Dec 13, 2011

Occupy Wall Street movement: Good Capitalism, Bad Capitalism


Image Source: watchdocumentary.tv
Occupy Wall Street movement which started as a series of demonstrations in New York City based in Zuccotti Park in the Wall Street financial district has gained worldwide momentum. Over 900 major cities of the world are reported to be buzzing with replica protests of Occupy Wall Street currently. Nepal didn’t remain untouched by the wave. Nepalese intellectuals paid their tribute in their usual way, declaring it an end of capitalism, blaming capitalism for anything and everything that has gone wrong in this country and calling for similar protests. 

The shallowness of their understanding is evident by the way every major disturbances in the West is heralded as the ultimate endpoint of capitalism, and a vague alternative system promising utopia is promised. It is very unfortunate that while spewing hairsplitting criticisms of capitalism most usually the income inequality, critics forget to acknowledge that capitalism as compared to every other political and economic system so far known is better at creating wealth and lifting millions of people out of abject poverty. It is surprising that advocates of social justice and equitable distribution of wealth find that capitalism is the only system that creates enormous wealth, so indigestible. To understand the Occupy Wall Street movement objectively and its relevance to Nepal, it is necessary to understand what exactly gave rise to the protests and also that, rather than a monolithic form as described by its critics, capitalism has different forms. It is imperative to understand that there is good capitalism and bad capitalism, and the distinction between them is the first step towards solving the aforementioned problems.

Crony capitalism, which is the form of capitalism where wealthy corporations and politicians tie up in a “you-scratch-my-back-I scratch-yours” fashion to abuse power and wealth for each other’s vested interests, is bad and is one of the true causes of discontent among the protesters. Two of the major issues raised in the Occupy Wall Street movement are bailing-out failing banks with the taxpayers’ money and rising income disparity among the citizens. If one digs deeper, both of these are results of crony capitalism. The banks having close ties with the politicians are rescued with the taxpayers’ money instead of letting them face the consequences of their mistakes. Similarly, income disparities rise because of governments providing special privileges to those wealthy corporations through various means such as subsidies, tax-rebates, special licenses, and favorable policies.

Free market capitalism that rewards entrepreneurship, risk-taking and innovation, and at the same time provides easy universal access to economic activities to all citizens is a blessing. There are enough evidences that when allowed to work, the market has lifted more people out of the mud and misery of poverty than any government. And it has been true regardless of the culture, tradition, religion, economic base, and civilization of the society practicing it. The most prevalent myth about free market capitalism in Nepal is that in free market capitalism the economy is dominated by cartels and syndicates. 

Source: Facebook
Whatever little degree of capitalism Nepal has practiced so far has been riddled with practices of crony capitalism. The majority of the wealthy class of Nepal were either born rich or became so by political and bureaucratic connections. Why do few business houses thrive whereas majority of the populace languishes in poverty? Why do few industrialists dominate the economy? Not because they provide quality goods and services to satisfy the customers but because they happen to have political and bureaucratic connections. License permit regime has been a key factor in sustaining and fostering the close ties between politicians and businessmen. The few people who supposedly control the majority of the wealth of the nation do so because they are politically powerful and well-connected. But, despite this, there are also entrepreneurs in Nepal who came from a humble background and made a fortune by providing goods and services to the hundreds of thousands of satisfied customers. If we criticize capitalism blindly, we are also criticizing these people who risked everything they had and provided something useful to the society and made fortunes. It would be mere foolishness to criticize these ‘job creators’ for the unemployment problems in the country. Even our neighbors -socialist India and Communist China, who didn’t look at capitalism with favor in the past have embraced it after realizing their folly. It would be a hug mistake for Nepal to take the already abandoned path.

Fights against capitalism have already become the war of the past. Today’s interconnected and globalized world begs for a different fight. A fight to ensure the benefits and privileges of capitalism to even the poorest of the poor. A fight to eliminate close ties between politicians and large corporations and let the markets work freely. The debate for the future is not whether to have capitalism or not, but what kind of capitalism to have- the crony capitalism that plagues the economy of Nepal or a free market capitalism that ensures equal access to economic activities and equal respect of rights of every individual citizen.

-Surath Giri

Dec 12, 2011

The Rise and Fall of Dr. Bhattarai's Popularity and lessons learned


Image Source: Wikimedia

When Dr. Bhattarai was elected the prime minister of the current coalition government, many people breathed a sigh of relief and raised their hopes high. His ardent supporters went crazy with joy and excitement. For a while it seemed Nepal had finally got it's messiah who had cures for all the ills of this nation, who could bring everyone together and get the country on track. Those few who thought it better to control their excitement and contain their expectations were labeled too cynical and pessimists. Some jubilant populace even initiated campaigns demanding the new Prime Minister be allowed to work. When the new Prime Minister decided to use a Nepal assembled Mustang as his vehicle and set a precedent for other politicians to follow the suit, general people’s excitement went up through the ceiling. The trend continued when Dr. Bhattarai declared government relief packages and other several populist moves. However, in the euphoria people forgot few small details, the generosity of PM was solely based on 'Other People's Money' rather than deep convictions for really helping the poor and whether a leader is good or evil has little bearing on a nation's well-being than the system and policies that are in place.

Only when the new PM's cabinet made history by being the largest one till date, designated convicts as ministers and convicted people as ministers and the media started reporting the gross discrepancy between PM's commitments and the reality- were the people shaken out of their illusion. The popularity of PM Bhattarai is declining with the same speed as it rose during early days of his premiership. The ardent and faithful are utterly disappointed, the skeptics are in glee with “I told you so” mood and the vast majority of the populace is as apathetic as ever. So, why did Nepal's “messiah” dash the hopes of so many of his fans? What proved the skeptics right? And how long will the Nepali idiom “Jun Jogi Aaye Pani Kanai Chireko” hold true?

It's the system

Centuries of patronization from the state, short lived experience with democracy, massive poverty and illiteracy resulting in the political discourse being overwhelmingly dominated by political parties and their puppet intellectuals and a decade long bloody communist uprising has turned majority of us into political romanticists. Discourses about development of any field predictably end with “lack of a genuine leader with a vision” and fantasy of a true patriotic leader with cure for all ills of our society is rampant. This person centric approach is confirmed by our interpretation of history too. Nepal's political system has too many heroes or villains rather than values and systems. Nepal's political and social institutions have been predominantly feudalistic in nature which allowed an individual/family/party to wield much influence in the society. Therefore, much of a society's progress has depended upon that leader's whim. In reality, however, the kind of political system a society adopts and the values and norms it upholds are much more instrumental in driving the society forward rather than the goodness or evilness or a political leader.

Dev Shumsher might have been a relatively liberal Rana Prime Minister but his generosity failed to extend beyond his term. King Birendra might have been a generous King but Nepal under his rule was no way better than Nepal under the rule of King Mahendra. The political leaders of parties like Nepali Congress and UML who have become the epitome of ineffective and corrupt leaders now were once the ideal revolutionaries whose sole purpose in life had been the nation's interest. Similarly, Maoists who waged a decade long war in the name of the poor are nowadays in constant controversies ranging from criminal activities to institutional corruption dashing out any hopes that they would provide a better alternative to the major political parties of pre-2006 era. 

