व्यापार तथा भूमण्डलीकरणः एक परिचय

व्यापार तथा भूमण्डलीकरणः एक परिचय

  June 09, 2026    Surath Giri

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डा. इमन् बट्लरद्वारा लिखित ‘एन इन्ट्रोडक्सन टु ट्रेड एण्ड ग्लोबलाइजेशन’ (An Introduction to Trade and Globalization) अन्तर्राष्ट्रिय व्यापार, खुला बजार र भूमण्डलीकरणका आधारभूत आयामहरूलाई सरल भाषामा बुझाउने एक उत्कृष्ट पुस्तक हो । यस पुस्तकमा लेखकले विगत ५० वर्षमा विश्व व्यापारमा भएको तीव्र वृद्धि, अन्तर्राष्ट्रिय राजनीति र वाणिज्यबीचको बढ्दो सम्बन्ध, तथा आधुनिक जीवनमा भूमण्डलीकरणको अपरिहार्य भूमिकाबारे गहन विश्लेषण गरेका छन् । व्यापारले कसरी दुई देश वा समाजबीच द्वन्द्व नभई आपसी समृद्धि र सकारात्मक आर्थिक परिवर्तन ल्याउँछ भन्ने कुरालाई बट्लरले यस पुस्तकमा स्पष्ट पारेका छन् । यस पुस्तकमा अर्थशास्त्रका जटिल सिद्धान्तहरूलाई सर्वसाधारणले पनि सहजै बुझ्न सक्ने गरी प्रस्तुत गरिएको छ ।

 

मैले सन् २०२४ मा समृद्धि फाउण्डेशनका लागि यस पुस्तकलाई नेपालीमा अनुवाद गरेकाे थिएँ । मलाई लाग्छ नेपालजस्तो विकासोन्मुख देशका लागि यो पुस्तक अहिलेको समयमा झनै बढी सान्दर्भिक छ । हामी कसरी विश्व बजारसँग जोडिएर आर्थिक लाभ लिन सक्छौँ र व्यापारलाई जति धेरै नियन्त्रण गर्‍यो, त्यति नै कसरी हाम्रै अर्थतन्त्र संकुचित हुँदै जान्छ भन्ने कुरा यसले बडो गज्जबसँग बुझाउँछ । विशेष गरी अर्थशास्त्र, व्यवस्थापन र राजनीतिशास्त्रका विद्यार्थीहरू, लोक सेवाको तयारी गरिरहनुभएका साथीहरू, र नेपालको आर्थिक नीति एवम् वैदेशिक व्यापारमा चासो राख्ने जोकोहीका लागि पनि यो पुस्तक एउटा नभई नहुने र निकै उपयोगी सन्दर्भ सामग्री बन्नेछ भन्ने कुरामा म विश्वस्त छु ।

 

तपाईँले यो पुस्तक यहाँ पढ्न वा डाउनलाेड गर्न सक्नुहुन्छ । 

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Equality or Enough for Everyone? A Review of Eamonn Butler’s “An Introduction to Economic Inequality”

Equality or Enough for Everyone? A Review of Eamonn Butler’s “An Introduction to Economic Inequality”

  April 01, 2024    Surath Giri

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[This review was originally published in www.nepallivetoday.com on March 14, 2024]

Our public discourse is dominated by the agenda of economic inequality. The myriad of social and economic challenges plaguing our society are attributed to economic inequality, ostensibly stemming from capitalism and free markets. From poverty to pollution, from disparities in educational outcomes to youth unemployment, prevalent economic inequality is touted as the root cause. If only we had economic equality, we wouldn’t have half these problems, we are told. In Nepal, a country which as per its constitution is a socialism-oriented country, attaining equality in all facets of life is entrenched as our primary societal aim. Moreover, the sacrosanctity and desirability of equality are taken for granted. Equality is not just seen as a desirable state in itself, but also as a means to achieve other desirable goals such as development and happiness.

In such a scenario, it feels borderline immoral to criticize equality or even question the pursuit of it. And that’s precisely what Eamonn Butler has attempted to do in his book “An Introduction to Economic Inequality”. In this short introductory text, Butler lays out the multifaceted nature of economic inequality and manages to question and counter all the major assumptions and arguments made in the current bandwagon for the pursuit of economic equality. He meticulously dissects the major arguments made in favor of economic equality, providing a thorough critique, and offering insightful counterpoints. Butler’s book is an important reminder that if we allow the popularity of an idea to overshadow its merit, we not only have a poor understanding of it but also risk disastrous consequences from our misguided efforts. As the readers reach the end of the book, they will undoubtedly gain a deeper, more nuanced understanding of economic inequality and our endeavours to overcome it.

Butler begins the book by questioning the narrative itself – the veracity of the claims made about the prevalence and severity of economic inequality in the world. The shocking statistics on economic inequality we so frequently hear in the popular media are misleading, to say the least. Butler points out that these claims are based on pre-tax incomes which are taxed much higher than the poor segment of the population and do not include the state-sponsored benefits that are mainly utilized by the poor. What people get to consume ultimately is much more equal, he argues.

