'High AIDS rate in Nepali sex workers returning from India'
You won’t find a chapter on prostitution in most economics textbooks.
Prostitution as an industry is full of economic puzzles: Prostitutes are low-skilled, but highly paid.
Why is prostitution more common in poor countries?
One obvious explanation is that prostitution falls as women’s income and opportunity costs rise. What’s less obvious is that prostitution falls as men’s income rises, too.
Why does that happen?
prostitutes being what economists call an inferior good. As income rises men prefer stable marriages over occasional hookers. And this has policy implications: the best way to reduce prostitution may be making both women and men richer, rather than legal penalties and informational campaigns.
Why is prostitution more common in areas with high migration?
one cost of being a prostitute is reduced value in the marriage market. Most guys won’t marry ex-hookers. Prostitutes can avoid this cost by hiding the fact that they’re prostitutes. Frequent migration helps do that, by avoiding a social reputation. And that’s exactly what we see
foreign prostitutes are cheaper in places where both exist—they’re the low-cost producers of prostitution.
CHICAGO: A study of Nepali women trafficked to India and forced into the sex trade found that nearly 40 percent of them were HIV positive by the time they were repatriated, US researchers said on Tuesday. The findings come from a small study of 287 women who found their way home after years of sex slavery in India's brothels, but they underscore the challenge facing public health authorities as they battle to contain India's HIV epidemic and prevent it from spreading throughout the region. "The high rates of HIV we have documented support concerns that sex trafficking may be a significant factor in both maintaining the HIV epidemic in India and in the expansion of this epidemic to its lower-prevalence neighbors," said Jay Silverman, Associate Professor of Society, Human Development, and Health at Harvard School of Public Health. India has 2.5 million people living with HIV/AIDS, more than any other country in the world except South Africa and Nigeria, and is also a major hub for sex workers from across the region, such as Nepal and Bangladesh. Nepal has traditionally had very low rates of HIV/AIDS infection, but thousands of Nepali women and girls are trafficked to the Indian subcontinent every year where they wind up in the sex industry. What's more, one more recent study found that the number of infected sex workers in Nepal increased 24-fold in the decade from 1992 to 2002, a trend that experts say is probably reflected in the wider population. While World Bank officials have warned that the cross-border sex trade presents a potential public health threat to Nepal, there has been very little data to show what's happening on the ground. The authors of this study found that 38 percent of the returning women and girls tested positive for the HIV virus, and that infection rates were sharply higher among the youngest in the group. Girls aged 14 and under were four times more likely to be HIV-positive than the women in the group as a whole. More than 60 percent had the virus that can lead to AIDS - Acquired Immune Deficiency Syndrome. The higher infection rates probably reflect the fact that the Indian men who frequent brothels tend to prize younger girls, who are often presented as virgins, because they perceive them as less likely to be infected with HIV or other sexually transmitted diseases, the authors said. The widespread myth that having sex with a virgin will cure such illnesses probably also factors into the equation, they added. Biologically, these teens and pre-teens are also more vulnerable to suffering tears and lesions during intercourse which also increases the risk of transmission. Unfortunately, as a result of their popularity, brothel owners tend to keep these younger girls in captivity for longer - and the longer a girl is involved in prostitution, the greater her risk for contracting HIV, the Harvard researchers said. More broadly, the women who worked in several brothels, and specifically in brothels in Mumbai, a city with a notable HIV/AIDS problem, were more likely to be infected. This study did not track what happened to these women after they made it home, but the fear is that these former sex workers may end up prostituting again, and spreading the infection, because of the lack of support services back home, and because they cannot go back to their families due to the stigma around prostitution. "They are coming back to one of the poorest countries in the world where they are particularly ostracized," said Silverman. The study appears in the Journal of the American Medical Association.
STOP WOMEN Trafficking ...................There are currently an estimated 200,000 women and girls missing in Nepal, believed to have been trafficked to India - either 'sold' by their teachers, neighbours or families, or lured by the promise of good, legitimate jobs which turn out to be forced prostitution.....................................
MAKE A CHANGE
Tuesday, July 31, 2007
Five Lies My Economist Told Me
Economics prides itself on being the most scientific of the social sciences. Yet the X and Y axes can’t always capture globalization’s unpredictable turns. In this week’s List, FP looks at five ways in which the world economY
High productivity and low unemployment make us all better offy is pushing economists to think outside the box.
The orthodoxy: Economic theory does not guarantee that wages will reflect productivity in absolute terms, but most economists think that productivity-spurred growth will eventually increase everyone’s pie. Northwestern University economics professor Robert J. Gordon characterizes this view as, “productivity is the seed that creates the flower of a nation’s standard of living.”
Heretical facts: Despite six years of sustained growth, with unemployment averaging around 5 percent, the median U.S. worker is not faring well. Since 2001, middle-class Americans have seen their pay drop by 4 percent, although labor productivity went up by 15 percent during the same period.
Moral: Economists are still scratching their heads. Some labor economists point an accusatory finger at immigration. More of the foreign newcomers now hold advanced degrees, these economists argue, and native white-collar workers are no longer safe from cheap competition. Other economists point out that since China, India, and Russia joined the free market, the global supply of labor, including engineers and scientists, has quadrupled, pushing down wages. On the other side of the argument, the Peterson Institute for International Economics points out that globalization yields the United States around $1 trillion annually—or roughly $9,000 per year for every American household. Globalization skeptics, however, say that money is not making it into people’s pockets.
It’s hard to grow without good banks and private property
The orthodoxy: Economic growth requires a functioning banking system, solid property rights, and minimal state interference in the economy.
