nepali economy
Our Geography and Our Economy
May 24, 2008 UWB	42 Comments
Does Mr. Prachanda also have the spirit and determination to lead the impoverished Nepal and be the helmsman of 27 million Nepalese?
By Samyam Waglé
While the debate about the probability of miraculous economic success in Nepal under Maoists leadership is going on, they have not still come up with such strong convincing economic policies that would bring such dramatic turn allowing the three fold increase in GNP of the country in just a period of a decade.
No doubt that if it is possible, it is possible from capitalism and not socialism as Maoists believed and fought for. But they must have realized now after the failure of China under Mao and success under Deng which made them change their economic policy.
The noted economist Jeffrey D Sachs researched the effect of geography on economy and found that nearly all landlocked countries in the world are poor, except for a handful in Western and Central Europe like Austria, the Czech Republic, Hungary, Slovakia, and Switzerland which are deeply integrated into the regional European market, and connected by low – cost trade. Besides them all other land locked countries are poor because of geography that leads to high cost trade.
His famous research found that development surely seems to be favored among the temperate-zone economies, especially the subset that: (1) is in the Northern Hemisphere; (2) has avoided socialism; and (3) has avoided being ravaged by war. Tropical regions are hindered in development relative to temperate regions, probably because of higher disease burdens and limitations on agricultural productivity.
He further adds that coastal regions and regions linked to coasts by ocean-navigable waterways are strongly favored in development relative to the hinterlands. Landlocked economies may be particularly disadvantaged by their lack of access to the sea, even when they are no farther than the interior parts of coastal economies, for at least three reasons: (1) cross-border migration of labor is more difficult than internal migration; (2) infrastructure development across national borders is much more difficult to arrange that similar investments within a country; and (3) coastal economies may have military or economic incentives to impose costs on interior landlocked economies.
Leading thinkers have pointed out the four major areas in which geography will play a fundamental direct role in economic productivity. They are transport costs, human health, agricultural productivity and ownership of natural resources (including water, minerals, hydrocarbon deposits, etc.
Economists say it is the high transportation cost that inhibits the ability of landlocked countries to engage with the outside world to trade goods, exchange capital, and borrow ideas. Jeffrey Sachs also points out the burden of diseases on economic development. Tropical regions are more prone to diseases which have vital effect on economic growths. He even claims fertility decisions are affected by geography. Country like ours is still dependent on unscientific agricultural activities which again depend on monsoon rain.
Besides the fate of nations are shared by gift with valuable resources as Kuwait, Saudi Arab, Qatar, Arab are simply rich not because of their well governance but by natural gifs oil! Botswana is also the land-locked country but has diamond mines below them which makes them better! Second is about the neighbors. Some might blame god for not keeping us next to Finland, Canada or Liechtenstein! Though our neighbors are the rising superpowers, our instant neighbors are the Bihar in south and Tibet in north, both of which are the least developed states.
Even though geography plays significant role in the economic performance, it is not everything. The fact is proved by the success of South Korea but not North Korea and West Germany but not East Germany. They both share the same geography and climate, but due to the authority and policy, the fate of a nation takes turn. Even Burma, the country with potential resources and access to sea and once a better-off country now lags far behind in regards to everything after being mishandled by Junta military rulers. Thus in spite of every thing, leadership is also equally important as can be evidenced by the transformation of Singapore from 1960 to twenty first century, from third world to first under the leadership of Lee Kuan Yew. Does Mr. Prachanda also have the spirit and determination to lead the impoverished Nepal and be the helmsman of 27 million Nepalese?
It is thus better to focus to work around the geographical constraints by making shipping less relevant through lightweight manufactured and processed agricultural exports and can convert our perceived geographical liability into tourism and water wealth and other service-based industries. Maoist no longer can ignore foreign aids and western diplomacy but win the trust of their international critics and create sound atmosphere for foreign investments.
Even though the over optimistic economic plan of Maoists seems unrealistic with regards to geographic and resource constraints, it is rather better to have feasible goals as we can still do better by halving our illiteracy and infant mortality, better our roads, schools, hospitals, water supply, increase life expectancy and improve quality of life and so on. As most of the neighboring countries are rising economically, there is now no excuse for Nepal not to march with better economy even after its civil war is over and politics is fixed.