A more compelling argument he makes is the fact that people’s economic status changes over their lifetime. People in general get wealthier as they progress through life and accumulate more savings and investments. He argues that inequality statistics usually present a panoramic snapshot and do not represent the full picture. Therefore, it would be unfair to economically compare the people at different stages of life. Furthermore, economic indicators often fail to encompass the multitude of factors that contribute to overall quality of life, nor do they adequately capture the crucial influence of individuals’ preferences on their income levels. It is not uncommon to find people who opt for economically less rewarding jobs in favor of more leisure time or more flexibility. Neither is it rare to find people who sacrifice these other rewards in life in pursuit of higher earnings. Some people prioritize immediate higher earnings, forgoing future opportunities for higher income (e.g. those who forgo college) whereas others would rather sacrifice present earnings to ensure higher future earnings (e.g. individuals who go to college or acquire training). To put it succinctly, people make different choices based on their preferences, which has a bearing on their income level. The equality advocates seldom acknowledge this factor.

Butler then goes on to question the accuracy of income measurements including the Lorenz Curve and Gini Coefficient, noting their high sensitivity to outliers in the data. He also points out that ratios such as the Gini Coefficient and Palma Ratio do not provide a clear understanding of the precise nature of the inequalities within a country. He therefore reminds the readers that economists generally quote Gini Coefficients based on post-tax disposable income and warns them to be wary of activists quoting the pre-tax Gini Coefficients. Additionally, the wealth calculations, especially in the developed economies with welfare states, are distorted because they do not account for the value of state benefits and services, and these constitute a significant component of personal wealth.

Moreover, Butler delves into the question of inter-country inequality, highlighting that capital accumulation is a time-consuming and arduous process. He points out that today’s developed countries took more than two centuries of capital accumulation to reach their current status. Therefore, rather than trying to equalize countries, it is better to help the developing countries accelerate their capital-building process, he suggests. Along the way, Butler also responds to the French economist Thomas Piketty’s claim that economic inequality tends to increase over time, especially when the rate of return on capital exceeds the rate of economic growth, leading to a concentration of wealth among the already wealthy.

This idea, which was central to his widely popular book “Capital in the Twenty-First Century”, garnered significant attention upon its publication in 2013. Piketty argued in his book that it is only because of wars which dissipate the accumulated wealth that the capitalists have not been able to capture the world’s entire wealth. Butler counters this argument by emphasizing that managing and ensuring returns to capital is not an automatic process and the outcome of such an undertaking is far from certain.

The capital has to be carefully created, managed, and invested for it to grow, and the owner of the capital could fail at any stage of the process, potentially leading to its depletion. Similarly, there is also no guarantee that the heirs of an individual who has accumulated certain capital will succeed in maintaining or growing it. Butler refers to the findings of a study by Robert Arnott, the investor and writer, and his team, revealing that only half of inherited family wealth is sustained beyond a decade. In Nepal, too, while there are stories of generational wealth persisting and keeping certain families exceedingly rich, it is also quite common to find examples of family wealth being squandered by the heirs.

These are just a few of the claims that Butler debunks in his book. Besides these, Butler also refutes the assertions that inequality is linked to various other social problems such as lower life expectancy, poor education, mental illness, obesity, and political instability. Additionally, he challenges the notion that wealth accumulation is a zero-sum game, that open economies and free markets necessarily lead to higher economic inequality, that poverty has increased in the past three decades and so on.

Two of his major arguments, however, merit further discussion here. First, should economic inequality be our concern as long as everyone is getting richer or as long as everyone has enough? Butler poses a question that is at the core of his book’s message – what if we could instantly double the wealth of the world’s poor, even if it meant doubling the wealth of the rich people as well? Wouldn’t that be a preferable scenario? Yet from the perspective of current economic equality advocates, a scenario where both of these groups of people are poorer but more equal would be more desirable. Then this begs the question – is our crusade against economic inequality primarily driven by an envy of the rich rather than a concern for the poor? Moving on to the second major argument of the book, most of the solutions proposed by equality advocates are government-oriented i.e., more regulation, expansion of the government’s role in the economy, expansion of the tax regime, expansion of the welfare state, more government control of the economy, etc. However, as Butler points out in many cases, it is the government that is the problem.

Government action is behind many of the inequalities that exist. Examples include regulations that favor the larger businesses, regulations that create hurdles for entry of the new actors in a market, regulations that prevent the increase in the supply of products and services which could lower the cost for the poor, high inflation, corruption, and burdensome regulations that prevent the poor from engaging in entrepreneurial activities. Butler provides the example of housing regulations in the UK that have restricted the supply of new houses, driving up rents and making the lives of people, especially the poor, more difficult. In Nepal’s case, we see the government promoting or aiding corporate monopolies in various sectors of the economy. In such a scenario, asking for government solutions to address inequality is essentially asking to concentrate the power in the hands of a select few politicians and bureaucrats who are likely to be influenced or controlled by the largest corporations. Therefore, Butler argues that as a society we should aspire for economic mobility rather than economic equality. We should be more focused on ensuring that everyone has enough – not that everyone has an equal amount.

