Secrets of Prosperity

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Secrets of Prosperity


Recently when I entered the Pilgrim's bookshop, the store-manager was waiting for eye contact. As soon as I was through putting my bag at the gate, he approached me with a smile and greeted me with folded hands. I had gone there to buy only one book. But this greeting together with the soothing environment of the store - the colour combination, aroma and music - made me buy four more. This is what customer service excellence boils down to; this is what every business should strive for; this is what Nepal must emulate to attract large foreign investment.  

Shashindra Shrestha, director of Nebico Industries is fond of retelling this anecdote. "Once at a Singapore airport counter, I realised that I had left my passport in the taxi along with the handbag that had my money. I was about to rush to the police to report it when the taxi-driver came running towards me with my handbag in his hands. After getting the bag, I asked him why he was so prompt in returning the bag, in his reply he crossed his hands on his wrists indicating handcuffs and said he would be put behind bars if he did not do so. In fact, this is one of the reasons why that country developed so fast. You can trust its people."  

In developed countries, trust is not an individual choice. Instead it is mandatory and institutionalised: it is not an exception, it is a rule.  

Many people are unanimous in saying that there is much in common between Nepali and Indian politics. They are right but only to a certain extent. Politicians in both the countries fight like dogs for the chair. However, the similarity ends here. There is two-digit rate of economic growth in India while it is a snail-paced one in Nepal. What lies behind this? India is careful not to change its long-term economic vision, policies and agreements no matter which party comes to power. In Nepal we have no qualm about changing our positions. One latest example: the new government has dropped the Melamchi project. It might be a politically good move, but in terms of economics it is equivalent to a tsunami, sending shock waves over many years ahead, and discouraging foreign investors.

Adam Smith's book Wealth of Nations is said to be the ideological foundation of developed economies. Many Nepali scholars have been trained on the ideas of Wealth of Nations, yet the impact here has been negligible. Reasons could vary from politics to culture. But both politics and culture have changed tremendously also in developed countries from the days of Smith. Then, why doesn't the ‘invisible hand’ work here as effectively as it does in the West, in East Asia and now in China? What new economic model will transform Nepal?  

There is a deep rooted problem that stands in the way when any pundit in economics tries to implement his carefully designed plans. This very problem will prevent any significant rise in the per capita income of Nepal. Many people say it is because Nepal is a land cursed by a Sati? Remember the account found in history books about how Bhimsen Thapa was forced to commit suicide in captivity. According to this account, Thapa's wife offered herself as Sati on the funeral pyre of her husband and cursed Nepal. However, has not such injustice taken place in America? Of course it has. The ancestors of many present day Americans. slaughtered Indian Americans. In Europe, around 6 million Jews were the victims of genocide during World War II. In Russia, Stalin murdered anyone who opposed him or even thought about it. The number amounted to millions. Yet are not these countries more developed than ours? What has the virtues and sins of ancestors got to do with economic prosperity today?  

Some people point out that we are underdeveloped because we are landlocked. But so is Switzerland. We are small. But so is Singapore. We have no fossil-fuel reserve. Similar is Japan's case. We have too much social diversity. So has Russia. We don't have well-wishing neighbours. Same can be said of Kuwait. There is political instability.  So is the case in Sri Lanka. We never been colonised. Neither were Korea and Thailand. There is plenty of corruption. It is worse in Indonesia. So, what is the cause of our slow economic progress?  

The root cause lies in kama-artha-moksha, the three foundations of any society as told by our scriptures. A society founded on kama means all its activities revolve around pleasure. A society founded on artha means all its activities are directed towards financial gain. A society founded on moksha means all its activities are driven by desire of liberation from earthly bondage. Even though, on the surface, all these three types of societies may look alike, they operate under totally different cosmic laws. It is like the force of gravity which is different on the Earth, the Moon and the Mars. These laws in turn determine the consciousness of the masses which influences the purpose of their lives, the activities they engage in, the legacies they leave behind and the outlook of that society in its totality. This cause effect chain, when allowed to repeat itself over thousands of years, results in some countries where the people are materially rich but spiritually poor, in others where they are spiritually rich and materially poor and yet in others where they are the connoisseurs of the finest arts. Then, like fashion, one type of society becomes more in vogue than the other and people start to question: “Why can't we be like them? They seem so happy.” You got the theoroy, now let me illustrate my hypothesi with some  examples.

Nepal and India were two societies based on moksha. The sense of piety is very high here. Wealth is considered the root of all evil and there were many kings who renounced everything to search for liberation. Our greatest thinkers, whom we know as the yogis and rishis, were too busy building roads in the spiritual realm rather than creating physical infrastructures, educating the masses and creating material wealth. Even today, as a society, we are not sure if wealth is really what we want.

Europe and later America were two societies based on artha. There the rich and the powerful are venerated like gods. They take the stature of our yogis and rishis. Wealth was the foremost priority. When England realised that there was no more wealth to be created on its soil, it sought out to colonise Asia and Africa. Most of us have been duped into thinking that it was solely through Mahatma Gandhi's effort that India got its independence. Many think otherwise. The British had milked the cow long enough, and the cost of maintenance was too high. It was like venture capitalists selling off their shares after having taken as much as they could from the venture. Thousands of years in the wealth mentality leading to insurmountable entrepreneurail spirit and a canvas with ample resoures, has made the New World into the powerhouse of USA we know.