Heretical facts: One word: China. The gross domestic product of this Asian giant has increased sixfold between 1984 and 2004, with a stunning average growth of roughly 9 percent since 2005. Yet only in 2007 did the protection of private property acquire equal footing in Chinese property law. Moreover, experts still deem China’s banking system to be shaky despite a major overhaul that started in 2002. Harvard political economist Regina Abrami observes that the state has played a key role in the economic takeoff of the Chinese dragon. China’s township and village-owned enterprises—a curious mix of private initiative and government incentives—were for years at the heart of the country’s economic renaissance. And despite limited access to bank credit, China’s private sector has also thrived.
Moral: Growth happens—even when the market institutions that economists deem essential are not fully in place. Will China’s growth last? Nobody knows for sure, but many analysts have been arguing for some time that—as World Bank economic advisor Harry Broadman puts it—“the chickens could come home to roost, especially in the unreformed large, backbone, state-owned enterprises and banks,” precisely because of weaknesses in China’s underlying market institutions. For Broadman, the large scale of China’s internal market has been a key factor that has allowed the economy to prosper despite “fuzzy property rights.”
Capital must always be let free to flow
The orthodoxy: It keeps changing. Under the global financial architecture put in place soon after World War II, governments and multilateral institutions were to put some checks on where the money was going. But by the late 1950s, advocates of unfettered capital mobility were winning the argument, and under the so-called “Washington Consensus,” the U.S. Treasury Department and the International Monetary Fund recommended that developing countries lift restrictions over international movements of money.
Heretical facts: The Asian financial crisis. Starting in 1996, overvalued real estate prices collapsed in Thailand, spurring a devaluation of the Thai currency. Soon enough, the contagion spread to nearby Malaysia, Indonesia, and South Korea. Capital flight triggered painful recessions in most of East Asia. Only China and Taiwan, which had maintained tight capital controls, weathered the crisis unscathed. Malaysia split the difference by introducing capital controls in 1998, a last-minute attempt to avoid the worst.
Moral: Even though the jury is still out over the success of the Malaysian experiment, the Asian financial crisis was like a cold shower for enthusiasts of free capital mobility. Most economists now agree that letting the money flow is good, but only when the proper institutions and regulations are in place.
The euro will never work
The orthodoxy: When, in 1992, 12 European heads of state gathered in Maastricht, the Netherlands, to announce the coming of a unified European currency, more than a few economists scorned them. History, wrote Nobel Prize winner Milton Friedman in the Wall Street Journal in 1995, had repeatedly shown that fixed exchange rates are simply a bad idea for “a group of large countries with independent political systems and independent national politics.”
Heretical facts: In January 2002, the euro made its entrance on the world stage and into the wallets of the citizens of 13 European countries. Five years later, it is still alive and healthy—stronger than the U.S. dollar, in fact. And despite grumbling from countries like Italy, where policymakers wish they could still boost exports by devaluing the old lira, nobody is seriously considering going back to single national currencies.
Moral: In a sense, the critics were right. One size does not fit all, and Europeans keep quarreling about where their centralized monetary policy should go. But the critics also missed the point. As Harvard political economist Rawi Abdelal explains, “The euro was not an economically motivated enterprise; its reasons to be were and are mostly political.”
Japan—no wait, China—is going to take over the world economy
The orthodoxy: Japan’s rise heralded the United States’ decline. In the mid-1980s, many economists looked at the Japanese economy—with its current account surplus, rising exports led by heavy car sales, and strong currency—and predicted dire consequences for Uncle Sam. Western analysts fretted over the United States’ ever-widening current account imbalance, decried the laziness of the U.S. worker, and lauded the efficient work ethic of the Japanese.
Heretical facts: As of 2007, the United States is still the greatest capitalist economy in the world, with a gross domestic product roughly three times as big as that of Japan, the world’s second largest economy. True, Japan’s car industry is still a rising star: Toyota briefly overtook General Motors a few months ago as the world’s largest automaker. Yet, as Newsweek columnist Fareed Zakaria put it, the Japanese “ran into a brick wall.” After more than 15 years of economic stagnation, repeated currency deflations, and record-high unemployment, the Japanese economy is just now coming out of the doldrums.
Moral: A rising tide lifts all boats. If Japan didn’t put Uncle Sam out of business, maybe China won’t, either. Martin Baily, a senior fellow at the Peterson Institute for International Economics, notes that for every Chinese worker, there is also a Chinese consumer joining the international market. What’s more, as Chinese salaries inevitably rise, it will become harder for Chinese companies to undercut the competition.
India Rising
Messy, raucous, democratic India is growing fast, and now may partner up with the world's richest democracy—America.
By Fareed Zakaria
Every year at the World Economic Forum in Davos, there's a star. Not a person but a country. One country impresses the gathering of global leaders because of a particularly smart Finance minister or a compelling tale of reform or even a glamorous gala. This year there was no contest. In the decade that I've been going to Davos, no country has captured the imagination of the conference and dominated the conversation as India in 2006.
It was not a matter of chance. As you got off the plane in Zurich, there were large billboards extolling INCREDIBLE INDIA. Davos itself was plastered with signs. WORLD'S FASTEST GROWING FREE MARKET DEMOCRACY! proclaimed the town's buses. When you got to your room, you found an iPod Shuffle loaded with Bollywood songs, and a pashmina shawl, gifts from the Indian delegation. When you entered the meeting rooms, you were likely to hear an Indian voice, one of the dozens of CEOs of world-class Indian companies. And then there were the government officials, India's "Dream Team," all intelligent and articulate, and all selling their country.
The Forum's main social event was an Indian extravaganza, with a bevy of Indian beauties dancing to pulsating Hindi tunes against an electric blue Taj Mahal. The guests joined in the festivities. The impeccably dressed chairman of the Forum, Klaus Schwab, donned a colorful Indian turban and shawl, nibbled on chicken tikka and talked up the country's prospects with Michael Dell. INDIA EVERYWHERE, said the ubiquitous logo. It was.