In “An Introduction to Economic Inequality”, author Eamonn Butler has attempted to create a short but very comprehensive rebuttal to the major claims made by the economic equality advocates. The book’s strength lies in the author’s ability to address all the major claims in favor of economic equality despite it being a short book. Additionally, the inclusion of some real-life examples has bolstered the arguments presented in the book. However, while Butler adeptly outlines the complexities of economic inequality, some readers may find his analysis lacking depth. The book covers a broad range of topics within a relatively short span, sacrificing depth for breadth. As a result, certain aspects of the issue may feel underexplored, leaving readers craving more detailed analysis and discussion.

Furthermore, some of Butler’s arguments appear superficial and weak. For example, he struggles to present a convincing case against initiatives aimed at ensuring equality of opportunity. His reliance on the anecdote of a few immigrants succeeding against the odds only proves the exception rather than the rule. The overall book lacks comprehensive solutions. While proposed free-market solutions and limited government interventions could be major components of a solution, they may not be sufficient. Critical readers, especially those who have been inundated with the inequality narrative, are unlikely to be persuaded without further elaboration and examples demonstrating how the free market would effectively address the problem.

Nevertheless, Eammon Butler’s “An Introduction to Economic Inequality” serves as a valuable primer for anyone seeking to understand the complexities of this pervasive societal issue. Butler’s accessible writing style and the integration of real-world examples make the book an engaging and informative read. For anyone curious to hear the alternative viewpoints on the prevailing economic equality narrative, this is the perfect starting point.

-Surath Giri

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One Day in the Life of Comrade Aakrosh: A Short Story

One Day in the Life of Comrade Aakrosh: A Short Story

  April 09, 2022    Surath Giri

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 (This short story of mine was shortlisted as one of the top 7 stories out of the 175 submissions in the 2021 edition of the Writing Nepal: A Short Story Contest.)

Comrade Aakrosh sighed, crumpled the paper in his hand, and threw it into a small carton box he had been using as the dustbin. His annoyance was gradually morphing into a seething rage.

The speech he had been trying to write since the morning was of utmost importance. It was the first formal event of the combatants after the peace agreement, where the party supremo was also attending. Aakrosh was determined to make an impression with the party supremo. Moreover, he wanted to rouse his comrades with his speech and let them know that the days of struggle had not ended just yet. An even more arduous struggle was ahead of them, and they should not lay down their arms and rest on their laurels just yet.

The prospect of an elongated struggle, albeit in a new form, did not bother comrade Aakrosh. What did bother him though was the form of struggle – all the nuances and intricacies of bourgeoisie politics. All the lies, prevarications, manipulations, bickering, and backstabbing he was sure was going to take a toll on the spirit of honourable, straightforward people like him and his fellow combatants. He wished things were as straightforward as they were during the glorious war.  

As he peered out of the window to an overcast sky, his thoughts rambled to the good old days of the glorious war.

***

Comrade Aakrosh’s reputation preceded him in the party. He was as known for his ruthlessness as he was for his loyalty to the party and, therefore, the cause. His loyalty and uprightness were as fearsome as his ruthlessness. He was not a man you messed with or shared your moral deviations with. For him, killing the enemies of the cause was a moral duty and hardly an inconvenience. None of his killings had bothered him, except perhaps the killing of Gyanendra, the journalist. A killing that had sent shockwaves across the party and cemented his reputation for ruthlessness. Comrade Aakrosh almost wished that things had transpired differently that day.

***

‘Journalist babu! Oh, journalist babu!’ the neighbour lady called out from the roof of the adjoining house in the direction of Aakrosh’s room, bringing him out of his trance.

‘Yes, didi,’ he shouted.

‘It looks like it will rain today. You might want to take your clothes inside, she shouted, peering down at the window, trying to get a view of Comrade Aakrosh. Although it had been several months since ‘journalist Aakash’ moved to the neighbourhood, he remained a mystery to her. He did not exactly rebuff her approaches to know him better, but deftly manoeuvred away her questions every time she posed them. For a curious creature like her, ‘journalist Aakash’ was becoming a greater mystery every passing day, heightening her desire to solve it.

‘Don’t worry didi, I will take them down in a while,’ he shouted in her direction and returned to his thoughts.

***

Gyanendra had been a different captive. Comrade Aakrosh had captured, tortured, and killed many enemies before, several of them being journalists. But Gyanendra was different. To the dismay of his kidnappers, Gyanendra provided no resistance when he got buttonholed at his home and realized that there was no escape. Neither did he complain nor beg for his life throughout the six-hour long excruciating walk from his village to the rebel stronghold.

