-- By Ashok Kumar Temani
A self-reliant economy in today’s age of globalisation must mean well-balanced trade. The supply of each and everything domestically is neither practical nor possible. A hundred per cent self-reliant economy is just imagination. However, by a self-reliant economy, one may mean striking a good balance between exports and imports. If several countries in the world can strengthen their economies through a balance between export and import, there is no reason we cannot do the same. This is perhaps what the phrase “self-reliant economy” included in the new constitution means.
There are certain sectors in Nepal where we can be self-dependent. We should carry out feasibility studies for our mines and excavate the mines already identified. We haven’t been able to tap our vast water resource. We can diversify our agriculture as our climate is diverse. For this to happen, the government should subsidize modern technology and equipment. The farmers should be encouraged to use this technology. The subsistence-based agriculture system must turn into an industry. It’s a bleak irony in that, despite being an agriculture-based economy, Nepal has to import agricultural produce worth billions every year. Such a situation must come to an end. The possibilities in tourism remain underused. The country has the potential to be self-reliant in tourism-based industries and manufacturing industries, education, health and software. But we haven’t been able to realise this potential.
Nepal enjoys trade benefits from the stable currency exchange rate with India but the point is our import–export ratio has reached 10:1. And the gap between export and import is widening. We can lower our trade deficit with India by exporting electricity. For this, sufficient homework is needed. If we can generate and export a significant amount of electricity, that will not only lower our trade deficit but also help prevent situations like the current blockade by India. Nepal should attract Indian investment in manufacturing even if that means giving certain incentives and concessions to the investors. If we can invite a significant amount of Indian investment, India will think twice before taking a drastic measure against Nepal, like the current blockade.
Today, some people are talking about expanding our trade destinations and going for trade diversification. But Nepal’s trade with other countries like China is not as easy as that with India. Because of the geographical difficulties. Goods cannot be imported from China at competitive prices. Trading with the southern neighbour is easy because of an easy access to the sea and other trade-related infrastructures. But we can export food stuff to China’s Tibet and import traditional goods from there. However, importing daily consumable from Tibet will be expensive.
The government should devise appropriate policies to achieve self-reliance. Take India, for example. India has been able to make exemplary progress within a short period and is today among the top 10 economies of the world. Almost all global brands are present in the Indian market today. Self-reliance cannot be achieved by just talking about it. It’s an irony that we talk about becoming a self-reliant economy in times of crisis like the present one but we forget everything once the situation starts becoming normal. We should discourage the import of luxury goods. The consumption of luxury items plays a major role in increasing our trade deficit.
The government should form an economic development board with participation from the ministries of finance, industry and commerce and supplies. Such a board should have equal representation from the public as well as the private sector. The government should implement the decisions of this board. This would make our journey to economic self-reliance easier.
All that the private sector needs is encouragement and an environment of trust. A change in the government’s attitude towards the private sector is a must. We should not politicise the economic issues. The manufacturing and trade sectors should be kept free from all kinds of strikes and protests. The current exodus of Nepali youths must be brought to an end. We should be able to create 50,000 new jobs every year. For this, we need to invest hugely in productive and infrastructure development sectors.
The author is an FNCCI executive committee member.