And everyone now is in India—most significantly, of course, George W. Bush, who will arrive there on March 1. Jacques Chirac was there two weeks ago. (So was Bill Clinton, who can't stop returning to the country.) Two weeks before that it was Saudi Arabia's newly crowned monarch, King Abdullah. The week after Bush leaves, Australian Prime Minister John Howard arrives. And that's all in six weeks. The world—and particularly the United States—is courting India as it never has before. Fascinated by the new growth story, perhaps wary of Asia's Chinese superpower, searching to hedge some bets, the world has woken up to India's potential. But does it really know this complex, diverse country? Just as important, does India know what it wants of the world?
The marketing slogans wouldn't work if there were no substance behind them. Over the past 15 years, India has been the second fastest-growing country in the world—after China—averaging above 6 percent growth per year. Growth accelerated to 7.5 percent last year and will probably hold at the same pace this year. Many observers believe that India could well expand at this higher rate for the next decade.
While China's rise is already here and palpable—it has grown at almost 10 percent since 1980—India's is still more a tale of the future, but a future that is coming into sharp focus. A much-cited 2003 study by Goldman Sachs projects that over the next 50 years, India will be the fastest-growing of the world's major economies (largely because its work force will not age as fast as the others). The report calculates that in 10 years India's economy will be larger than Italy's and in 15 years will have overtaken Britain's. By 2040 it will boast the world's third largest economy. By 2050 it will be five times the size of Japan's and its per capita income will have risen to 35 times its current level. Predictions like these are a treacherous business, though it's worth noting that India's current growth rate is actually higher than the study assumed.
Even the here and now is impressive. Indian companies are growing at an extraordinary pace, posting yearly gains of 15, 20 and 25 percent. The Tata group, the country's largest business house, is a far-flung conglomerate that makes everything from cars and steel to software and consulting systems. In this sense, it is a useful window on India's industrial and postindustrial economy. Its revenues grew last year from $17 billion to $24 billion and it is heading for extremely strong growth this year. At another end of the scale, the automobile-parts business is made up of hundreds of small companies. Five years ago the industry's total revenues were $4 billion. This year they will exceed $10 billion. In 2008, General Motors alone will import $1 billion of auto components from India.
That's outsourcing—as it is any time an American company buys goods or services from abroad. It's also called trade or globalization or capitalism. Those who want to stop it—and it's not clear how you could do that—should remember that the United States' prosperity has come from its very willingness to open itself up to the world. Over the last 60 years, manufacturing employment in the United States has plummeted as those industries went abroad—and yet average American incomes have risen to be the highest in the world. Over the last 20 years, as globalization has quickened, American companies have outsourced first goods, then services—and American incomes have risen faster than those of any other major industrial country. Banning auto-parts factories or call centers will not save General Motors. Globalization highlights some problems for America, but the solutions are all at home. As they have in the past, Americans must—and can—make goods and services that people will pay for freely, not because the government forces them to by shutting out the competition. That is the only stable path to economic security.
At this point, anyone who has actually been to India will probably be puzzled. "India?" he or she will say. "With its dilapidated airports, crumbling roads, vast slums and impoverished villages? We're talking about that India?" Yes, that, too, is India. The country might have several Silicon Valleys, but it also has three Nigerias within it, more than 300 million people living on less than a dollar a day. India is home to 40 percent of the world's poor and has the world's second largest HIV population. But that is the familiar India, the India of poverty and disease. The India of the future contains all this but also something new. You can feel the change even in the midst of the slums.
To new visitors, it won't look pretty. Many Western businessmen go to India expecting it to be the next China. But it never will be that. China's growth is a product of its efficient, all-powerful government. Beijing decides the country needs new airports, eight-lane highways, gleaming industrial parks—and they are built within months. It courts multinationals and provides them with permits and facilities within days. It looks good and, in many ways, it is that good, having produced the most successful case of economic development in human history.
India's growth is messy, chaotic and largely unplanned. It is not top-down but bottom-up. It is happening not because of the government, but largely despite it. India does not have Beijing and Shanghai's gleaming infrastructure, and it does not have a government that rolls out the red carpet for foreign investment—no government in democratic India would have those kinds of powers anyway. But it has vast and growing numbers of entrepreneurs who want to make money. And somehow they find a way to do it, overcoming the obstacles, bypassing the bureaucracy. "The government sleeps at night and the economy grows," says Gurcharan Das, former CEO of Procter Gamble in India.
There are some who argue that India's path has distinct advantages. MIT's Yasheng Huang points out that India's companies use their capital far more efficiently than China's; they benchmark to global standards and are better managed than Chinese firms. Despite being much poorer than China, India has produced dozens of world-class companies like Infosys, Ranbaxy and Reliance. Huang attributes this difference to the fact that India has a real and deep private sector (unlike China's many state-owned and state-funded companies), a clean, well-regulated financial system and the sturdy rule of law. Another example: every year Japan awards the coveted Deming Prizes for managerial innovation, and over the last four years, they have been awarded more often to Indian companies than to firms from any other country, including Japan.This bottom-up activity is evident not simply among entrepreneurs. The Indian consumer is also rearing for action. Most Asian success stories have been ones in which the government forces its people to save, producing growth through capital accumulation and market-friendly policies. In India, the individual is king. Young Indian professionals don't wait to buy a house at the end of their lives with their savings. They take out mortgages. The credit-card industry is growing at 35 percent a year. Personal consumption makes up a staggering 67 percent of GDP in India, much higher than China (42 percent) or any other Asian country. Only the United States is higher at 70 percent.