International experiences illuminate us more about this principle. Citizens of democratic and liberal countries of Europe and North America can rationally hope that despite of any leader coming into power to be not outrageously corrupt unlike them, citizens of Pakistan and Bangladesh can be pretty much sure about corruption, ineffectiveness and controversies no matter who came into power. Similarly, it is also noteworthy that every country that has ever tried communism found a ruthless dictator who really hated free speech and dissenting views among other things. What chances are there that all the leaders of similar political and economic systems be equally ruthless unless the system itself made them to act that way?

Image Source: Nepalnews
In this context, Nepali citizens would really be better off in the longer run if they placed their hopes on having a good system rather than a good leader and it would be a folly on our part to assume a single leader through his/her personal choice would be able to change the system for better. That said, it is imperative that we venture beyond the usual rhetoric of blaming the system and figure out what actually is wrong with the system. We have had leaders competing with each other to promise us loftier dreams. From transforming Nepal to Switzerland, to making a Singapore out of it to generating 10000 Megawatts of electricity, we have heard it all. However, our political discourse has severely failed to address the “How” part of the question.  There is a dearth of opinion on the “how” part of the question except for some self contradictory ideas regarding the development of the country. On one hand, people are furious over the ineffectiveness and blatant hypocrisy of the political leaders and the ruin their actions have brought to the country whereas on the other hand, the mere suggestion that government should not be extensively involved in the economic activities as well as other aspects of people's lives raises many eyebrows and such suggestions are looked upon with ridicule. Suggesting people that if a nation wants to progress, it is essential to separate the government and the economy as far as possible draws many sighs of disbelief.

Constitution and Prosperity

The constitution is being written and hopefully will be completed this time. The kind of constitution we will have will set a system that will shape the politicians and the political behavior in the future, thereby determining in part what level of prosperity we will achieve. Hence, figuring out the what kind of system do we want to have in country-the one that bequeaths the politicians with extensive power to shape and influence our lives or the one that puts its faith in general people - is the best thing we can do for the sake of the country than getting overzealous about a leader or a political party for that matter.

-Surath Giri

Dec 5, 2011

Flat Tax System for Nepal?

-Surath Giri

About a month ago, Ministry of Finance under the landmark direction by the National Information Commission (NIC) exposed the massive VAT evade scams by the private sector of Nepal. The incident sent out ripples all over the private business community. As in the past, the incident was treated as a vindication that private sector is overwhelmingly fraud and cannot be trusted. Many accusations were hurled at the private sector which compelled major  business houses involved in the scam to rush in to save their ass*s. Amid all the hue and cry, a small fact was overlooked. Almost every business house in Nepal is evading taxes. Casinos, Super Markets, Large Scale Industries, Retailers and almost every significant business that comes within the realm of formal economy of Nepal have been found time and again to evade taxes. So, an interesting question to ask would be "Why does everyone try to evade taxes in Nepal?" 

The most obvious answer you would get if you ask a citizen in Nepal is : "The private sector is corrupt, unpatriotic and too profit-focused." Well, let's put on our thinking cap and venture beyond the usual leftist rhetoric. If they had a choice, I am sure very few Nepalese citizens would willingly pay taxes to fill in the treasury of our corrupt politicians and encourage them to ruin the country even more. Could our overly bureaucratic and unfair progressive taxation system have anything to do with the tax evasion trends?

Doing Business Report states "On average, firms make 34 tax payments a year, spend 326 hours a year filing, preparing and paying taxes and pay total taxes amounting to 17.2% of profit in Nepal" which when compared to other South Asian Countries is a much better situation. But again, with all the numerous reasons for an individual or business not to pay taxes, simplifying the taxation system could surely improve the scenario.  Besides simplifying the procedures, adopting a more fair taxation system (one that doesn't penalize business or individuals for being more productive or working harder) could be beneficial to us.

Many people around the world believe adopting a flat tax system would help mitigate such problems because flat tax system while simplifying the procedures and making it easy for people to understand and pay taxes also makes taxation fair and equal for everyone.  So what is flat tax system?

A flat tax is a fiscal system with only one tax rate for all levels of income (whatever your level of income you just pay a certain percentage of your income as tax and that's all), in which all income is taxed once and only once. Countries around the world, such as Hong Kong, the Channel Islands, Estonia, Lithuania, Latvia, Russia, Serbia, Ukraine and Slovakia have seen remarkable results after adopting flat tax system. Tax evasion has decreased whereas the collection of tax revenues has increased over the longer period of time. Similarly, the total number of hours spent on administering the taxes (which is a very non-productive usage of time) has decreased significantly. Additionally, the low rate of taxes and the equal taxation for everyone has prompted many multinationals to seek solace in countries with flat tax system.





And contrary to what critics of flat tax predicted, countries adopting flat taxes have seen increase in the share of taxes paid by the rich. How? First, taxpayers in the highest brackets shifted money from consumption or tax-sheltered investments into more productive, taxable investments. Second, taxpayers became more honest as evasion became less rewarding. Third, some taxpayers, rewarded by higher after-tax returns, worked harder. (Source: http://bit.ly/vq5aCl )

Hong Kong is one of the famous success stories of flat tax system. It maintains a dual taxation system where taxpayers can choose between a progressive taxation system that ranges fro 2 percent to 20 percent or a flat tax of 16 percent. However, flat taxation has been the most popular choice among the tax payers so far. Notably, the flat tax has generated a high enough level of government revenue such that, between 1950 and 1981, fiscal surpluses have been recorded in no less than 27 years. (Source: http://bit.ly/vq5aCl )

Similarly, Estonia, an ex-communist country has also been successfully implementing the flat tax system with remarkable results which has inspired Russia not only to adopt a similar system but also to compete with the flat taxers with the lowest rates of taxes in Eastern Europe.

Nepal has a flat tax rate of 25 percent for corporations whereas individuals are subject to a progressive taxation system. Despite this, one of the principle of flat taxation: "tax an income only once" is yet to followed in Nepalese scenario.

Note: A paper on flat tax entitled "Flat Tax-The British Case" by Romanian Economist Andrei Grecu can be found at: http://bit.ly/vq5aCl . The paper explains the concept in more details.

Do you think a complete flat tax system would help Nepal minimize its tax evasion woes? Would such system be suitable for Nepal? Why ? Why not? Is the current rate of taxation of 25% too high or just enough? 
Please share your views!

Dec 1, 2011

A new way of looking at Taxes!

Recently when Prime Minister Dr. Baburam Bhattarai announced extensive relief packages, people went gaga over his generosity. The question "Relief packages for what? And who pays for it?" was neither asked nor dealt upon. A few people (including some newspapers) who dared to ask the bitter questions were quickly drowned by the ferocious attacks from Dr. Bhattarai supporters. This tendency, however, is not associated with Dr. Bhattarai only. Any politician promising benefits to people are received with praised and gratitude in Nepal. In this context, I think the following video could present a new way of looking at taxes and government benefits. 


So what do you think about the views presented in the video? Feel free to agree or disagree.

Nov 12, 2011

Youth Employment: Prospects in Nepali Scenario

Yesterday, I presented a paper on "Youth Employment: Prospects in Nepali Scenario" in a program organized by YUWA. Below is the abstract of the paper and the download link to the PDF file.

ABSTRACT

Like every other developing countries of the world, high youth unemployment rates pose a serious threat to stability and economic growth of Nepal. Underemployment is more severe a problem than unemployment in Nepal’s scenario. Due to lack of growth in the country, majority of youth are seeking foreign employment opportunities which has resulted in a significant reduction of absolute poverty rates of the nation and a major source of foreign exchange. The trend, although beneficial in the short run poses a serious threat to long term development of Nepal. Agriculture, tourism, small and cottage industries, information technology and outsourcing and foreign employment itself are the major sectors that have potential to solve the youth unemployment problem. This paper highlights the present situation of these sectors and highlights the growth potential of these sectors to absorb the unemployed mass of youth. The paper concludes by arguing that, if we are serious about solving youth unemployment problem of Nepal, we should focus more on the major sectors of the economy and their growth rather than trying to solve youth unemployment problem through direct government intervention.