For those in Europe, the US and now in East Asia as well as China, the formula of getting rich is simple:
1.    Identify an unfulfilled need
2.    Create a demand  
3.    Supply  
4.    Take a margin  
5.    Invest the accumulated profits and repeat the process from (1)  

The East India Company did the same and even caused what is known as the Spice War. It was a time when the British people were willing to barter spices from Asia with gold. My friend David Carpenter used to say, "Don't be surprised. I'd have done the same.  so happy.” You got the theory, now let _ Imagine eating your food with only salt and pepper.  Yes, not very tasty.”  Bill Gates too used this simple formula to build his empire. In Nepal too, many have followed this simple formula.  Binod Chaudhary did it with Wai Wai. In India, Tata did it with vehicles and heavy machinery. The list goes on.

There are some exceptions but look at the formula that a majority of Nepalis use to become rich:
1. Go to the temple and make offering of goats, chickens and ducks
2. Take fasts  
3. Serve the king and receive gifts (baksish) from him.  
4. Give alms to the poor  
5. If your wish (bhakhal) is fulfilled, repeat the same process from (1)

Now you tell me what is wrong in this. It won't take Einstein's brainpower to figure this out. Majority of our people are not oriented towards economic prosperity. This is because we have been conditioned for thousands of years on the path of moksha.  Nations that are based on kama are France, Thailand, Brazil to name a few. Look at their numerous arts, their passion for life.  

In this way, different societies evolved on very different frequencies. Smith's theories on the creation of wealth worked in places that shared similar values and belief systems to his place and time. However, in Nepal we will need a different approach to economic well-being. The hints to that approach are in my earlier examples.

What we need is to start by building an environment of long-term visioning (comparison between Nepali and Indian politicians), mutual trust (Shashindra and Nebico), and customer-orientation (Pilgrim's). Only then will the ‘invisible hand’ of market forces be able to act effectively.  

Customer-orientation: I was surprised when a shopkeeper treated me like a king when buying a dress for myself. He was young and exhibited every sign that customers mattered to him the most. He was not a Marwari, he was just a Chhetri boy. There was a time when waiters used to be shy to greet Nepali guests but felt it natural to salute foreigners. That is changing. However, customer culture is still in its infancy in Nepal. In a workshop with about 50 teachers, we had a game in which we had to vote how we viewed students: (a) children, (b) plants, (c) raw clay, and three and about five opted for the last one. Then followed a heated debate.  not understand, even conceptually, how students could be viewed as customers.

Mutual Trust: Black-listed debtors do not only give tension to banks or individual lenders, they create a state of paralysis in the economy by erasing every form of mutual trust between borrowers and lenders.  entrepreneurs had come up with some novel ideas, pooled funds from banks, investors, and then paid back? The cycle of trust would have been re-enforced. That is what developed nations focus on the most. Investors can trust their government that agreements won't be breached at all costs. All this is possible because they have institutionalised trust. For example, contractors have to sign documents saying that if they don't complete a project within the given time (by complying with all quality measures), they will pay fines for every day of the delay. Try this policy with Nepali contractors or with our tailors! I was surprised to read that even during Smith's time private loans were made at the rate of about 6% per annum whereas in Nepal even in this time of cash surplus it works out to a hefty 24 per cent p.a. The reason given was that the courts of justice in England during Smith's days guaranteed even risky loans. Here not even banks can sue bad debtors and hope to get their money back.  

Long term vision: I wonder if our failure to have long term vision has anything to do with our capital being surrounded by mountains. Maybe this physical status has influenced our psychological status too. However, we must decide what sort of destiny we are going to pursue. The present days - are the best suited for such decision as trickiest of the political problems almost settled. The long term vision need not be limited to positioning Nepal as the most favoured tourist destination, or as a centre for cheap labour, or as the land of herbal medicines like Yarchagumba, or as an exporter of hydro-power or simply as a production factory of cheap labour for Malaysia or the Middle East and of doctors, engineers) for the US, Australia or the UK. We should think from the future and formulate the visions that inspire and unite.  

Only after we come in terms with our own limitations in kama-artha- moksha standings and focus on the above three logical groundworks, can we really think of economic prosperity. Steve Morris used to tell me, "Go back to your country and tell them not to copy the US economic model. It has robbed us of happiness, brought diseases and turned us into machines of consumption. Asian countries like Singapore and Hong Kong have emulated us, and they too are showing the same symptoms of spiritual the rate of about 6 per cent per annum —  emptiness as us. It doesn't have to be this way. There must be a better model of economic development. Don't focus only on increasing GNP (Gross National Production), also focus on GNH (Gross National Happiness).”

Maybe our lack of success in progressing economically is a call from our collective consciousness that we should take all three-- kama, artha and ' moksha-- together from this point     forward. If you try hard but still don't succeed, as a wise man you will question your deeper self and make the necessary changes, won't you?'  

(Shrestha is Senior Trainer & Advisor of Standard Icon Pvt. Ltd.)

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