Statistics don't quite capture what is happening. Indians, at least in urban areas, are bursting with enthusiasm. Indian businessmen are giddy about their prospects. Indian designers and artists speak of extending their influence across the globe. Bollywood movie stars want to grow their audience abroad from their "base" of half a billion fans. It is as if hundreds of millions of people have suddenly discovered the keys to unlock their potential. A famous Indian once put it eloquently, "A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends and when the soul of a nation, long suppressed, finds utterance."
Those words, which Indians of a certain generation know by heart, were spoken by the country's first prime minister, Jawaharlal Nehru, just after midnight, on Aug. 15, 1947, when independent India was born. What Nehru was referring to, of course, was the birth of India as an independent state. What is happening today is the birth of India as an independent society—boisterous, colorful, open, vibrant and, above all, ready for change. India is diverging from its past, but also from most other countries in Asia. It is not a quiet, controlled, quasi-authoritarian country that is slowly opening up according to plans. It is a noisy democracy that has finally empowered its people economically. In this respect India, one of the poorest countries in the world, looks strikingly similar to the world's wealthiest country, the United States of America. In both places, society has triumphed over the state.
The Indian state has been a roaring success on one front. India's democracy is a wonder to behold. One of the world's poorest countries, it has sustained democratic government for almost 60 years. And this is surely one of the country's greatest strengths when compared with many other developing countries. If you ask the question "What will India look like politically in 25 years?" we know the answer: like it does today—a democracy, probably with a coalition government. Democracy makes for populism, pandering and delays. But it also makes for long-term stability. (In case President Bush is looking for some answers for Iraq, he should recall that the British were able to stay in India for 200 years and built lasting institutions of government throughout the country, and that India got very lucky with its first generation of leaders. Men like Nehru may not have understood economics, but they deeply understood political freedom.)
If the Indian state has succeeded in one crucial dimension, it has failed in several others. In the 1950s and 1960s, India tried to modernize by creating a "mixed" economic model, between capitalism and communism. This meant a shackled and overregulated private sector, and a massively inefficient and corrupt public sector. The results were poor, and in the 1970s, as India became more socialist, they became disastrous. In 1960 India had a higher per capita GDP than China; today it is less than half of China's. That year it had the same per capita GDP as South Korea; today South Korea's is 13 times larger. The United Nations Human Development Index gauges countries by income, health, literacy and other such measures. India ranks 124 out of 177, behind Syria, Sri Lanka, Vietnam and the Dominican Republic. Female literacy in India is a shockingly low 54 percent. Despite mountains of rhetoric about helping the poor, by any reasonable comparison, India's government has done too little for them.
Is this a problem with democracy? Not entirely. Bad policies fail whether pursued by dictators or democrats. But there are elements of democracy that have hurt, certainly in a country with rampant poverty, feudalism and illiteracy. Democracy in India too often means not the will of the majority but the will of organized minorities—landowners, powerful castes, farmers, government unions and local thugs. (Nearly a fifth of the members of the Indian Parliament have been accused of crimes, including embezzlement, rape and murder.) These groups are usually richer than most of their countrymen, and they plunder the state's coffers to stay that way. It is ironic, for example, that India's Communist Party does not campaign for growth to lift the very poor but rather works to maintain the relatively privileged conditions of unionized workers. As these power plays go on, the great majority's interests—those 800 million who earn less than $2 a day—often fall through the cracks.
But democracy has its own way of rebalancing. The wave of Hindu nationalism that raged through the country in the 1990s is on the wane, for now, and a thoroughly secular government is in power. Headed by Manmohan Singh, the former Finance minister who opened up India's economy in the summer of 1991, it is also committed to economic reform. In an act of great wisdom and restraint, Sonia Gandhi, who led the ruling coalition to victory in the polls, chose to appoint Singh as prime minister rather than take the job herself. As a result, quite unexpectedly, India's chaotic and often-corrupt democratic system has yielded as its head of government a man of immense intelligence, unimpeachable integrity and deep experience. Singh, an Oxford Ph.D., has already run the country's central bank, planning ministry and Finance Ministry. His breadth, depth and decency are unmatched by any Indian prime minister since Nehru.
But Singh has disappointed many of his fans. They had hoped for another set of large-scale reforms, but the government has been cautious and is implementing programs that look suspiciously like another round of subsidies (programs that have had such little success in the past). These are the constraints of democracy. Singh heads a fragile coalition government without a strong mandate for economic change. He is not himself a powerful politician, depending on Mrs. Gandhi for his clout. But his quiet determination to keep moving forward—on economics, politics and foreign policy—has been underestimated. His Economic ministers are all reformers. They work within the political limits, but they work. For example, infrastructure in India is slowly getting better and will be funded through public-private partnerships. India's two major airports will be privatized and improve dramatically. Every week you read of a set of regulations that have been eased or permissions that have been eliminated. These "stealth reforms," too small to draw vigorous opposition from the unreconstructed left, add up. And India's pro-reform constituency keeps growing. The middle class is already 300 million strong. Urban India is not all of India, but it is a large and influential chunk of it.
Democracy is India's destiny. A country this diverse and complex—17 major languages, 22,000 dialects and all the world's major religions—cannot really be governed any other way. The task is to use democracy to India's advantage. In some cases this is happening. The Indian government has recently begun investing in rural education and health, and is focusing on ways to make agriculture more productive. Good economics can sometimes make for good politics, at least that is the Indian hope. Another change is that, since 1993, democracy has been broadened to give villages greater voice in their affairs. Most important, village councils must reserve 33 percent of their seats for women. As a result there are 1 million elected women in villages across the country. They will now have a platform from which to demand better education and health care. It's bottom-up development, with society pushing the state.
Will the state respond? Built during the British Raj, massively expanded in India's socialist era, it is filled with bureaucrats who are in love with their petty powers and privileges. They are joined by politicians who enjoy the power of patronage. And then there are some journalists and intellectuals who still hold on to some romantic idea of Third World socialism. There are many in India's ruling class who remain deeply uncomfortable with the modern, open, commercial society that they see growing around them.