Download link: http://bit.ly/vLFq0R

Do let me know if you have any feedback and comments!

Nov 7, 2011

केही लिबेर्टेरियन भनाइहरु -७


  1. केन्द्रिक्रित शक्ती जहिले पनि स्वतन्त्रताको शत्रु हुँदै आएको छ ।  -Ronald Reagan
  2. स्वतन्त्रता बिनाको जीवन आत्मा बिनाको शरीर जस्तै हुन्छ । - Khalil Gibran
  3. कानूनव्यवस्था बिनाको स्वतन्त्रता र स्वतन्त्रता बिनाको कानूनव्यवस्था दुवै उत्तिकै घातक हुन्छन ।  -Theodore Roosevelt
  4. आर्थिक स्वतन्त्रता बिना साँच्चैको स्वतन्त्रता सम्भव छैन । - Margaret Thatcher
  5. कुनै पनि सरकारको मुख्य उदेश्य देशको आत्मारक्षा हो , साम्राज्य बनाउनु होइन । -Joseph Sobran
  6. पूँजीवादको अन्तर्निहित  खराब पक्ष भनेको धनको असमान बितरण हो । तेसै गरी समाजवादको अन्तर्निहित असल पक्ष भनेको गरीबीको समान बितरण हो । -Winston Churchill
  7. अर्थतन्त्रप्रतिको सरकारको धारणालाई केही वाक्यमा समेट्न सकिन्छ : चलिराखेको छ भने कर लगाउ , अझै चलिराख्यो भने नियमन गर । अनी जब चल्न छोड्छ अनुदान दिन थाल । - Ronald Reagan
  8. हामीलाई सरकार चाहिन्छ तर सधैं बाजले सरह तेस्लाई निरिक्षण गरिराख्नु पर्छ । -Millicent Fenwick
  9. जहाँ नैतीकता हुन्छ , त्यहाँ कानून को आवश्यकता नै पर्दैन, जहाँ नैतीकता हुँदैन, त्यहाँ कानून बनाएर पनि काम लाग्दैन ।  -Anonymous
  10. समाजवादीहरु तेस्ता व्यक्ती हुन जो आफुलाई अरु मानिसहरुको ऋणी सम्झन्छन र त्यो ऋण चै सरकारले अर्काको पैसा बाट तिरिदेओस भन्ने चाहन्छन । -Gordon Liddy

Nov 6, 2011

Nepal's Economic Reforms- are there any stakeholders left?


Image Source: http://prarthanag.umwblogs.org
Initiating and sustaining the economic reform process is one of the major challenges being faced by the least developed countries around the world. With globalization permeating every corner of the world, no country can remain impervious to the global trends which change too frequently to be conducive for economic reforms. As evidenced by the experience many countries attempting reforms, reforms rarely enjoy broad public support. Economic reforms are generally initiated by crisis, driven by pressures and sustained by the support of few committed politicians or bureaucrats who feel a stake in the reforms. And it's no wonder that some of the major transformations of economies in the world have been under some forms of dictatorship. From Deng's China to Pinochet's Chile to Thatcher's Britain, economic reforms had to be carried out with an iron fist or as in New Zealand where major political parties has a consensus regarding the reforms. Added to this, political instability and communist uprisings in least developed countries like Nepal push economic reforms to almost impossibility. 

Nepal's brief flirting with liberalization and other economic reforms were thwarted by the Maoist uprising and political infighting within the then ruling party -Nepali Congress which not only undermined the benefits of liberalization but also helped smear the process itself. Post 2006 era has been even more depressing for Nepal's economic reform process. Political agendas have pushed back economic agendas further behind. Political bargaining have pervaded every national issues and economic perspectives on issues are missing. Besides political parties, other supposed stakeholders of the reforms such as private sector, bureaucracy, civil society and even the general public are also too busy in their own affairs to care about them. In this context, it would be interesting to analyze what are these stakeholders doing regarding the process and if there is any real stakeholder left?

Private Sector
As economic reforms bolster private sector through more freedom as well as competition, private sectors have a stake in the economic reforms. Nepal's private sector, however, except for paying lip-service, has contributed very little in pushing economic reforms forward. The anti-competitive practices present across all the sectors of the economy such as syndicates, cartels, collusive agreements not only undermine people's support for private sector but also generates hostility towards governments attempts to allow private sector a greater role in the economy. Nepalese private sector currently too divided and too engaged in crony capitalism, to be excited or supportive about the economic reform process. Status quo ensures the survival and profit of the major actors in private sector which translates into lukewarm, if any, support to economic reform process.

Political Parties
Nepal is yet to see a political party that truly advocates free markets and economic freedom out of principle. Most of the political parties see supporting some aspects of economic freedom as a compromise rather than political agendas. Giving leeway to private sector is seen as a compromise on party principles and generates criticisms from within and outside the party. A look at the top five major political parties of Nepal would present this miserable state. Two of the largest political parties are principally against liberalization and other economic reforms, another two thrive on purely ethnic agendas and haven't yet shown any clear stand or interest on national economic issues. Another one doesn't seem so much happy about the economic reforms it initiated and has once again brought forward  anti-market agendas in its political principles. Nepalese political parties seem to be on a “populist” race where everyone is trying to be more popular at the expense of the economy.

The Bureaucracy
A country's bureaucracy plays a vital role in directing and sustaining the economic reforms as seen by the economic reforms of Indonesia and Singapore. In case like ours where the political leadership doesn't seem to have any stake in economic reforms, bureaucracy's role becomes even more important. Nepalese bureaucracy, however, seems too busy in finding avenues for short-term gains and instant gratifications to have a stake in economic reforms. Very few bureaucrats intend to live in Nepal after their retirements and those who do are either disorganized or busy consulting the development industry.  The higher level bureaucracy which can have a serious impact in the national policies,  is either already too well-off or get so by the time of retirement  and has less incentive to push for the economic reforms.

Civil Society
In the post 2006 era, like every other sector, civil society too has fallen victim  to excessive politicization. Excessive politicization and political affiliations erode the very essence of independent civil society in a country. Our civil society is found carrying the same agendas the political parties are pushing forward and hence provide little or no contribution in pushing the economic reforms forward. An independent civil society is essential to the success of the reform process because it can actively promote equal access of every sector and class of the society to the benefit of the reforms. However, our civil society, due to its politicization is failing to act as a uniting force. Agendas picked up by civil society currently are less of national priorities than ideological agendas.

The General Public
Source: http://www.nepalmountainnews.com
Poor and middle classes of the society are another major stakeholders in the economic reform process. As seen in countries like India and China, liberalization and increased access to economic activities reduce absolute poverty rates significantly. Since they consist the majority of voters, they also can exert pressures on political parties to initiate reforms in the country. Benefited by the limited liberalization o the early 1990s, this segment of population is overwhelmingly engaged in foreign employment and improving living standards through remittance income. In fact there has been significant reduction in absolute poverty rates in the country , whose credit, in large part, goes to foreign employment and remittance incomes. This has encouraged even more people to opt for foreign employment. Nepal's over-dependence in remittance has begun showing the signs of what has been termed “Dutch Disease” in which a country goes through vicious cycle of running economy through remittance incomes which in turn lifts off the pressure to make economic reforms, which results in poor investment environment and little economic opportunities. Little economic opportunities force even more people to opt for foreign employment and brings in more remittances to run the economy. The findings of recent Nepal Living Standard Survey report suggests amid the political chaos and instability, poor are lifting themselves out of poverty. Poor are hence, slowing having less stake at the economic reforms.