A funny hypothesis can be drawn that if only Prithivi Narayan Shah had got to read his contemporary Adam Smith's "The Wealth of a Nation" or have understood the value of seas or water-carriages and its significant benefit on trade, market and industry, he wouldn't have stopped his conquest in River Teesta but march all the way to claim the blue seas of Bengal and we might had different Nepal today!
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42 thoughts on "Our Geography and Our Economy"
Here is another bogus coming up with a wishful thinking that Prithivi Narayan Shah would have extended Nepali boarder to the blue sea shore had he read Adam Smith.
The other bogus is Dr. Narayan Khadka wishing Nepal to be a super power in Asia if it had own the battle of Sugauli, in 1814-16 (Read his books on Polical Economy of Foreing Aid in Nepal).
The country has been in poverty simply because of these kind sof poor ideas or wishful dreamings.
bhote says:
about the last para, HAA—HA as in simpsons. r u the same kind of rat who has been brainwashing young nepalese by printing in thier text books that nepal actually won british in nepal-anglo war, one among many great contribution of shah dynasty. bulll shitttttsss.
Prachanda says:
Please stop letting this guy write. I know this guy might be related to or a friend of Dinesh Wagle, but nepotism ruins meritocracy. This idiot is not worth anyone's time. Please, do us a favor.
change (human right, prosperous nepal) says:
good time for industrialist are coming……they are going to be able to exploit labour like they have been doing or may be more and if labour strikes, or make demand ,,maoist will kill them for those industrialist just like in china………………………………..dont those poor or dumb people know that they are the one who will suffur when there is no freedom of speech, human right………………………………………………………
The reasons behind nepal being backward are:
1: The main reason is nepalese.
2: Second is India.
3: third is geography.
we do not have resource for indutry. all we have is hydro and tourism………………so we have to import most of the basic things export what we have…its not like maoist have been saying alike porducing eveything in nepal………………………………………………………we have to open technical /polytech colleges to upgrade human resource…………….like maoist are thinking like halo jotne by ycl, its a dumb brain they have god………………god save nepal from maoist and tiny brainy nepalese. most of the things they have said is stupid.
Sammy Bro says:
people like XYZ are actyally bogus to come with such rubbish ideas….The fact is actually true…why the f…is he turning back to this fact????
Our country is poor because of the boguses like you bro…like XYZ…last of alphabets….always last…tubelight…
anti virus says:
shame(y) bro
Do you know the real bogus? inside your yaku mind.
Hemanta says:
It looks like there is too much interference in Nepalese politics by these Indians like Rakesh Sood because of the presence of too many Lendup Dorjes in Nepalese political landscape. These Indians are trying to take advantage of the very fluid political situation in Nepal.
nexusNP says:
Very interesting comperative analysis based on geographic condition, climate and political scenario.
Your article truly has expressed my views.
Nepali says:
Nepal is poor because we Nepalis are too petty minded to work for the benefit of the whole community-we'd rather suffer along with the community than do anything that would benefit the whole. The present petrol crisis is a prime example-Girija and co will never increase the price of petrol even if the whole country comes to a grinding halt and the govt. loses trillions. Why? Because when they tried to do it before, the Maoists made such a ruckus with their street protests and got so much political mileage that the price rise had to be withdrawn within a couple of days. So Girija and co. will wait for the Maoists to form their govt. and let them deal with the petrol crisis rather than act now in the interest of the people and the country. As soon as the Maoists try to increase fuel prices to a correct level Girija & co will create a huge ruckus and try to gain maximum political mileage. Tit for tat. Both care little for the country. Same goes for the UML or any other political entity in Nepal. Nobody wants to do the right thing for the people or country because they feel they are losing an opportunity to gain political mileage. Where does this destructive, negative behaviour come from? From us ofcourse! Girija, Prachanda, etc did not emerge from a vacuum. They came from us. They are only a slightly exaggerated form of us the people.
Look at the Finance Minister. He's even got a Doctorate-Dr Ram Sharan Mahat. He recently stated that neither would there be a fuel price hike nor would the state bail out the NOC! This insanity uttered by the country's Finance Minister! He isn't stupid, he just doesn't care about the country and it's people. He simply doesn't want his party to get the flak for a price increase. His attitude is like : Let the country go to hell, why should I risk myself in trying to save it.