But the state fills a vital role. Look at India's great success—its private companies. They flourish because of a well-regulated stock market and financial system that has transparency, adjudication and enforcement—all government functions. Or consider the booming telecommunications industry, which was created by intelligent government deregulation and re-regulation. Or the Indian institutes of technology—among the world's best—all government-run. But that's just a start. The private sector cannot solve India's AIDS crisis or its rural education shortfalls or its environmental problems. If India's governance does not improve, the country will never fully achieve its potential.
This is perhaps the central paradox of India today. Its society is open, eager, confident and ready to take on the world. But its state—its ruling class—is far more hesitant, cautious and suspicious of the changed realities around it. Nowhere is this tension more obvious than in the realm of foreign policy, in the increasingly large and important task of determining how India should fit into the New World.
Most Americans would probably be surprised to learn that India is, by all accounts, the most pro-American country in the world. The Pew Global Attitudes Survey, released in June 2005, asked people in 16 countries whether they had a favorable impression of the United States. A stunning 71 percent of Indians said yes. Only Americans had a more favorable view of America (83 percent). The numbers are somewhat lower in other surveys, but the basic finding remains true: Indians are extremely comfortable with, and well disposed toward, America.
This may be because for decades India's government tried to force-feed anti-Americanism down people's throats. (Politicians in the 1970s spoke so often of the "hidden hand" when explaining India's miseries—by which they meant the CIA or American interference generally—that cartoonists took to drawing an actual hand that descended every now and then to cause havoc.) More likely it is because Indians understand America. It is a noisy, open society with a chaotic democratic system—like theirs. Many urban Indians speak America's language, are familiar with the country and often actually know someone who lives there, possibly even a relative.
The Indian-American community has been a bridge between the two cultures. The term often used to describe Indians leaving their country is "brain drain." But it's been more like brain gain, for both sides. Indians abroad have played a crucial role in opening up the mother country. They returned to India with money, investment ideas, global standards and, most important, a sense that one could achieve anything. An Indian parliamentarian once famously asked the then prime minister, Indira Gandhi, "Why is it that Indians seem to succeed everywhere except in their own country?" The stories of Indians scaling the highest peaks in America have produced pride and emulation in India. Americans, for their part, have embraced India in some measure because they have had a positive experience with Indians in America.
Americans also find India understandable. They are puzzled and disturbed by impenetrable decision-making elites like the Chinese Politburo or the Iranian Council of Guardians. A quarrelsome democracy that keeps moving backward, forward and sideways—that they know. Take the current negotiations on nuclear issues. Americans watch what is going on in New Delhi, with people inside the government who are opposed to a nuclear deal leaking negative stories to the media, political opponents using the issue to score points, true ideological opponents being utterly implacable—and this all seems very familiar. Similar things happen every day in Washington.
Most countries have relationships that are almost exclusively between governments. Think of the links between the United States and Saudi Arabia, which exist among a few dozen high officials and have never really gone beyond that. But sometimes bonds develop not merely between states but between societies. Twice before the United States had developed a relationship with a country that was strategic but also much more—with Britain and later with Israel. In both cases, the resulting ties were broad and deep, going well beyond government officials and diplomatic negotiations. The two countries knew each other, understood each other and as a result became natural and almost permanent partners. America has the opportunity to forge such a relationship with India.
This is not a matter of strategic "balancing" against China. The world is not that simple. The United States should not create a self-fulfilling prophecy of a conflict with China. The American relationship with China is complex, with many elements of cooperation. China, after all, is one of America's chief creditors, and Americans in turn buy Chinese goods, fueling its growth. Nor will India want to play along as a counterweight to China, since its own relations with its powerful neighbor are crucial. Beijing will overtake America as India's largest trading partner within a couple of years. Both India and America will want to retain their independence in dealing with the Middle Kingdom. That said, the rise of China is the fundamental strategic shift that is altering Asia's—and the world's—landscape. And the United States and India will be glad to have each other's company in that circumstance.
This doesn't mean that the United States and India will agree on every policy issue. Remember that even during their close wartime alliance, Roosevelt and Churchill disagreed about several issues, most notably India's independence. America broke with Britain over Suez. It condemned Israel for its invasion of Lebanon. Washington and New Delhi have different interests and thus will inevitably have policy disputes. But it is precisely because of the deep bonds between these countries that such disagreements would not alter the fundamental reality of friendship, empathy and association.
Such a relationship between the United States and India is almost inevitable. Whether the nuclear agreement goes through or not, whether the governments sign new treaties, the two societies are getting increasingly intertwined. A common language, a familiar world view and a growing fascination with each other is bringing together businessmen, nongovernmental activists, journalists and writers.
I say almost inevitable because there are pulls against it on both sides. In America, there is always the danger that politicians will turn to populism and protectionism as a cheap way to get votes. So far the pandering has been limited and temporary, but as elections approach and politicians grandstand, it's always convenient to find foreigners upon whom to blame your ills. Additionally, Washington is still learning the art of treating other countries with the respect and deference they expect—and India can be prickly and proud.
But the real stumbling block to a deep Indo-U.S. relationship will come not from Washington but New Delhi. While Singh and some others at the top of the Indian government see the world clearly, and see the immense opportunities it opens up for India, many others are blinded by their prejudices. For many Indian elites, it has been comfortable and comforting to look at the world from the prism of a poor, Third World country, whose foreign policy was neutral, detached (and, one might add, unsuccessful). They understand how to operate in that world, whom to bargain with, whom to beg from and whom to be belligerent with. But a world in which India is a great power, in which it moves confidently across the global stage, and in which it is a friend and partner of the most powerful country in history—that is an altogether new and unsettling proposition. "Why is the United States being nice to us?" several such doubters have asked me repeatedly. Even now, in 2003, they were searching for the hidden hand. China's Mandarin class has been able to rethink its country's new role as a world power with skill and effectiveness. So far, India's Brahmins have not shown themselves the equals of their neighbor.