In this context, any attempts at economic reform process, should take into consideration the question, if there are any stakeholders left for such reforms and who exactly is the stakeholder. Measures to hold all these actors for the reform is another necessary step that needs to be taken for a long term development of Nepal. Free, fair and regular elections would be very useful in making the political parties feel more stake in economic reforms whereas better mechanisms to curb corruption and devising a mechanism to tie up bureaucracy's remuneration with nation's economic performance could be an option for bureaucracy's stake in the reforms. More aware and demanding consumers could pressurize private sector to be more responsible and supportive of economic reforms. Meanwhile, emergence of an strong independent, non-political civil society could be the major milestone in energizing all these actors for economic reforms.

-Surath Giri
(Published in The Himalayan Times- Perspectives of November 6, 2011)

Nov 4, 2011

10 Reasons to Invest in Nepal

Source: http://business.gather.com
Today I found a promotional promotional booklet FNCCI (Federation of Nepalese Chambers of Commerce and Industries) has prepared to promote foreign direct investment in Nepal. It has a section called "Why Invest in Nepal?" where following 10 reasons have been outlined. Accompanying the reasons are my comments.

1. Located in between two emerging economic giants, India and China, and preferential access to their market: That's a huge advantage for us but it is also necessary to consider the question: If two emerging economic giants are our neighbors, why should an investor invest in Nepal? What additional incentives can we offer them to make us more appealing than our neighbors?

2. Huge potential of growth and untapped natural resources: I would say that's a prime reason why investors should be interested in Nepal. The potential for growth and amount of natural resources we have is amazing!

3. Liberal rules for investment including foreign investment: Well, not exactly. In the Index of Economic Freedom, which ranks countries around the world based on their friendliness to entrepreneurs and economic activities, Nepal scores 5 out of 100 in the Investment Freedom criteria.

Here is what Heritage Foundation has to say about it:
Most new foreign investment must be approved by the government. Bureaucracy and regulatory administration are burdensome, non-transparent, inconsistently implemented, and inefficient. Political instability, pervasive corruption, and inadequate infrastructure and administrative capacity also inhibit investment. Residents may hold foreign exchange accounts in specific instances; most non-residents also may hold such accounts. Convertibility is difficult and not guaranteed. Most payments and transfers require prior approval by the government. There are restrictions on most capital transactions, and real estate transactions are subject to controls. Foreign investors may acquire real estate only for business use.
4. Ease in repatriation of foreign exchange

5. Comparatively lower tax rates especially for industries: That's an advantage we can capitalize on. But despite the low taxes, the cost of doing business in Nepal is relatively high due to militant labor unions, lack of infrastructures, small scale market, corruption etc. This factor has to be considered as well.

6. One Window Policy: Well, it could be encouraging to the investors. However, this policy is not new to Nepal. In theory, one window policy has existed in Nepal since the Panchayat Era but we are yet to see its effective implementation. 

7. Relatively small and accessible government: Although our leaders have very little, if any, interest towards national economic issues, they are relatively accessible , at least for the foreign investors and that's another advantage we could capitalize on.

8. Open and liberal export/import rules: Compared to India, maybe. But there is too huge a room for improvement in this area before it can really work to our advantage.

9. Hardworking people: Really?? What about our militant labor unions who are slowly but steadily destroying whatever little industries we have? What about the excessive politics that goes on with these unions? 

10. Many sector-specific incentives

So what do you think about these reasons? Are these the right reasons for investing in Nepal? Are there any additional reasons? Share your views below!

Oct 31, 2011

The Role of Social Media and Citizen Journalism in Nepal

(Following essay I wrote, was awarded Third Prize in the Fundamentals of Freedom: 2011 Asia Essay Contest.)

On 1st May of 2010, Maoist, the largest political party of Nepal , initiated an indefinite strike intending to topple the then government and take over the country. Thousands of Maoist cadres and supporters entered Kathmandu valley armed with weapons ranging from bamboo sticks to swords and took over the streets. Every shop, business, factory, school, college and transportation was forced to close down. As the strike got violent and continued for days, the whole nation came to a standstill. People were scared to go out of their houses. Even media persons and journalists were attacked by the protesters. As the longevity of the strikes increased , so did the possibility of huge confrontation initiating a wave of terror among the general citizens and media.

Despite this, the residents of the valley weren't passive though. Having seen countless protests and strikes before, they didn't react at first hoping the issues would be resolved in a day or two. However, as the strike exceeded 3 days, people got concerned and started getting involved in the discourse regarding the ongoing strike. What facilitated the conversations?? Of course, the ubiquitous Facebook and its counterparts such as twitter and blogs.

On the 7th day of the strike, general people who had come together with the help of the social media tools, organized a peace rally opposing the strike. More than 20,000 people joined the rally and swarmed in the major streets of the valley-unarmed and carrying national flags. Although there were some incidents of protesters attacking the peace rally participants, the rally was largely peaceful and later that day, Maoist announced that they were postponing their strike for an indefinite time. Hence, Nepal averted a huge political crisis that could have turned the country into a state of civil war.

Andreas Kaplan and Michael Haenlein define social media as "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content."1 Nepal's social media revolution started at a time when main stream media was at its knees due to excessive censorship and oppression by the then royal regime. King Gyanendra took power after the royal coup of 2001 in which he sacked the then prime minister and dissolved the parliament. Fearing protests he imposed harsh censorship on both print and electronic media curtailing press freedom of the nation severely. Since he failed to curb the web media, blogs and Internet medias emerged as the sources of unbiased and uncurtailed information for the citizens with access to the internet and knowledge of new media.

But it wasn't until 2006 when the media censorship reached its height that social media tools such as blogs emerged as a serious alternatives to the mainstream media. During the people's movement of 2006, main stream media (both private and state-owned) were turned into mere puppets and propaganda machines of the King. Citizen journalism and social media such as blogs became the preferred source of true information and news. Citizen journalists became the source of the news of actual happenings in the streets. After the April 2006 revolution, which saw the King lose most of his powers leading to be dethroned later on, Nepal's web focused citizen journalism has seen a rapid growth and is increasingly becoming the most favored source of news and information.