When finally presented before Comrade Aakrosh to decide on his fate, he had shown no fear or hatred. Just a calm, Stoic indifference. He had confessed that he had indeed informed the army of the whereabouts of the rebels.

What infuriated Comrade Aakrosh was the confidence and moral uprightness with which he had confessed. It had sounded more like a declaration than a confession. While his convictions fueled him, convictions in his enemies were unnerving to Comrade Aakrosh.

Comrade Aakrosh’s fury had not totally subsided the next day as they left the village, with Gyanendra’s dead body tied to a volleyball pole and his head barely hanging on a half-chopped neck, with a note that warned the villagers not to touch the body and to take it as a lesson not to spy for the enemies of the revolution. A pin badge with Mao Zedong’s picture and his quote ‘All political power comes from the barrel of the gun’ adorned Gyanendra’s pocket as he lay on a pool of his own blood. But this personal gesture Comrade Aakrosh performed on all his slain enemies seemed so tasteless that day.

Had it not been for the remnants of the bitterness in him that day, the teacher’s life in the next village would probably have been spared, Comrade Aakrosh ruminated. 

***

A knock on the door brought him out of his trance. Who could it be? He wondered. No comrade was supposed to meet him today. And there were only a handful of comrades who knew where he was living. The knock persisted.

Am I in danger? Is someone coming to attack me? Thoughts rushed into his head. But then, he thought to himself, the war was over already with the signing of the peace agreement. The party was on its way to rule the country. Who had he to fear except maybe a vengeful widow or an orphan he had created? He laughed silently at the frivolousness of his thoughts.

The knock came once again. It must be the nosy neighbour lady, he thought. People minding other people’s business had been a source of all his woes, he remembered.

There was a gap of silence before the knocks resumed. Reluctantly, Comrade Aakrosh walked to the door and opened it slowly. On seeing his visitor, he was startled at first, but then amused and pleasantly surprised.

***

Gyanendra’s gruesome killing had probably struck terror in the hearts and minds of the villagers. The village would probably not see any more spies against the party. But instead of jubilation, Comrade Aakrosh felt defeated. Defeated by the conviction, Gyanendra held. Disappointed by his failure to make Gyanendra beg for his life, denounce the wrong path he had chosen.

As his squadron moved to the next village with an arduous march for the next three nights, Comrade Aakrosh’s disappointment turned into a seething rage. He was unable to shake it off his mind, no matter how hard he tried.

***

‘Sheela, you?’ Comrade Aakrosh exclaimed with disbelief. ‘How come you are here?’

‘Yeah, it’s me, Sheela. Won’t you let me in?’ Sheela replied with a hint of playfulness in her voice.

‘Of course, sure, come in!’ Comrade Aakrosh replied meekly, still unsure how she found him.

Draped in a bland green saree, Sheela looked as beautiful as she did in her college days, as captivating as Comrade Aakrosh found her when they were in love. Now, however, a hint of what seemed like a permanent sadness ran over her face that was only noticeable when one observed her closely.

‘I will prepare tea for us,’ Comrade Aakrosh said.

‘No, don’t bother. I will do that. Just show me where the stuff is,’ she replied.

‘Come on! You are my guest and, besides, it should not be only women’s duty to cook,’ Comrade Aakrosh replied. ‘While I prepare the tea, you tell me how you found me, how you have been all these years.’

‘I stumbled upon Rajeev, our classmate from our college days, or Comrade Raktim as you guys call him these days, she replied, as she sat on the bed near the chair Comrade Aakrosh was sitting on earlier. ‘He told me you were in town and gave me your address.’

‘Oh, I see,’ Comrade Aakrosh remarked, as he looked at the boiling water and threw some tea leaves into it.

Comrade Aakrosh poured the tea into two cups, brought them to the table and sat on the chair. ‘Here you are! I would like to believe that I still make as good tea as I used to during our college days,’ he said. ‘Remember, you used to be a fan of the tea prepared by me.’

Sheela said nothing while she silently sipped her cup of tea.

‘It might have been so because we were in love,’ Comrade Aakrosh said with a hint of sarcasm.

Sheela seemed to be startled at the remark. ‘No! No! It’s still delicious,’ she said, as she tried to smile.

‘So how is your husband? Did you guys have any kids yet? I hope you are happy!’ Comrade Aakrosh asked impatiently.

‘I have a son, Adarsha,’ she replied. ‘Pradeep is not with us,’ she sighed.

‘Oh!’

Sheela quietly sipped her tea, lost in thoughts.

***

 Sheela did not have much to complain about her conjugal life. Pragmatism had triumphed over the romantic aspirations of Sheela as she and Aakash broke up. So she had said yes to the marriage proposal from Pradeep. Although the wounds from the break up were still fresh and the scars would probably never heal, she agreed to meet with Pradeep and found him to be affable enough. Pradeep was a government teacher who was posted across the country to teach social studies to secondary level students. A man of great intellect but few words, romantic gestures were not Pradeep’s forte. But he was loyal and did not need much to be happy. Although it was a marriage borne out of pragmatism for Sheela, she quickly learned to love Pradeep for all his simplicity and loyalty.