The danger for India is that this moment might not last forever. The world turns and India will have its ups and downs. But today it is India's moment. It can grasp it and forge a new path for itself. Along that road lies a genuine and deep relationship between the planet's largest democracy and its wealthiest democracy. Until now, this has merely been a slogan. It could actually become a reality, and who knows what such a world might look like?
How Long Will America Lead the World?
Queen Victoria's Diamond Jubilee, held in London on June 22, 1897, was one of the grandest fetes the world has ever seen: 46,000 troops and 11 colonial prime ministers arrived from the four corners of the earth to pay homage to their sovereign. The event was as much a celebration of Victoria's 60 years on the throne as it was of Britain's superpower status. In 1897, Queen Victoria ruled over a quarter of the world's population and a fifth of its territory, all connected by the latest marvel of British technology, the telegraph, and patrolled by the Royal Navy, which was larger than the next two navies put together. "The world took note," says the historian Karl Meyer. The New York Times gushed: "We are a part ... of the Greater Britain which seems so plainly destined to dominate this planet'."
An 8-year-old boy, Arnold Toynbee, who became a great historian, watched the parade while sitting on his uncle's shoulders. "I remember the atmosphere," he later wrote. "It was: well, here we are on the top of the world, and we have arrived at this peak to stay there—forever! There is, of course, a thing called history, but history is something unpleasant that happens to other people."
Well, Americans have replaced Britons atop the world, and we are now worried that history is happening to us. History has arrived in the form of "Three Billion New Capitalists," as Clyde Prestowitz's recent book puts it, people from countries like China, India and the former Soviet Union, which all once scorned the global market economy but are now enthusiastic and increasingly sophisticated participants in it. They are poorer, hungrier and in some cases well trained, and will inevitably compete with Americans and America for a slice of the pie. A Goldman Sachs study concludes that by 2045, China will be the largest economy in the world, replacing the United States.
It is not just writers like Prestowitz who are sounding alarms. Jeffrey Immelt, CEO of GE, reflects on the growing competence and cost advantage of countries like China and even Mexico and says, "It's unclear how many manufacturers will choose to keep their businesses in the United States." Intel's Andy Grove is more blunt. "America ... [is going] down the tubes," he says, "and the worst part is nobody knows it. They're all in denial, patting themselves on the back, as the Titanic heads for the iceberg full speed ahead."
Much of the concern centers on the erosion of science and technology in the U.S., particularly in education. Eight months ago, the national academies of sciences, engineering and medicine came together to put out a report that argued that the "scientific and technical building blocks of our economic leadership are eroding at a time when many nations are gathering strength."
President Bush has also jumped onto the competitiveness issue and recently proposed increases in funding certain science programs. (He has not, however, reversed a steady decline in funding for biomedical sciences.) Some speak of these new challenges with an air of fatalism. The national academies' report points out that China and India combined graduate 950,000 engineers every year, compared with 70,000 in America; that for the cost of one chemist or engineer in the U.S. a company could hire five chemists in China or 11 engineers in India; that of the 120 $1 billion-plus chemical plants being built around the world one is in the United States and 50 are in China.
There are some who see the decline of science and technology as part of a larger cultural decay. A country that once adhered to a Puritan ethic of delayed gratification has become one that revels in instant pleasures. We're losing interest in the basics—math, manufacturing, hard work, savings—and becoming a postindustrial society that specializes in consumption and leisure. "More people will graduate in the United States in 2006 with sports-exercise degrees than electrical-engineering degrees," says Immelt. "So, if we want to be the massage capital of the world, we're well on our way."
There is a puzzle in all this, however, which is that these trends and features have been around for a while, and they do not seem to have had an impact—so far at least—on the bottom line, which is GDP growth. Over the past 20 years, America's growth rate has averaged just over 3 percent, a full percentage point higher than that of Germany and France. (Japan averaged 2.3 percent over the same period.) Productivity growth, the elixir of modern economics, has been over 2.5 percent for a decade now, again a full percentage point higher than the European average. In 1980, the United States made up 22 percent of world output; today that has risen to 29 percent. The U.S. is currently ranked the second most competitive economy in the world (by the World Economic Forum), and is first in technology and innovation, first in technological readiness, first in company spending for research and technology and first in the quality of its research institutions. China does not come within 30 countries of the U.S. on any of these points, and India breaks the top 10 on only one count: the availability of scientists and engineers. In virtually every sector that advanced industrial countries participate in, U.S. firms lead the world in productivity and profits.
The situation with regard to higher education is even more dramatic. A new report, "The Future of European Universities," from the London-based Center for European Reform, points out that of the world's 20 top universities, 18 are American. The U.S. invests 2.6 percent of its GDP on higher education, compared with 1.2 percent in Europe and 1.1 percent in Japan. The situation in the sciences is particularly striking. A list of where the world's 1,000 best computer scientists were educated shows that the top 10 schools were all American. Our spending on R&D remains higher than Europe's, and our collaborations between business and educational institutions are unmatched anywhere in the world. America remains by far the most attractive destination for students, taking 30 percent of the total number of foreign students globally. These advantages will not be erased easily because the structure of European and Japanese universities—mostly state-run bureaucracies—is unlikely to change. And while China and India are creating new institutions, it is not that easy to create a world-class university out of whole cloth in a few decades.
