more produces sufficient goods and services for the national economy. Technically rural economy is almost entirely dead as it is no more the production house of the Nepali economy; rather it is gradually becoming more reliant on imported goods for meeting its basic consumption demand. Also, it has completely lost its linkage with the urban economy as it supplies nothing to the urban economy.
Urban economy, on the other hand, was more consumption oriented from early on and has maintained the same rhythm in the present as well. The only difference between the past and the present is that, in the past it used to get basic goods from the rural economy and, at present, it gets all such basic consumer goods from imports. Indeed, it has become completely reliant on imports for both basic and durable consumer goods of daily need. So, at present, Nepali economy is without a strong and reliable base. It may collapse at any time if there is unexpected disturbance in our import system. Evidence for such collapse can be easily obtained from our recent past. Nepali economy had faced a disaster after the neighbour India imposed an unannounced blockade in 2072 BS. And, the rhetoric of economic prosperity, which we all are reiterating, does not address these kinds of pertinent and genuine issues. The scope of the so-called economic prosperity is urban economy only. The axiom of economic prosperity in Nepal has completely forgotten its rural economy, or has no concrete plan to restore the vitality of the rural economy.
The economic prosperity, in true sense, can be achieved only when it is sustainable from all aspects. Economic prosperity achieved at the cost of environmental degradation, cultural depletion, social degeneration and faulty diplomacy with the neighbouring countries can never make the Nepali economy sustainable. An economy is sustainable only when it is deeply integrated with the social and cultural life of the people, and is eco-friendly as well. For instance, the traditional houses of Terai are made of mud, bamboo and straw which are eco-friendly, healthy, and are built by utilizing the locally available renewable raw materials. So, living in such houses is real prosperity. However, we are advocating for concrete houses made of cement as an symbol of prosperity. It’s a nonsense. If we invest the financial resources absorbed while building a concrete house into providing education, health, or sanitation to the members of the concerned family, then that could bring more prosperity in the lives of the concerned family members.
So, if we really desire for economic prosperity of sustainable nature in Nepal, then some genuine issues must be addressed with great composure and conscience. The first thing is that more emphasis should be given to production of basic goods and services within the domestic territory. As rural economy is the real production house of Nepali economy, it would be wise if rural economy is kept in the forefront while choosing a model for the economic prosperity of Nepal. A healthy economy can be built only through the promotion of organic agriculture and both government and private sector should come with massive investment scheme for its modernization, industrialization and commercialization. Optimally mobilized agro-economy can easily make us self-reliant and independent on daily food requirement which could be a great step for achieving the economic prosperity. Not only this, it can also absorb the excess unemployed labour force within the domestic economy. Besides this, we can also develop rural economy based industries and tourism in Nepal.
And, the second thing is that urban Nepali economy can be uniquely developed by making it a sandwich between the rural Nepali economy and the two giant economies of India and China. Rural Nepali economy, on the one hand, will provide it the basic and strong foundation while the two giant economies of India and China, on the other hand, will provide it a solid ground for accelerating and expanding its economy. So, in conclusion, if the present KP Oli-led government paved a path for such model of economic development, then the Nepali economy can achieve economic prosperity of sustainable nature.