As of June 30, 2011 , there are 1,072,900 Facebook users from Nepal2 which amounts to 3.7% of the total population. For a country like Nepal whose only less than one-tenth of the total population has access to the internet, the numbers of Facebook users is pretty high. More than 1200 blogs have been listed by a prominent Nepalese blog aggregator 3 and some blogs such as Mysansar receive more traffic than the news sites run by media houses. Mysansar, the most popular blog of Nepal is among the top 50 thousand most visited websites in the world. 4

Besides acting as alternative sources of news and information, social media tools like Facebook contribute in allowing a the citizens a greater voice in media and issues that concern them in the society. For eg. , Facebook has been a seedbed for initiating campaigns and gathering solidarity for a certain cause or issue in Nepal. Some of the most popular citizen campaigns of Nepal of the recent times were initiated in Facebook. Gari Khana Deu , a campaign initiated demanding rule of law, end to impunity and right to earn a living has gained a nationwide momentum and now has been picked up by the mainstream media as well as civil society. Jyaala Pura Liyau, Aba Sambidhan Deu (Now that you have taken the full wages, give us our Constitution), is another pressure campaign initiated in Facebook to pressurize the Constituent Assembly to formulate a constitution in time that has now become a nation wide movement after being picked up by the mainstream media and civil society. As Constituent Assembly has been postponing the deadline for formulating a new constitution time and again and mainstream media has failed to provide enough platform for general citizens to vent their frustrations over the process and the ongoing instability and impunity , citizens are turning more and more towards social media to get together and have their voices heard be it through organized protests or be it through expression of solidarity or be it through participation in intense discourses. Nepal Unites , a campaign initiated to “bring the 'accountability' back in Nepali politics and the larger society, and contribute to this actively from where ever we (Nepalese) live” has attracted considerable mainstream media's attention and has generated huge public discourse on the issues of accountability and good governance.

The notable aspects of campaigns initiated through social media is they provide young people with platform to voice their opinions, garner solidarity and act on the issues. As evidenced by the success of Nepal Unites campaign in garnering a strong support base of young people and the success of Aavaz.org to mobilize people, especially the young people around the world to act on the issues that concern them and have a greater involvement in such issues demonstrates the important role social media plays in increasing the access of people to media. With the advent of social media, the world is seeing more and more young people involved in the issues within and outside their society as well. 

The advent of social media is truly a major milestone in the history of media. Not only has it changed the way we communicate, opine or get our information but it has also challenged the hegemony of huge
media houses and other traditional media by bringing more competition in the sector and increased involvement of the general citizens in the process of information dissemination. The role of social media in the recent Arab uprisings demonstrate the pivotal role social media can play to empower citizens and act as an alternative to main stream media. Social media plays an even greater role in Nepal, especially at the time of political transitions like now, to inform and educate the citizens.

-------

1 Kaplan, Andreas M.; Michael Haenlein (2010)."Users of the world, unite! The challenges and opportunities of Social Media” Business Horizons 53 (1): 59–68.

2  http://www.internetworldstats.com/asia.htm

3  http://www.bloggers.com.np

4  According to Alexa.com

-Surath Giri

Oct 17, 2011

Lovers of the Arctic Circle: An intense and beautiful film

There is a downside of having watched too many movies (and most of them being critically acclaimed ones), it's gets more and more difficult to find a movie that's truly refreshing and impressive. Even the critically acclaimed ones fail to extract "wow" from you. However, after watching the Spanish director Julio Médem's 1998-movie "Lovers of the Arctic Circle", I realized it not that difficult for an inventive director to generate that "wow" feeling even from the movie-maniacs like me and what's more? He has done it making a romantic movie. Romantic movies in my view are the most risky venture for a movie director seeking to make a great movie because usually there is a very thin line between a great romantic movie and a cheap chick flick.

Full of themes of life, death, love, destiny and more prominently the circle of life and its coincidences, Lovers of the Arctic Circle tells the story of Otto and Ana who first meet when they are kids outside their school, are fascinated by each other and later on develop an incestuous relationship as half brother and half sister after Otto's father falls in love with Ana's mother and they get married. Their names are palindromes, a fact highlighted time and again in the movie, to symbolize the circle of life, I believe. The film traces Otto's and Ana's story from that fateful day outside the school to a  day in their 20s  where they meet once again  in Lapland within the Arctic Circle, under the midnight sun. As teenagers Otto and Ana become secret lovers as they live in the same house and are siblings. They get separated when Otto's mother dies while living alone and Otto blames himself and his father for the miserable way his mother died. He leaves Ana and becomes a airplane pilot. Though their paths cross again and again throughout their lives, they keep missing each other until the power of their love finally draws them together.

The plot demands your full attention to be understood (if you are used to linear plots, you are going to have a hard time) and the cinematography gears towards a visual poetry. Circles in incidences and events as well as coincidences are abound. The scene where two lovers sitting unaware of each other in a cafe and moving along on another path for a while exemplifies the missed chances in life and how much life depends on fate. Even the coincidence that the first meeting of Otto and Ana was substantial in bringing together their single parents and making them siblings is an example of irony of life.

The way story unfolds is arguably more interesting than the story itself. The story is expressed through Otto's and Anna's perspectives one after another. Viewers can feel assured that they will be kept engaged until the end. However, the ending is very likely to polarize them. Some will hate it whereas some will find it poetic and the right one. I felt like being kicked on the stomach but again thought it was the right one.

I was happy to find this amazing movie that impressed me with its inventiveness and stroke of brilliance. Highly recommended!

Oct 8, 2011

Seth Godin's Purple Cow and Promoting Libertarianism

I just finished reading Seth Godin's remarkable book called Purple Cow: Transform Your Business by Being Remarkable. Seth Godin is a well-known entrepreneur, author and public speaker and a very respected figure in the field of marketing. In this  short and simple book, which in fact looks more like an essay stretched into a book, Godin presents one simple but remarkable idea; the old ways of marketing is dead. Overwhelming people with ads about your products or services through every conceivable medium doesn't produce results anymore. Why? 

Because there is too much competition, too much ads and products but no time/money/interest among consumers for your products or services. He says, "The sad truth is that whatever you make, most people cannot buy your product. Either they don't have the money, or they don't have the time, or they don't want it. The world has changed, there are far more choices and less and less time to sort them out."

The way out? Be Remarkable. Create something that is worth noticing and that people talk about. Ideas that spread are more likely to succeed than those that don't. Rather than targeting mass public and spending millions of dollars on advertising, target the early adapters who are constantly in search of new products and services and make your products remarkable enough to impress them. Also known as sneezers these small segments of consumers aren't only looking out for remarkable new products, services or ideas but when impressed they also tell and urge their friends and families to use the product. This method is more effective in catapulting your sales. 

I really liked the book and the idea. Although, the context of the book is purely business sector, I think the idea is equally applicable in the market place of ideas and ideologies. I have found in my conversations with many people that general people rarely have a preset set of stands regarding social or economic issues. The same person may take a liberal (classical) stand on one issue whereas he/she may take an authoritarian stand on another issue. As discussed in the book, I think it's because these people lack time and/or interest to learn more about the deeper implications of issues at hand. At the same time, too many ideologies are competing for their attention and support. I think targeting mass public with ideas is less effective than targeting the sneezers of the world of ideas. Grabbing their (sneezers) attention and impressing them with the remark-ability of classical liberal ideas could go a long way in promoting liberty. Libertarianism , I believe has the features of remark-ability and a set of Otaku supporters, which should be exploited for the mission. How to find these sneezers in the world of ideas could be a whole different topic of conversation.