The American economy is also particularly good at taking technology and turning it into a product that people will buy. An unusual combination of an entrepreneurial culture, a permissive legal system and flexible capital markets all contribute to a business culture that rewards risk. This means that technology is quickly converted into some profitable application. All the advanced industrial countries had access to the Web, but Google and the iPod were invented in America. It is this skill, as much as raw technological brain power, that has distinguished the American economy from its competitors'.
And then there are the demographics. The United States is the only industrialized country that will not experience a work-force or population loss in the coming decades, thanks to immigration. Germany and Japan are expected to see their populations drop by 5 and 12 percent, respectively, between now and 2050. China will also face a demographic crunch. By 2040, it will have a larger percentage of elderly people than the United States. The one-child policy has led to something that China's demographers call the "4-2-1 problem"— four grandparents and two parents will have to be supported by one worker.
The United States' share of the global economy has been remarkably steady through wars, depressions and a slew of rising powers. It was 32 percent in 1913, 26 percent in 1960, 22 percent in 1980 and 27 percent in 2000. With the brief exception of the late 1940s and 1950s—when the rest of the industrialized world had been destroyed—the United States has taken up about a quarter of world output for about 120 years and is likely to stay in roughly the same position for the next few decades if it can adapt to the current challenges it faces as well as it adapted to those in the past.
Don't get me wrong. Today's challenges are real and daunting. The world economy is more open to competitors than it has ever been. Countries around the globe are taking advantage of this new access, or to put it another way, the natives are getting good at capitalism. Technologies like broadband Internet, fiber-optic cable (which means cheap phone calls) and deregulated air travel have made it possible for people from Costa Rica, South Africa and Thailand to compete with Americans for their jobs. And China and India are different from all previous competition because their sheer size—2.3 billion people!—means that they have an almost limitless supply of low-skilled labor on the one hand and a fairly large group of highly skilled workers on the other, both extremely cheap by Western standards. No worker from a rich country will ever be able to equal the energy and ambition of people making $5 a day and trying desperately to move out of poverty.
So what should the United States do? What has it done in the past? First, be scared, be very scared. The United States has a history of worrying that it is losing its edge. This is at least the fourth wave of such concerns since 1945. The first was in the late 1950s, produced by the Soviet Union's launch of the Sputnik satellite. The second was during the early 1970s, when high oil prices and slow growth in the U.S. convinced Americans that Western Europe and Saudi Arabia were the powers of the future and President Nixon heralded the advent of a multipolar world. The most recent one was in the mid-1980s, when most experts believed that Japan would be the technologically and economically dominant superpower of the future. The concerns in each one these cases was well founded, the projections intelligent. But the reason that none of these scenarios came to pass is that the American system—flexible, resourceful and resilient—moved quickly to correct its mistakes and refocus its attention. Concerns about American decline ended up preventing it. As Andy Grove puts it, "Only the paranoid survive."
America's problem right now is that it is not really that scared. There is an intelligent debate about these issues among corporate executives, writers and the thin sliver of the public than is informed on these issues. But mainstream America is still unconcerned. Partly this is because these trends are operating at an early stage and somewhat under the surface. Americans do not really know how fast the rest of the world is catching up. We don't quite believe that most of the industrialized world—and a good part of the nonindustrialized world as well—has better cell-phone systems than we do. We would be horrified to learn that many have better and cheaper broadband—even France. We are told by our politicians that we have the best health-care system in the world, despite strong evidence to the contrary. We ignore the fact that a third of our public schools are totally dysfunctional because it doesn't affect our children. We boast that our capital markets are the world's finest even though of the 25 largest stock offerings (IPOs) made last year, only one was held in America. It is not an exaggeration to say that over the past five years, because of bad American policies, London is replacing New York as the world's financial capital.
The best evidence of this lack of fear is that no one is willing to talk about any kind of serious solutions that impose any pain on society. Politicians talk a great deal about competitiveness and propose new programs and initiatives. But the proposals are small potatoes compared with, say, farm subsidies, and no one would ever suggest trimming the latter to dramatically increase spending on the sciences. The great competitive problems that the American economy faces would require strong and sometimes unpleasant medicine. Our entitlement programs are set to bankrupt the country, the health-care system is an expensive time bomb, our savings rate is zero, we are borrowing 80 percent of the world's savings and our national bill for litigation is now larger than for research and development. None of these problems is a deep-seated cultural mark of decay. They are products of government policy. Different policies could easily correct them. But taking such steps means doing something that is hard and unpopular.
The genius of America's success is that the United States is a rich country with many of the attributes of a scrappy, developing society. It is open, flexible and adventurous, often unmindful of history and tradition. Its people work hard, putting in longer hours than those in other rich countries. Much of this has do to with the history and culture of the society. A huge amount of it has to do with immigration, which keeps America constantly renewed by streams of hardworking people, desperate to succeed. Science laboratories in America are more than half filled with foreign students and immigrants. Without them, America's leadership position in the sciences would collapse. That is why America, alone among industrial nations, has been able to do the nearly impossible: renew its power and stay at the top of the game for a century now. We can expand our science programs—and we should—but we will never be able to compete with India and China in the production of engineers. No matter what we do, they will have more, and cheaper, labor. What we can do is take the best features of the America system—openness, innovation, immigration and flexibility—and enhance them, so that they can respond to new challenges by creating new industries, new technologies and new jobs, as we have in the past.
Our greatest danger is that when the American public does begin to get scared, they will try to shut down the very features of the country that have made it so successful. They will want to shut out foreign companies, be less welcoming to immigrants and close themselves off from competition and collaboration. Over the past year there have already been growing paranoia on all these fronts. If we go down this path, we will remain a rich country and a stable one. We will be less troubled by the jarring changes that the new world is pushing forward. But like Britain after Queen Victoria's reign, it will be a future of slow, steady national decline. History will happen to us after all.
Monday, July 30, 2007
Cost of conflict
My brother is bring this book for me from Nepal .I will be posting my views after reading it .IF you have already read this book, views and analysis will be appreciated ....