So Mr. Wagle, what Jeffrey Sachs says may be true, it is largely irrevelant in the present context. Nepal may never be economic superpower like countries with huge coast lines like Japan, the UK, US etc but at least geography should not be blamed for it being dirt poor. That's just fatalism- we can't do anything about it attitude.
With proper economic policies and proper implementation and with a 'can do' attitude from our people we could at least drag ourselves out of the present economic poverty we are mired in. For example iIf our govt. had negotiated properly with India and awarded lots of hydro projects to international private corps. in the early and mid nineties (the Maoist rebellion only really became a major issue from 1999 onwards) we wouldn't be suffering 48 hr a week blackouts, the govt. would be a lot wealthier from royalties and taxes, industries would have cheap and abundant energy and fresh employment in tens of thousands, if not lakhs, would have been achieved. But the leaders were all waiting for the right opportunity to hand over the hydro projects to the ones who would bribe them the most-so it never happened. Remember how the so called intellectuals-the shameless Dixits-successfully campaigned to get the World Bank to back out of the Arun Hydro project? I'm sure they are using eco friendly diesel generators to run their huge educational and publishing businesses right now!
No Mr. Wagle it's not Mr. Sachs theory or our Indian neighbours that bog us down. We need to realise our own great failings. In order to solve a problem one needs to identify the true source from which it springs and not blame this or that. That true source is the negative manner in which we use our brains.
No moderation please!
Tilak says:
Well written shamyam, I liked the comparative analysis. Keep up the good job.
nepstar says:
If our politicians & bureaucrats are not corrupted. The country will really be heaven. We don't need any seas or anything. People of Nepal should be honest and love their country. We have seen in the news recently that Ram Hari Shrestha was killed for 1.7 millions but where this money came from and why it is not deposited to National Treasury. That means we need to change the mentality of the politicians and bureaucrats and people.
coke says:
Politics, politicians and bureaucrats are the main barrier to economic development in Nepal at present context. I don't see any reasons for not developing our country while both neighbouring countries are booming. We ourselves are to be blamed for more concerning toward politics and running after failure leaders who don't have any visions. Once the political stability and corruption control exist in the country, more than half problems for the barrier to economic growth will be automatically sovled. For this, people should make courage to kick out the power lust and corrupted politicians forever and bring new (not the followers of old one) visionary leaders. Total inclusiveness of all ethnic groups can also play the major role in bringing the country to the right track.
dalitdal says:
Indian dalits convert to buddhism hoping for some equal rights I think nepali dalits voted maobadi for the same great motivation.
Equality is good. stuff hinduism. And its APARTHEID how can they refuse a glass of water to someone.
holy creeps.
Paschim says:
I just wonder what a fatalism is it that some country blesssed with resources and are rich without doing anything or good leadership while some are so poor despite good leadership only because nature granted too much!!!!! Arab and Quatar and so rich by oil…some rich by diamond and other ores…some rich for having coast that gives cheap navigation and transport…so this is irony……like god makes some person brilliant and dull, some clever, some idiot, some die soon some late, god also made countries accordingly….This is fatalism.
But this is also not everything…We can do better than present…As Wagle also wrote, geography is not everything as some countries have same geigraphy but are rich and poor….Leadership and Governance also countes…Good job Mr. Wagle….
Miky says:
Good writing drawing upon fatalism and how geography affects total economy and lives of people…Jeffrey Sachs is the greatest living economist and he has given us fascinating facts form his genious works…i wish i was in Harvard and now Colombia University listening his lecture….
lalit says:
Well parked piece of mind. I think people only read the last paragraph where Prithivi narayan shah was mentioned. And which is very true, only if shah dynasty had known the other tricks of trade beside Tibet… It is like a crime these days to mention the kings. No one can dispute the fact that our country's discouraging geography has almost every thing to do with our poor economy. Well written article.
Ram krishna wagle says:
No doubt geography has betrayed us a little in this regard. But as some examples above, some good leadership and great vision can take us anywhere we want. Well written fren.
Samyam Wagle says:
Thanks guys for agreeing with me and understanding what i am actually trying to say. I find this exceptionally unusual in blogs that people just add negatives and unwanted things as for them, Blog is the cheapest medium to add their names and rubbish and who can't provide substantical feedback and suggestions but simply criticize others!!!!!!