Sep 27, 2011

केही लिबेर्टेरियन भनाइहरु -६


  1. धन को उत्पादन माथिको नियन्त्रण मानव जीवन माथिकै नियन्त्रण हो ।  -Hilaire Belloc
  2. कर उठाएर कुनै देश धनी हुन्छ भन्नु कुनै मान्छे बाल्टिनभित्र बसेर बाल्टिन उचाल्न खोज्नु जस्तै हो । -Winston Churchill
  3. पहिले उनीहरुले तपाईंलाई बहिस्कार गर्थे - काले भएकाले । अहिले उनिहरु तपाईंलाई समाबेश गर्छन् - काले भएकाले । तपाईं त्यसलाई प्रगती भन्नुहुन्छ ? -Marylin French
  4. कुनै पनि सरकारले स्वेच्छाले आफ्नो आकार घटाऊदैन । सरकारी कार्यक्रमहरु एक चोटि लागु गरेपछी बिरलै मात्र हराउछन ।  -Ronald Reagon
  5. समाज आफ्ना सदस्यहरुको भलाईको लागि अस्तित्वमा रहन्छ नकी समाजको भलाईका लागि मानिसहरु । -Herbert Spencer
  6. नाफा कमाउनु नराम्रो हो भन्ने बिचार  समाजवादीहरुको हो , म त घाटा खानु चै नराम्रो कुरा हो भन्छु । -Winston Churchill
  7. राजनीतिग्यले आफुले भनेको कुरामा आँफै विश्वाश गर्दैन , त्यसैले अरुले उस्का कुरा पत्याउदा उ आँफै छक्क पर्छ । -Charles DeGaulle
  8. मृत्यु र कर बिचको फरक के हो भने ,मृत्यु सदन बसेइ पिच्छे नराम्रो हुँदै जादैन । -Will Rogers
  9. लोभी पुँजिपतीहरु पैसा कमाउन परे व्यापार गर्छन् , असल समाजवादिहरु पैसा कमाउनु परे अर्काको खोस्छन । -David Friedman
  10. अधिकार भनेको "जुन तपाईंलाई अरुले दिनुपर्छ " भन्ने होइन । अधिकार भनेको "जुन अरुले तपाईंबाट खोस्न पाउदैन" भन्ने चै हो । -Ramsey Clark

Sep 26, 2011

Development Buzzwords: What do they actually mean?

William Easterly is no doubt one of the most prominent and effective critics of the mindless "aid" industry that plagues almost every developing economies in the world. As evident from the cases of Africa and of course Nepal, development is a very lucrative industry that is harming poor economies like us more than helping us. I have read his book "The Elusive Quest For Growth" and found it very interesting. Recently, he has compiled a hilarious insider's dictionary for development sector. Check it out here.

By the way, here are some samples (LMAO) :

“beneficiaries” : the people who make it possible for us to be paid by other people
“baseline” : a point which is so low that positive results are the only possible outcome
“empowerment” : what is left when all the quantifiable variables give non significant results
“entrepreneurial” : vaguely innovative and cool, but definitely nothing to do with the hated “market”
“sustainable” : will last at least as long as the funding
“ownership” : we held a workshop

Do you have any, add them to the comment!

Who's responsible for adulteration?

Recent revealing of adulteration and malpractices in almost every consumable goods has shocked all of us. From the traditional gudpaks to sausages, no edible goods seem to be uncontaminated and unadulterated. Critical questions about the integrity of the private sector and ignorance of the Nepalese consumers are being raised. Findings have delivered a huge blow and another setback to the already dwindling image of private sector. The government's move to check the quality of food and media's support in highlighting the findings are appreciable. However, some opinions being expressed question the very existence of private sector and whether the state should start playing a greater role in providing goods and services.

Since reactions to the incident has been towards the lack of integrity of private sector, it is imperative that role of all the three parties involved, namely-government, private sector and the consumers be brought under the scrutiny of public discourse and debates. 

The private sector

A critical look at the history of Nepalese private sector would be enough to convince the observer that in Nepal private sector's greatest enemy has been the private sector itself. Neither has it been able to follow ethical and moral standards of business nor has it been able to assert its importance in the economy during policy formulations. Syndicates, cartels, rent-seeking behaviors have always characterized Nepalese private sector. This is partly because of the patronizing attitude the state has always taken towards the sector since it took its first steps in 1951. Similarly, despite being the largest employment provider of the nation and the engine for economic growth, private sector has failed to assert itself when policies are being formulated. 

Free markets and ensuing competition are believed to weed out the ineffective and unethical players out of the market. However, as evident in our case, blatant ignorance on the part of consumers and government apathy at justice administration in cases of malpractices can provide incentives for enterprises to cheat the consumers and put their safety at risk. Government protection and promotion of rent-seeking behavior too is disrupting the market forces in our society. Syndicates in almost every sector of the economy prevent competition and innovate players from entering the market which is why competition has been ineffective in ensuring the quality of products and services.

Nepalese private sector should contemplate on the question that when private sector is already being attacked and blemished in the political discourses of the country, will such practices be any helpful for the continued existence of the sector?

The Government

Government's initiative to expose aberrations in the market is truly appreciable and initiatives such as these can discourage such malpractices. However, whether Nepalese consumers will  start getting  quality goods or not will mostly depend on whether or not such inspections are carried out on a regular basis rather than once in ages and whether or not the culprits are punished.

The fact is that many of the guilty enterprises were very popular and had been in operation for years which signals how ineffective the government had been  in its role as a quality controller. What were the government's regulatory and monitoring agencies were doing when almost every product available in the market was adulterated? Will all businesses that were found guilty be penalized and will the penalty be enough to deter them from engaging in such practices again in future?

Inability to punish the owner of Sugam Gas Company who was responsible for tampering with 15,314 LPG cylinders and deaths by LPG related accidents indicates the level of sensitivity of government towards consumer safety. This also inspires enterprises to engage in quick profit making schemes by risking consumer's health and safety.

The Consumers

As market inspections continue to unveil series of aberrations in the market, it is imperative that Nepalese consumers learn to be more alert and take informed consumption decisions. Nepalese consumers need to learn to take care of themselves rather than relying on the moral standards of business owners or effectiveness of government bureaucrats. It does not take a degree to know or at least assume that qualities of goods and services being offered by many of the business enterprises are of sub-standard quality and consuming such goods is hazardous to their health and safety. It is an open secret that cheap prices come with a compromise in quality. Such incidents should help us reinforce this learning in us.  Developing a habit of checking the information provided by the product covers and packages and raising voices against irregularities and frauds is another measure Nepalese consumers could take to mitigate such hazards.

Conclusion

Blaming the private sector alone wouldn't only be injustice to the businesses which are operating with ethical standards and providing quality goods and services but could also prove to be a great folly if it leads to diminishing the role of private sector in the economy rather than punishing the culprits and promoting innovation and competition by providing access to new players in the market. The private sector should learn to be ethical if it doesn't want to facilitate its own destruction whereas the government could do a better job by making such inspections regular and punishments effective. Most of all, incidents such as these should shake Nepalese consumers out of complacency and make them more responsible in taking care of themselves.

Surath Giri

(Published in The Himalayan Times-Perspectives of 25th September, 2011)

Sep 24, 2011

Niall Ferguson's 6 killer apps of prosperity and Nepal

Click on the image to watch the video.
Got this TED video recommended by a friend. Niall Ferguson who  is a British historian specializing in in financial and economic history, particularly hyperinflation and the bond markets, as well as the history of colonialism explains briefly in this 20-minute presentation the 6 killers apps West used to create the huge amount of wealth and prosperity in the last 200 years. He says these apps were what differentiated the West from the rest and caused the huge divergence in the level of living standards and the best news is that these apps are "open-source" i.e. share-able and adaptable. And in fact that's what many of the rapidly developing Asian and Latin American countries doing, i.e. downloading and using them. 