Their eventless life was disrupted by only two events – the birth of their son Adarsha and Pradeep’s acceptance of the government’s order to be posted in a school in a remote village in Sankhuwasabha. The latter brought much discord between the husband and the wife but Pradeep had finally convinced Sheela to move to the village, telling her it was the right thing to do and more importantly, just a temporary move. She would not notice the time passing before it was time to return to an urban area, he had told her.

***

‘So, after all it turns out loyalty is very important, eh, Sheela? Who would have thought the guy would leave you, eh? A guy you barely knew when you married him.’

Comrade Aakrosh’s sarcastic remarks brought Sheela out of her rumination. Her face distorted as she tried to contain her indignation.

‘But isn’t the main question where your loyalties lie rather than whether you are loyal or not, Aakash,’ Sheela retorted.

‘Wasn’t it you who put the party above our relationship?’ she asked, staring into his eyes. ‘Wasn’t it you who was all too eager to sacrifice our relationship for your loyalty to the revolution?’

Comrade Aakrosh was at a loss for words. ‘But…’ he muttered.

‘But Sheela, I had told you it was just a matter of patience, hadn’t I? I told you our revolution would succeed, didn’t I?’ he said, regaining his composure. ‘All you needed was to believe in me, Sheela. Look at me now, I am all set to change the face of this nation and go down in history as one of the comrades who liberated his people.’

‘Loyalty is indeed very important, Aakash. But is loyalty to the revolution above everything else? Can’t people put their family above everything else?’ she asked.

‘That’s how the unenlightened proletariat thinks, Sheela. They can’t think beyond their own immediate self-interest and their narrow relations such as their families.’

‘What did this guy Pradeep do anyway? I never got a chance to meet him.’

‘He was a teacher, a government school teacher. He used to teach social studies.’

‘Oh, I see!’

‘You must have tortured and killed a lot of them, didn’t you?’ she remarked acerbically.

‘I am not a soulless killer, Sheela. You know that,’ Comrade Aakrosh looked hurt. ‘But for the cause, I had to kill a few of them. They were spying for the feudal, oppressive, bourgeois king’s army, you see. Some of them were portraying the revolution and us in a negative light in their bourgeois curriculum.’

***

The teacher was not supposed to be killed. He had been sympathetic to the revolution and was paying his dues regularly albeit reluctantly. Despite his sympathies for the cause, he was vehemently opposed to the violence. He had been teaching his students how wrong the way of the violence was despite the justifiable ends it intended to achieve. ‘Violence begets violence, my dear students. Once you believe in taking the shortcut of violence rather than persuasion, it is a slippery slope from there,’ he used to tell his students. The party had ordered Comrade Aakrosh to warn the teacher, as it had been receiving complaints from some of the students who were members of the party.

To the chagrin of Comrade Aakrosh, the teacher repeated the same arguments when presented before him and refused to take the warning. Comrade Aakrosh was in no mood to hear his arguments or be convinced. How come everyone has started opposing us? He thought with annoyance. First that journalist and now this teacher? The bourgeois accomplices have now started teaching us how to run our revolution.

As his seething rage refused to calm down, Comrade Aakrosh decided to teach this teacher a lesson which would serve as a lesson to all the critics of the revolution and its modus operandi.

Comrade Aakrosh’s anger finally subsided when he pinned the badge with Mao’s picture and his quote to the shirt of the teacher, as his dead body drooped from the volleyball pole in the school ground to which both his hands were tied. As the pool of blood flowing from his slit throat turned black, Comrade Aakrosh’s spirits lifted. He felt relieved and accomplished. But how was he to know that the events of that day would come back to haunt him for a long time?

***

Sheela felt the earth move when she heard of Pradeep’s gruesome death at the hands of the rebels. She felt everything spin around her and struggled to find a footing. She fainted. She had barely slept the night before while she waited for Pradeep to come back. Although she knew he was a supporter of the rebels and was unlikely to be harmed by them, a part of her feared for his well-being every time he went to meet the rebels. The meetings were few and far between and each time Pradeep had come back unharmed. How could she believe that he had been killed gruesomely?

When she came back to consciousness, she found herself surrounded by the villagers. They refused to let her go to the site where Pradeep had been killed and where his body still remained, as the rebels had warned the villagers not to touch it or remove it. She acquiesced but remained adamant in her heart to visit the site. It is the fearsome Comrade Aakrosh who must have done it, the villagers whispered.

As the day passed and the urgency to dispose of the dead body increased, the fear of the rebels subsided and the villagers started the final rites for Pradeep.

Sheela accompanied them adamantly and refused to be left behind. As the villagers cut down the ropes and put the mangled body into a shroud, Sheela reached out to the body and snatched off the badge with Mao’s picture pinned to Pradeep’s shirt.