I would like to thank the other guys for understanding the theme and encouraging me. Thanks Paschim, Miky, Lalit, RKW, Tilak and others…..
samir says:
Dear Writer,
Every coin has two sides. You are free to select anyone and explain it's beauty. While there are other group of people who'd love to stick with the other side of coin. At the same time, there are people who grasp entertainment by creating chaos.
My dear, you need to understand that there can be all kind of people in this world. You can't just delete or dislike the views that u don't support. I simply don't agree with the way u just consent with those who rhyme with you. Grow up man , it's life. Don't just expect that there are only good persons and everyone wants to do good.
Just state ur opinions and let other write what they feel about it. Don't insist them to write what u don't like.
(Last sentence corrected)
Just state ur opinions and let other write what they feel about it. Don't insist them to write what u like.
naya ganatrantik nepal…maobadi shashan…thulo aswashan…hamro capacity tyahi ho…cursed by geography and leaders!!!!! Maoist will sell this nation…prachanda is already showing autocratic nature by warning Kantipur…why he opposing free media?????
UNO says:
who is this moron 'Nepali' challanging Jeffrey Sach?? Why not this article relevent to nepali context…we are land locked and with no access to sea and jeffrey advocates that such countries lag behind due to barriers to trade!!!
nepal ka narrow minded haru scholar banna khojjhan …adhyan ali pugya chaina…tyasai pui pui….
UNO-I think 'Nepali' makes a valid point. Sachs is a good thinker but does it really take a genius to figure out the disadvantages a land locked country has economically against those with large coastal areas? You don't need to be extremely bright to figure that one out, do you?
As Nepali points out what would be more interesting is why certain cultures, for eg like those of us Nepalis or Bangladeshis or Nigerians or Burmese fail so miserably to properly take care of our own people and countries. I've not read anything by Mr. Sachs, perhaps he has a view on this?
I think we're more limited by our mentality than our 'geography'.
y says:
Geography may place limitations (limited resources, landlocked etc.) but not to our extent. We may never have funds to put people on the moon but we can definitely make life that much more better for our citizens. Politics is the main factor – Brazil in 2002 was bankrupt and 6 years later its doing better (much better). They had all the resources and geography but without the right politics they faltered and now with a pragmatic leader they are back. It comes down to our politicians I'm afraid (as a sidenote even business leaders need to act respomsibly) – correct policies, curbing corruption, letting investments flourish with correct business laws is the way to achieve a better future for oir citizens.
So the Govt. finally acted on the need to increase fuel prices in Nepal. I know the increase is quite steep and the poor will be impacted the most but could the increase have been avoided? No.
I can see that the idiot UML is trying to make most capital out of this fuel increase. I myself was stuck in a jam caused by their protests for almost an hour, but I really felt sorry for the school kids and office goers as at least I was in the comfort of my own car. They just had to bear the brunt of it.
Instead of these political parties, they all do it, resorting to useless protests and disrupting everyday life why can't they come up with better suggestions or solutions? Nepalese politics must change-it's too cheap and disgusting at present.
These are all the superficial remark to say we are underdeveloped due to our mentality!!!! What is the devastating failure our leaders made over decades that made our country poor???? This is not due to mentality…may be part is ill governance…but face the facts…
If only we had water waves, this will make transport lot easier and people could buy for less price, increase export, engage in trade, get revenue etc. Look how Singapore who had nothing benefitted only from water trade and cargo!!!!
People don't understand the trade and economics theory and just blame others like they best…The blog will be best only if commentators use word like they are paying for it….anyway….guys understand the fact that it is same either there is Girija or Bill Clinton here…we won't have succeed astronomically even though best leader of world comes here….its not that…its the economy…GDP…resources…trade…etc….
Water transport has to be explored more seriously by getting the indian and Bangladesh govt. to let us use their rivers connected to ours for water transport. This way atleast goods can be transported upto certain key ports like narayanghat via river networks all the way from ports like Calcutta and Bangladesh at lower cost.
UNO-so you believe that all you need is the sea to become economically sucessful, and also that without it we are doomed forever even if we have the best goverment and leaders in the world? It's really interesting how some peoples brains work!
yes kirat….exactly…thats right…thats what i think…It may seem ridiculous…but thats true…
consider this in micro terms…in a family, a father may be very expert and his governance is good…but he spends lots of money in transport to commute from office to work or has to buy expensive food etc.. then less savings for other members to enjoy!!!