Following are the 6 killers apps for prosperity:
  1. Competition 
  2. Scientific Revolution 
  3. Property Rights
  4. Modern Medicine
  5. Consumer Society
  6. Work Ethic
Well, I find the future of Nepalese society pretty much bleak as we have been inept at using these apps so far and if the trends of Nepalese political and social discourse were to be followed we are very hostile to these apps. We doubt the "open-source" nature of these apps and instead prefer to consider them as "proprietary apps" developed by the West. Majority of our political leaders and public intellectuals believe  apps like Property Rights, Competition and Consumer Society are in fact viruses and malware and getting rid of them would bring prosperity in our society although anyone with common sense will fail to see how apps that have worked "miracle" everywhere else can still be malware to our society. Even the supposedly fans of these apps such as private sector, civil society and entrepreneurs are trying to destroy these apps. Labor unions are hell bent on sending work ethic to recycle bin. In this context, I hardly see these apps making any changes in our lives. What do you think?

Sep 10, 2011

Government's relief packages: My thoughts--I

The government has introduced a series of relief packages and as you might already have guessed, I am as  skeptic as ever. But since his holiness Dr. Bhattarai could do no wrong, I would rather present my curiosity and inquiry than slam criticisms. 

Government to instruct local administrations to immediately return seized land and property: 

Source: www.ekantipur.com
Well, that's something we all would welcome. I just hope it really happens because the new "revolutionary" land owners seem to be making themselves pretty comfortable and enriched with their new acquisitions. They might be a little reluctant to give up their acquisitions and "immediately" could easily turn into "ages" and just to help Dr. Bhattarai make "informed" decisions, local administrations have been proven weak and ineffective for the job. I think his holiness should employ YCL cadres for the job if he wants to get better results.

By the way, just a small curiosity: How come returning the land to their rightful owners a "relief" package? I used to think land ownership was a right not a "relief" package. But never mind, what's in a name? I really welcome the move!

Government to provide Rs. 200000 each to 50,000 youths under youth employment program:

Last time's youth self employment scheme generated really huge fanfare and tons of accolades for his holiness before fading into oblivion. For a research purpose, along with my friends, I had gone to the finance ministry to inquire about the status of the scheme. The scheme had been confined to a single room in the ministry and was providing generous employment to about half a dozen people. Besides the employment, the scheme had also provided additional perks to its employees as we found a lady vigorously scanning some question papers and a text book when we visited the office. We were pretty surprised to find the lady extremely reluctant to talk about her additional perks though. So, I think his holiness should consider employing more than just a dozen (already relatively well-off) people.  

And maybe his holiness should consider letting enterprises like Surya Nepal Garments run. Despite being capitalists and bloodsuckers,  20 such enterprises, if allowed to run, could easily provide jobs to 50,000 youths without spending a dime from the government treasury.

Government to subsidize LP gas (a cylinder a month per family) and kerosene (5 liters for oil lamp users): 

Source: www.ekantipur.com
Well, I love this move and I believe so do majority of the Kathmanduites. Getting subsidized LP gas is awesome even though it might mean using poor people's (who have never used LP gas and majority of people in Nepal can't afford LP gas) tax money to help relatively well-off people to consume LP gas. I am really surprised why almost every government relief package has a subsidy on LP gas provision. But as they say, आम खाओ पेड मत गीनो, I shouldn't really keep dwelling on it I guess.

By the way, recently, a businessman who had been tampering with gas cylinders and regulators posing great risks to thousands of LP gas consumers walked free after paying minimal fine. Your holiness, if you could punish (and I mean severe enough punishment here) criminal such as those, consumers could feel more "relief" than a subsidized gas.

....
I will continue my ramblings in another post as well. Do help me figure things out with your comments!

Sep 7, 2011

In developing countries, government is usually the problem

I was going through a blog post titled "20 Things I’ve Learned From Traveling Around the World for Three Years" by Gary Arndt in Tim Ferriss's blog. One of the things he has learnt really caught my eye. Below is his lesson no 16:

16) In developing countries, government is usually the problem.

I have been shocked at the level of corruption that exists in most developing countries. Even if it is technically a democracy, most nations are run by and for the benefit of the elites that control the institutions of power. Political killings, bribery, extortion and kickbacks are the norm in many places. There is little difference between the Mafia and the governments in some countries I’ve visited. The corruption in the Philippines was especially surprising. It isn’t just the people at the top who are corrupt. I’ve seen cops shake people down on the street for money, cigarettes or booze.


Aug 28, 2011

When intentions and policies contradict

Source: www.ekantipur.com
Two recent happenings which are in sharp contrast to each other raise concern. The first one is the government draft of the Employment Guarantee Act promising to provide a job to all the families living below the poverty line. The act, if implemented, is supposed to provide a job of at least 100 days per year to at least a member of poor families. The act considers guarantee of employment a critical part of socio-economic security and fundamental rights of citizens.

The second is that Surya Nepal's permanent shut down its garment production unit due to constant agitation by trade unions. The decision is likely to render at least 3000 people jobless and a significant loss in government's revenues. The company's decision shouldn't come as a surprise to anyone, since the prevailing trend is of industries shutting down, scaling down or relocating out of country. Militant labor unions and inflexible labor laws have been the primary reasons for such trends.

The Irony

On the one hand, the government is purportedly concerned with the high unemployment and underemployment rates of the country and the poverty it engenders. Whereas, on the other hand, the government is shamelessly blind to the plight of Nepalese industries which are being forced to close down resulting in joblessness of thousands of employees and loss of revenues to the government.

Employment Guarantee
In it's noble attempt to gain cheap popularity and with its misguided sense of responsibility, the government has brought yet another scheme that looks great at face value but is bound to fail eventually. If the findings of the latest Nepal Living Standards Survey tells us anything, then it's that people are better able to lift themselves out of poverty than the government trying to plan and do it for them. The steep decline of absolute poverty by 18 percents is accompanied by a steep rise in the number of households receiving remittances from foreign employment. According to the report the number of households receiving remittance income have also risen dramatically to 55.8 percent from 31.9 percent reported in NLSS 2003/04. 

While the politicians were bickering over power and positions and bureaucrats busy making money, the poor people were quietly and steadily lifting themselves out of poverty. Fortunately, when people are left alone to fend for themselves and grow and politics isn't involved, they tend to achieve their objectives very efficiently. Poor people of Nepal have not only managed to lift themselves off poverty but they have also been contributing more than 17.4 percent of the GDP through their remittance incomes. In other words, it's not the government that's helping the poor but the poor that are helping the government officials get their salaries.
Source: http://kardiesel.blogspot.com/
It was fortunate that government failed to realize the potential of foreign employment and didn't dabble in the sector. Had it tried to plan and guide foreign employment sector it would have ended up like every other sector guided by the so called numerous five-year plans . We are already on the 12th  plan but are yet to see any significant economic growth or development done by these plans. Previous attempts of government to provide employments such as Youth Self Employment Scheme have failed to achieve their obectives despite the huge fanfare they created initially and are currently limited to a room or two at the Finance ministry employing less than a dozen people at mostly administrative jobs. The government should review and scrutinize its previous attempts at providing employments to poor or youth segment of the population before preaching lofty dreams of guaranteeing jobs. The committee which drafted the act is said to be holding discussions with private sector so that jobs could be created in the industrial sector which in itself is truly ironic.

Hypocrisy and insensitivity
The government that was deaf and dumb while many major industries of the country shut down their operations and whisked away their capital and resources abroad to establish more enterprises in friendlier environments is holding discussions with the private sector to provide jobs for the poor. What could this step possibly mean except sheer hypocrisy and insensitivity in the part of the government?