***

The sound of a lightning strike startled both of them and brought them out of their reverie. It started to rain.

‘Journalist babu! Oh, journalist babu!’ the neighbor lady shouted again in the direction of Comrade Aakrosh’s room. ‘It’s raining. Do take your clothes inside. I had warned you earlier.’

Comrade Aakrosh rushed to the roof. He bundled his clothes in his arms and turned back to go down to his room.

‘Babu, what were you doing? I had warned you earlier. Were you busy? Do you have a visitor?’ the neighbor lady inquired.

‘Nothing as such. I was reading a book and lost my sense of time. That’s all,’ he replied quickly and rushed downstairs.

In the room Comrade Aakrosh found Sheela refilling their cups with tea she had just prepared.

‘It was my turn to prepare the tea,’ she said with a smile.

‘Thank you, Sheela,’ Comrade Aakrosh replied.

He started spreading the clothes on his bed to dry them. Some of his shirts had been soaked.

‘I see you still prefer the color red,’ Sheela remarked. ‘What’s that badge that you have on that red shirt?’

‘Oh, it’s nothing. Just a pin badge to showcase my loyalty to the revolution. I had them specially prepared for me,’ Comrade Aakrosh replied. ‘Want one?’

‘Sure!’

Sheela’s fingers trembled as she ran them over the straight-faced Mao and his quote on the badge.

***

As soon as he finished his cup of tea, Comrade Aakrosh started feeling dizzy. He felt a strong desire to lie down and sleep. He mustered his will power to fight the urge but failed. He fell asleep.

When he woke a while later, he found his hands behind his back and tied to the bedpost. He was still feeling dizzy and was barely conscious. He squinted his eyes to make out the face of Sheela peering over him. A stiletto glinted in her hand.

‘Why, Sheela?’ he managed to blurt out.

‘Loyalty, Aakash aka Comrade Aakrosh! Loyalty!’ Sheela said in a steely voice. ‘Remember the teacher that you partially beheaded in Sankhuwasabha?’

A whiff of regret passed through Comrade Aakrosh’s mind as Sheela slit his throat.

***

‘Journalist babu! Oh, journalist babu! The sun is up again,’ the neighbor lady shouted towards Comrade Aakrosh’s room. ‘You might want to bring the clothes up to dry them.’

‘The sun is up again’ was the last thought that crossed Comrade Aakrosh’s mind before he closed his eyes forever.

The End

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The Nepali Economist Podcast: Episode 10: Where did the Poor's 9.3 Trillion Dollars Go?

The Nepali Economist Podcast: Episode 10: Where did the Poor's 9.3 Trillion Dollars Go?

  October 22, 2021    Surath Giri

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Dear listeners,

"Where did the 9.3 trillion dollars of the world's poor go?"

 

This is the question I discuss in the tenth episode of the Nepali Economist and try to find an answer to it with the help of Peruvian economist Hernando De Soto once again whose work we had discussed in the last episode.

 

Happy listening!

Please do not forget to send me your feedback and comments. You can mail me at nepalieconomist (@) gmail.com to send your messages.

You can listen to the tenth episode here:

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Reframing Our Youth Employment Problem

Reframing Our Youth Employment Problem

  August 01, 2021    Surath Giri

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Photo by Phil DuFrene on Unsplash

As the nation grapples with the second wave of the COVID-19 pandemic, its ramifications go beyond its immediate public health impact. Health restrictions inevitable to mitigate the spread of COVID-19 have been detrimental to the economy, and are likely to have exacerbated Nepal’s seemingly perennial youth employment problem.

Youth account for about 40 percent of the 20.7 million working age population, and have an unemployment rate higher than the national average of 11.4 percent. Unpacking segments within youth  shows us that the 15-24 segment faces specific problems, with the highest rate of unemployment, and informal employment compared to other groups. Perhaps more worryingly, 35.3 percent of 15–24-year-olds were at the risk of social exclusion. The picture changes slightly as we move out from 15-24 to the 25-39 age bracket, which reports one of the highest underemployment rates across segments. This is not surprising given that majority of jobs created over the last decade (2008-2018) were casual or  short term work. The ongoing youth employment challenges have led to outcomes including, among others things, labour migration out of the country. According to the Department of Foreign Employment, labour approvals in FY 2019/19 stood at 236,208, with the volume to India conservatively expected a few times more than this number. 

The COVID-19 pandemic is expected to make things worse. Around 1.6 million jobs were disrupted in just the first phase of the pandemic, with the young casual and informal workers predominately bearing the brunt of the unemployment impact. The crux of the COVID-19 employment impact lies in underemployment, which globally has contributed more to estimated job losses (in work hours) than unemployment and whose impact is potentially longer term. Given our pre-existing problem of underemployment, especially among youth in the 25-39 age group, this represents an unprecedented employment challenge considering that we are right in the middle of our demographic dividend. The current challenge will unlikely be overcome by our economy in its current state, as we know businesses even in May 2021 were still not operating at pre-COVID-19 levels with important sectors like tourism and hospitality not expected to return to normalcy anytime soon.

