“We make our friends; we
make our enemies; but God makes our next door neighbors”
– Gilbert Keith
Chesterton
India and China- referred to as the boulders between which Nepal
lies have grown on to become even bigger boulders – economic super powers of
the 21st century. With growth rates of over 8 percent on an average
over the past 5 years, both of Nepal’s neighbors have come out as champions of
economic growth and liberalization in the global economy. Having said all this,
Nepal, though intertwined in history, culture and economy since time immemorial
has yet to learn from its neighbors.
India – the country that Nepal shares a border of almost 1815 km has
been a life-line for Nepal since a long time. Nepal imports almost 57.5 percent
of its consumables from India including necessities such as petroleum,
medicines, textiles and agro-products to relatively luxurious items such as vehicles.
India has been helping Nepal with major development projects in areas of
infrastructure (roads and hydro-power), health (hospitals), and trade
(joint-ventures); yet there seems to be a sense of animosity among general
public as well as political parties when it comes to its neighbor. The basic
instinct of detestation lies deep rooted among Nepalese as well as the people
representing them. The constant derogatory notions of speech and expression
used by Nepalese as well the political parties might or might not have sound
reasons behind it but whatever the reasons might be, it is without any doubts
that one has to accept that without Indian support, Nepal’s aim of developing
will delay by years at the minimum. Political
up rise on economic agendas have over shadowed and scared away Indian FDIs out
of the country which will now take an enormous effort to get back.
Similarly, China, with which Nepal shares a border of 1415 km has
taken the world by storm with its impressive growth rates over the years. Every
country in the world has in some form or the other invested into China and as
the famous expression goes, god made man
but everything else is made is China, gives us a hint on the economic power
that China has become. With Deng Xiaoping embracing liberalization, The Sleeping Giant has worked on to
become a $5.8786 trillion dollar economy. Historically
Sino-Nepal ties, foreign and economic relations have been accounted for
around the 7th century. With such a long history of relations,
Nepal-China relations have always been areas of interest for both the parties
involved. Even today the economic ties
of the two countries is reflected by the growing percent of import-export which
was only Rs.0.55 billion in 1995/96 and grew onto over a billion in 2009/10
(import) and Rs. 4.1 billion share in total export in 1995/96 which grew to
39.2 billion in 2009/2010. With growing interest of China in Nepal in the
South-East region, major projects of infrastructure developments, medical
facilities and many tied and untied loans and funds coming to Nepal from China,
it is without a doubt one needs to accept the fact that Nepal will have to
maintain friendly ties with the great giant. A major factor that distinguishes
Sino-Nepal relations with that of Indo-Nepal relations is the fact that,
Chinese investment in Nepal has been more focused on funding projects than FDIs
which in turn reflects on the next to none conflicts between the two countries
when compared to that of the Indian investments. This seems to be changing though
with growing interest from China to invest in Nepal in areas of hydro-power
which indeed in a positive sign.
Nepal, despite having two economic giants as neighbors, what is
appalling is Nepal’s unwillingness to learn from its neighbors the lessons on how
to raise a country from adverse poverty into a vibrant economy. While the rest
of the world preaches and practices liberal, market driven economy; Nepal
shunts opportunities through presenting itself as a politically unstable,
investment hostile country. While the country suffers, the government mulls
over increasing government interventions; lack of private sector friendly
policies; pushes forward agendas of supporting government investments into
industries, corporations, social welfare; and last but not the least does
nothing to promote FDIs from coming in the country. Political parties and the
mindset of the general public also does not help in inviting FDIs especially
from our neighbors with accusations against them of interfering in Nepal’s
internal affairs albeit how true these accusations actually might be.
With investment interests growing from both of Nepal’s neighbors,
the only thing logical is to grab these opportunities. Though easier said than
done, Nepal has to extensively prepare its economic policies to welcome FDIs
into the country if it wishes to develop. Announcement of the Nepal Investment
Year might be one of the steps required but a lot more has to be done yet. It
should be able to learn lessons from its neighbors; that of open market
policies, competition and privatization. Both India and China have been able to
attract large FDIs because they considerably improved their credibility to
investors and their commitment towards investment has also been praise worthy.
If indeed Nepal wishes to develop, it has to first and foremost set the tone
correct with Indian and Chinese investors and commit to protecting their
investment. Among all the things that need to be improved, the attitude of
detestation for Indians and Chinese has to go. One has to understand and
respect the long and intertwined history that the three countries have and the
fact that Nepal has indeed been placed by virtue in middle of the two super
powers of the 21st century and it has nothing but to gain from the experiences
of the two countries which might actually be a god-given gift as Mr. Chesterton
rightly said.