Surya Nepal Garment's permanent closure the government's apathy at the incident highlights how serious the policy makers and government is about finding practicle ways to adressing the abject poverty of Nepal. Surya Nepal  had been providing direct employment to around 650 people and indirect employment to more than 1400 people most of whom come from the poor segement of the population and consist mainly of women. 

As evident in this case, militant trade unions who claim themselves to the voices and protectors of poor are in fact the very enemies of the poor. It is high time the government got rid of policies that merely sound good and bring in those that are realistic. For starters, bring in realistic and practical policies to provide jobs through protecting job providers and encouraging industries to flourish.

Conclusion

If Nepal is serious about achieving economic growth and prosperity, the government and policymakers should shift the role of government from a feudal patron granting favors to its citizens towards the role of a protector of citizens and productive forces in the country and facilitator of peaceful interactions between the members of the society. Employment Guarantee Act may sound great at face value but the bitter truth is it's another avenue for the politicians to garner short term popularity and loads of wealth for themselves.

-Surath Giri
(Published in The Himalayan Times of 28th August 2011)

Aug 23, 2011

Peter Weir's The Way Back (2010) and some lessons in freedom

I just watched The Way Back (2010), a war drama directed by Peter Weir who is very well known for his great movies like Dead Poets Society (1989), The Truman Show (1998) and Master and Commander: The Far Side of the World (2003) all of which are among my favorites. Although The Way Back (2010) pales in comparison to Weir's previous movies, the subject matter of the movie and visually spellbinding cinematography makes it a good movie. However, while watching this epic story of survival ,solidarity and indomitable human will about a group of prisoners who escaped from Soviet Gulags (labor camps) in Siberia to India seeking freedom walking more than 4000 miles , I was more engrossed in the lessons on freedom it delivered than its cinematic elements and its cinematic value.

The story follows Janusz, a Pole condemned by accusations secured by torturing his wife by Soviet officials and sent to a labor camp in Siberia. The labor camp is a melting pot of criminals and dissidents of Stalin and Soviet communism from all over Russia and its occupied territories like Poland, Hungary, Estonia. Even a cynical American named Mr. Smith is in th camp as a prisoner. Janusz with Mr. Smith forms a plan for escape. the duo is later joined by a Russian thug, a comic accountant, a pastry chef who draws, a priest, and a Pole with night blindness making the group seven membered.

The group escapes under the cover of a snowstorm but their escape is just the beginning. The group faces freezing nights in wilderness, deadly starvation due to lack of food and water, storm of mosquitoes, an endless and hostile desert, a desert storm and the Himalayas before finally reaching India and achieving freedom. Not all survive the journey but those who do, walk more than 4000 miles.

Some lessons I drew from the movie are as follows:

  • Liberty is in fact something that makes all the difference in the world.

In his article 7 principles of sound public policy, Lawrence W. Reed has put this as one of the principles of sound public policy. Watching the struggle of the characters in the movie thorugh the freezing nights and arid desert, one is tempted to ask, "Is freedom worth it? Is liberty worth all these risk and troubles?" But in the scene where the Pole with night blindness respond to the remark that he might die while escaping with "..then I will die a free man" and the last scene when these characters reach India and achieve freedom, the joy in their eyes and the obstacles they overcame says it all, 'yeah, it's worth it'.

  • The greatest harm totalitarianism does to freedom of mankind or society is the way it destroys even basic sense of morality in the society and alienates people from each other.

Janusz's wife is tortured and forced to make accusations against her own husband condemning her to life long regret and guilt. People cannot speak what they think even at the gulags (labor camps) as one character says at one scene "...Stalin has ears everywhere" and "...whole Russia has become a huge prison". Another brilliant movie called "The Lives of Others (2006) also deals with the way totalitarianism destroys lives and morality of people.

  • The huge and vicious net of propaganda and lies  created by totalitarian systems creates an artificial reality for common people and perpetuates such systems.

The character Valka in the movie truly represents the common folks (in thoughts not in activities) living under totalitarian systems like Communism. They fail to understand the implications totalitarianism has in their lives and tend to adapt to the system. For them the dictator always remains a hero no matter what he does. The scene where Valka assaults the comic character for making fun of Stalin (although Valka himself has been sentenced to labor camp) and asserts that Stalin is a hero who takes away from rich and gives it to the poor reflects how common people generally tend to look at communism and communist dictators. The point can be further emphasized by the fact that even though Mao Zedong is said to have killed more than 30 million people directly and indirectly and yet he is still considered Godlike by the older generation. Although the same can't be said about the new generation. I think it's because of the huge and vicious net of propaganda created by totalitarian systems that people tend to think that way. And I believe it is one of the incentive for communist dictators as no matter how many their wrong doings they will still be celebrated and cherished more by the common folks who survive their misdeeds.

Aug 22, 2011

केही लिबर्टेरियन भनाइहरु - ५

Source: Teamster Blog
  1. मानिसलाई दास बनाउनका लागी सबैभन्दा राम्रो र प्रभावकारी उपाय उसलाई निहत्था गर्नु हो ।  -George Mason
  2.  आगो, पानी र सरकार -यी तीन कुरालाई दया के हो भन्ने थाहा हुँदैन ।  -Albanion Proverb
  3. जब शब्दहरुले आफ्नो अर्थ गुमाउछन तब मानिसहरुले आफ्नो स्वतन्त्रता गुमाउछन ।  -Confucious
  4. राजनिती भनेको दुबैलाई एक अर्का सँग बचाउछु भनेर धनीसँग पैसा र गरीबसँग भोट लिने कला हो ।  -Anonymous
  5. मुद्धा जे नै होस्, सरकारद्वारा एउटाै समाधान सबैमाथि लाद्नु भन्दा स्वतन्त्रतालाई सयौ विकल्पहरु प्रस्तुत गर्न दिनु नै असल हुन्छ ।  -Harry Browne
  6. स्वतन्त्र बजारले अनुत्तरदायित्वलाई सजाय दिन्छ, सरकारले भने अनुत्तरदायित्वलाई पुरश्कार दिइरहेको हुन्छ ।  -Harry Browne
  7. त्यो समाज जसले समानतालाई स्वतन्त्रताभन्दा माथी राख्छ, अन्तत उसले न स्वतन्त्रता पाउँछ न त समानता नै ।  -Milton Friedman
  8. आफुले गरेको निर्णयको मुल्य नचुकाउनु पर्ने व्यक्ती हरुलाई निर्णय गर्न दिने जस्तो मुर्ख र खतरनाक निर्णय गर्ने तरिका अरु कुनै छैन ।  -Thomas Sowell
  9. राजनितिज्ञहरुले बम हान्ने व्यक्ती जस्तै आफ्नो शिकारलाई बिरलै मात्र देख्छन ।  - Donald Boudreaux
  10. सबैभन्दा जटिल प्रश्न "सबैभन्दा उत्तम के हो ?" भन्ने हैन बरु "सबैभन्दा उत्तम के हो भनेर कसले निर्णय गर्छ ?" भन्ने चै हो ।   -Thomas Sowell
  11. राज्यवाद लुटेर मौलाउछ भने एउटा स्वतन्त्र देश उत्पादन गरेर मौलाउछ ।  -Ayn Rand
  12. कल्याणकारी राज्य संसारको सबै भन्द ठुलो ठगी खेल हो जसमा पहिले तपाईं खुसुक्क मानिस हरुको पैसा लिनुहुन्छ र त्यसको केहि हिस्सा पछी तडक्-भडक सँग फिर्ता दिनुहुन्छ ।  -Thomas Sowell