Government response to the youth employment challenge has largely been programmatic in the years leading up to and during the COVID-19 pandemic. The Youth Self-Employment Fund, for instance, has been able to create around 78,000 self-employed youths in its total 12 years of existence (around 6,500 annually). While commendable, it barely makes a dent when an estimated 400,000 enter the labor force each year. In any case, programs like these, although beneficial, are not an adequate response to a youth employment challenge that has been exacerbated by COVID-19.

With this impending crisis in mind, it is imperative that we start to address structural barriers to improve the enabling environment for decent job creation. Systemic change is a difficult matter with various components that need to be  addressed in parallel, however in our view the following two areas might offer a good starting point.

First of all, there is no comparable alternative to entrepreneurship for job creation and economic growth. Encouraging entrepreneurship has been a government priority with commendable measures even in the recent budget, for example, to promote startups. The gap lies in the approach, which has largely been piecemeal, rather we need a coherent holistic approach for enterprise promotion if we are to achieve systems change for domestic youth employment that we desire.

A holistic approach entails allowing the conceptual space for innovative firms and business models to develop, and grow. A case in point are ride-sharing businesses whose development in Nepal was hampered by regulatory hurdles, and who remain in limbo even after years. However, policy incentives and entrepreneurship support must be delivered in a manner that employment created is ‘decent’. Without this, it seems likely that the predominance of casual employment, and its resultant decent work deficits, will continue onwards into the next decade as well.

Linked to the idea of holistic approach is the need for mindset change. The prevalent narrative seems to equate entrepreneurship largely with youth. However, in a job supply starved economy like ours, we should aim to promote entrepreneurship from every segment of the population. Globally, successful youth entrepreneurs seem to be an exception rather than the norm, with the average age of successful entrepreneurs being 45. That does not mean that we undermine the importance of youth entrepreneurship, especially given their accepted importance in building startups that fuel innovation. What it does entail is promoting entrepreneurship from all ages as an important source of wage employment creation, which can then chip away at our overall youth employment challenge.

Secondly, an issue that almost always comes up with any discussions of the private sector or the policymakers on employment is the mismatch between the available labor and the employment opportunities. Youth often complain about the lack of employment opportunities, while employers often complain that they are unable to find the right employees for vacant jobs. Large scale regularly updated labour market data is the key to better linking labour demand to supply.

Public agencies are an ideal mechanism to collect this data, which has actually been envisioned but not yet put into practice by the Prime Minister’s Employment Programme (PMEP). Once the data starts to flow in, big data analysis can allow for matching demand and supply at the granular level. What this means is that we can go deeper to say look at what specific competencies offered by job seekers are in higher demand among employers across Nepal.  This in turn can help better identify targeted measures for particular segments, for example women and youth from disadvantaged groups that suffer additional barriers to formal employment.

The following regular projections on new employment opportunities and  remuneration levels can then be used to help students and the academia better plan for entry into the labour market. It can be used to also make vocational training more demand oriented, which could in turn ease school to work transition and movement to formal employment  for the 15-24 age group.

These suggested ideas ultimately require a sustained national commitment to establishing a technically competent public employment system. This can further be supported by the coherent integrated policy measures we have talked about above, especially if we are to incentivize our youth to move from their existing concentration on low skilled segments to the demand of medium and higher skilled segments.

The COVID-19 pandemic has given us an opportunity to rethink our perennial problem and make significant strides towards solving it. It would be a precious opportunity wasted if we consider it business as usual.

-Surath Giri & Saurabh Shah

The authors are associated with Global Shapers Kathmandu Hub, a part of Global Shapers Community initiated by the World Economic Forum.

(Originally published on Republica daily on July 15, 2021)

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Policy Reforms for Startups in Nepal

Policy Reforms for Startups in Nepal

  May 30, 2021    Surath Giri

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Photo courtesy: Helena Lopes (Pexels)

 

Startups have not only piqued the interest of the policymakers but have also captured the imagination of the Nepali youth. They are, however, fraught with risks and more often than not, fail. For example, in the USA, studies have found that over 90% of startups eventually fail. Around 21.5% of the startups fail within their first year. By the fifth year, half of all the startups are gone. The numbers are likely to be similar in Nepal.

In Nepal, in addition to the usual risks and uncertainties, startups also face severe regulatory hurdles that make their battle for survival even more precarious. Although creating a favorable environment for startups and entrepreneurship, in general, is a continuous and never-ending process, there are certain steps the government can take immediately to make life easier for novice entrepreneurs.