What to do with best leaders..when there is no incoming of revenue and resources???? As writer says, i am not saying that it all depends on geography..but it is more important than quality of leaders…..otherwise..think who is the best leader in Nepal???? How can he lift this nation when there is no such resource or mines or trades or exports with us…..
that is why people should understand bottom line befroe arguing…but blog is really cheap medium for any one to write from their decaying brains the rubbish ideas ever…..but i appretiate curiousness of Kirat Ji..
UNO-totally agree that being landlocked may prevent us from becoming an economic powerhouse like the US, Japan, UK, Germany etc and China and India now. I don't think anyone questions that logic and like I said it doesn't take a genius to come to that conclusion.
The point is that being landlocked does not prevent us from being economically much better off than we are today. Do you know that a country called Cambodia attracts 2 million foreign tourists a year? Do you know that a tiny country like Bhutan exports more hydro power than we do (we are supposed to have a potential of 83000MW)? Why can't we ramp up our tea industry to a level that of Darjeeling when we have the same geographical land and abundant labour? Why have our carpet exports fallen so drastically over the last five-ten years?Do you know that the universities in England generate revenue from foreign students worth over 3 billion pounds? Why when companies like Dabur invest in Nepal for re-export of their products to India do we strangle them with labour disputes and political instability. What happened to our centuries old position as a key trade route for goods coming to and fro from India and China? The seas and oceans of the world have nothing to do with these issues. What does Jeffrey Sachs have to say about these matters? I think you and Mr. S. Wagle should not look at geography as an excuse. And I definitely think you should not under-estimate the quality of good leadership vis-a-vis our geography.
samyam says:
Thanks Kirat for wonderful arguement…And do realise that i have not placed geography above leadership..i have proved this by giving instance of Germany and Korea…I agree with you….and that is what i am advocating…but thanks for your constant arguement with UNO and thanks to UNO too and other readers….
Hi Samyam-you're welcome. But on another note has anyone done a study on how certain cultures/cultural practices inhbit economic progress and how others help it – that is relevant to our Nepali culture? (Casteism is one) I know of studies about how the Puritan Christians philosophy of "Work is worship', 'Cleanliness is next Godliness' etc helped them progress economically very rapidly. But what is it in our Nepali culture that stops us from progressing further economically while the Bhutanese, who are worse off than us geographically, now have the second highest GDP in South Asia next to the Maldivians (who have nothing else beside tourism)?
HEllo Kirat,
sorry for the late response. Ya there are several works of scholars on culture effects on economy too. i remember one collection book called "Culture Matters". YOu can search in googlescholar.com and you will find heaps.
These facts are amazing and never raised before in Nepal as how geography and culture effects the economy!!! Bhutan is actually now ahead due to utilisaition of water resources while we are still clapping for political change. Political change comes and goes yaar. People clapped for all dictators in rise and clapped for all in fall!!! The thing is how will they utilise resources and implement plans to lift this impoversiehd nations…more later
great writing…very relevent for Nepal…loathers might not understand the genuine essence…but this is great…
bikura says:
i am immensely glad to read your indepth and such an articulate writing…..
some of the points u've discussed( like landlockedness, chatur(kinda selfish) neighbouring countries, least developed border neighbour etc.) r very relevant n true…..
but hares nai khanu parne situation pani chhaina….Nepal can do a lot in Tourism, hydroelectricity n natural resources like forests…
Nepal has become the victim of unstable politics n lacks the efficient government…now Maoists have come with high hopes n only time will tell how far they can keep up to their words of bringing 'chamatkari economic development' in Nepal.
once again a good writing…keep writing….just forgive those destructive critics but at the same time i hope u'll take into considerations of healthy critisms….
oh that was me hai samyam….Bijay
darklord says:
Despite all the criticisms, I like the article since the author has made a decent attempt to incorporate some empirical evidence to show that socialism will push Nepal further into anarchy and underdevelopment.
Someone has to tell these Maoists, even sane considered Baburam to stop talking about their ultimate being ushering socialism in Nepal. Good work, writer. Don't listen to these freaks who can do nothing but criticize.
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