First, the policymakers need to change their perception that startups are only for well-educated and privileged people. This perception seems to have arisen partly because generally startups are associated with the information technology sector. If startups are to bring about a broader and more equitable economic change, then they must be accessible to the man in the street. What may seem like a very easy regulatory requirement for a person with access may actually be an insurmountable or a very costly obligation.  For instance, spending around two weeks and tens of thousands of rupees for company registration may not mean much to a city resident belonging to the middle class or upper class. The same provision may be highly discouraging to an aspiring entrepreneur without the means and the access.

Therefore, our policymakers must work towards streamlining the regulatory obligations during the registration, operation, and closure of the startups. After having to overcome huge red tapes while registering their business or having to pay thousands of rupees to a lawyer, the entrepreneurs tend to think that they are done with the regulatory obligations and now can focus on their energy on their business. This has led to many startups to default on the various regulatory obligations they are supposed to perform after starting the operation of their venture. They end up paying tens of thousands or even hundreds of thousands of rupees as fines to the Office of the Company Registrar. One can hardly meet a first-time entrepreneur who has not paid such fines, sometimes even to the detriment of their venture. The initial days of the startups are so full of uncertainty and the entrepreneurs are so occupied with ensuring their venture's survival that it is unreasonable to expect them to be making rounds of government offices rather than focusing on their venture.

The hoops startups are made to jump through while registering their businesses are, however, plain sailing compared to the hoops they have to jump through while shutting down the venture if it fails. If the startups follow the legal provisions to the letter, they can expect to spend years and tens of thousands of rupees just to shut down their company. This not only drains the energy of the entrepreneur, keeping her stuck and preventing her from engaging in a better idea or venture, but it also discourages entrepreneurs from actually starting companies. A difficult exit also means that the assets remain stuck in unproductive sectors rather than swiftly being transferred to more efficient sectors.

The government should streamline the exit process for the startups, more so for the startups that did not commence their commercial operations or whose operations got terminated early. Only about one-third of the total registered companies are estimated to be in operation currently. The need for a more streamlined exit process is currently more than ever as lots of startups and even well-established ventures are shutting down due to the COVID-19 pandemic. The government was headed in the right direction with the Companies (First Amendment) Act, 2074 (2017)  which had made a provision allowing companies that have been inoperative for years to shut down after paying a fee equivalent to 0.5 percent of their paid-up capital to the government. The provision was, however, made available only for two years since the commencement of the amended Act and made available to only companies that have not commenced business. The provision should be made available for an indefinite period and be extended to all companies.

For startups that succeed to survive and grow, the regulatory hurdle comes in the form of restrictions on foreign direct investment. The minimum floor of half a million dollars set by the government for foreign direct investment (FDI) has proved to be a huge obstacle for growth-oriented startups who are seeking not just the money but also the international networks and technology. Although Nepali startups are well-ready to take international investments and explore the international markets, the minimum floor of half a million dollars has meant that only a very few, if any, startups have been able to exploit the opportunity. All the investments below half a million dollars that could have helped the startups realize their national and international potential are simply denied to them. FDI is not just about money, it is also about the international networks and technologies. Because of this provision, the startups are having to rely on established Nepali investors with whom many of the startups are actually competing against which has the unintended consequence of enabling the same old faces, same old investors to control their would-be competitors and thereby making the economy the hostage of the same old business houses and investors. The often-cited reason for the minimum floor on FDI is to prevent the misuse of business visas by some foreigners who use FDI to get the visa and then engage in unwanted or outright illegal activities. This is, however, more a security issue rather than an issue of FDI. The government could simply remove the provision or come up with other monitoring and security measures to control such activities.

For innovative startups, the sword of "lack of policy/regulation framework" keeps hanging over their head. It is not just in Nepal where the policymakers and the regulations are trying to catch up with the rapid changes in the business models and technologies. However, Nepal is among the few places where such lack of policy framework is being used to kill the startups or at least prevent them from growing and keeping them in limbo. For instance, even after a huge controversy over ride-sharing services, all the government has done is a makeshift arrangement without actually providing the legal framework even after years. This has kept promising startups like Tootle/Pathao in constant uncertainty about their future. It is anyone's guess when the policy framework will be developed or when this issue will be the priority of our lawmakers. The government should develop a separate entity or legal framework governing such innovative startups before it is too late, and we lag too far behind the world which we already are to some extent.

-Surath Giri

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The Nepali Economist Podcast: Episode 09: The Other Path to Prosperity

The Nepali Economist Podcast: Episode 09: The Other Path to Prosperity

  May 27, 2021    Surath Giri

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Dear listeners,

Sorry about the long, long gap after the eighth episode. I finally welcome you to the ninth episode of The Nepali Economist. In this episode, I bring you the story of Peruvian economist Hernando De Soto who sought an alternative path to prosperity for the poor people in Peru and then the rest of the world. How did De Soto find the alternative path and what impact did his findings have on the developing countries around the world? Listen to find out!

Please do not forget to send me your feedback and comments. You can mail me at nepalieconomist (@) gmail.com to send your messages.

You can listen to the ninth episode here:

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