The books that have come out since the ceasefire last year have all concentrated on the politically interesting period in Nepal’s history. But few authors have assessed the socio-economic impact of the armed conflict and recommend strategies for reconstruction.
In Nepal’s Conflict: A Micro-Impact Analysis on Economy, Bishwambher Pyakuryal, the economist and professor, and Rabi Shanker Sainju, program director at the National Planning Commission, fill this gap.
Aside from the loss of life, the country was beset by population displacement and political instability. The authors conclude that the impact of the conflict on the country’s economic growth has been much more serious than we previously imagined.
Nepal’s economy grew at 4.8 percent in 1995-96, but growth had plummeted to minus 0.3 percent in 2001-02. Even after the ceasefire last year, the economy has only bounced back by 2.5 percent. The authors zoom in on the impact of the conflict on Small and Medium Enterprises (SMEs) in Banke, Rupandehi, Kaski, and Sunsari districts as case studies and extrapolate their observations there to the entire economy.
SMEs are the largest employers in the non-manufacturing sector and have brought in 40 percent of all industrial investment in the country. Industries with fixed assets of not more than Rs 30 million are designated small while those with up to Rs 100 million are medium industries.
The share of SMEs, including micro, cottage and small industries, in the total industrial output is 70 percent. Similarly, the shares of SMEs in total industrial establishment and total industrial employment are 96 percent and 83 percent respectively.
The study (conducted between July-September 2006) found that the flow of Chinese products in local markets has had a strong impact on these manufacturers. For example, one plastic sandal factory in Rupandehi that could not compete with Chinese sandals had to close down.
The study points out that the overall problem being faced by the SMEs is related to production and market failures. The conflict destroyed not only physical infrastructure, but also human capital and tore apart the social fabric. This is likely to create instability in the short-run and lower growth in the medium-term, the authors say.
More ominously, the conflict destroyed business linkages and distribution channels of SMEs in previous market areas. Although after the ceasefire raw material availability was not a problem, the cost of raw materials and logistics increased significantly.
The authors warn that a post-conflict period is very sensitive to economic policies and will respond to them. So an over-emphasis on political reforms, elections and party politics eclipsing necessary socioeconomic policies may backfire on overall reform initiatives.
The book lays out projections for various development scenarios under the state of continued conflict and under peaceful conditions from 2005-06 to 2017-21. It makes recommendations to revive economy and generate employment in general and support the SMEs to grow, in particular.
A recent annual report published by the International Development Department of the University of Birmingham says that conflict and security are critical issues for the development community. “By destroying economies, infrastructure, and societies, conflicts’ impacts resonate long after the combatants have laid down their weapons,” the report says.
Pyakyural and Sainju’s book is a must read for students of Nepali politics as well as policymakers, and a timely warning not to sideline economics. Whoever is in power after the elections will have to address economic issues, otherwise stagnant production, and lack of job creation will continue to haunt politics for decades to come.
Bhagirath Yogi is a journalist with the BBC Nepali Service in London.
Nepal’s Conflict: A Micro-Impact Analysis on Economy Bishwambher Pyakuryal, Rabi Shanker Sainju 2007, pp 120, Rs 350
The books that have come out since the ceasefire last year have all concentrated on the politically interesting period in Nepal’s history. But few authors have assessed the socio-economic impact of the armed conflict and recommend strategies for reconstruction.
In Nepal’s Conflict: A Micro-Impact Analysis on Economy, Bishwambher Pyakuryal, the economist and professor, and Rabi Shanker Sainju, program director at the National Planning Commission, fill this gap.
Aside from the loss of life, the country was beset by population displacement and political instability. The authors conclude that the impact of the conflict on the country’s economic growth has been much more serious than we previously imagined.
Nepal’s economy grew at 4.8 percent in 1995-96, but growth had plummeted to minus 0.3 percent in 2001-02. Even after the ceasefire last year, the economy has only bounced back by 2.5 percent. The authors zoom in on the impact of the conflict on Small and Medium Enterprises (SMEs) in Banke, Rupandehi, Kaski, and Sunsari districts as case studies and extrapolate their observations there to the entire economy.
SMEs are the largest employers in the non-manufacturing sector and have brought in 40 percent of all industrial investment in the country. Industries with fixed assets of not more than Rs 30 million are designated small while those with up to Rs 100 million are medium industries.
The share of SMEs, including micro, cottage and small industries, in the total industrial output is 70 percent. Similarly, the shares of SMEs in total industrial establishment and total industrial employment are 96 percent and 83 percent respectively.
The study (conducted between July-September 2006) found that the flow of Chinese products in local markets has had a strong impact on these manufacturers. For example, one plastic sandal factory in Rupandehi that could not compete with Chinese sandals had to close down.
The study points out that the overall problem being faced by the SMEs is related to production and market failures. The conflict destroyed not only physical infrastructure, but also human capital and tore apart the social fabric. This is likely to create instability in the short-run and lower growth in the medium-term, the authors say.
More ominously, the conflict destroyed business linkages and distribution channels of SMEs in previous market areas. Although after the ceasefire raw material availability was not a problem, the cost of raw materials and logistics increased significantly.
The authors warn that a post-conflict period is very sensitive to economic policies and will respond to them. So an over-emphasis on political reforms, elections and party politics eclipsing necessary socioeconomic policies may backfire on overall reform initiatives.
The book lays out projections for various development scenarios under the state of continued conflict and under peaceful conditions from 2005-06 to 2017-21. It makes recommendations to revive economy and generate employment in general and support the SMEs to grow, in particular.
A recent annual report published by the International Development Department of the University of Birmingham says that conflict and security are critical issues for the development community. “By destroying economies, infrastructure, and societies, conflicts’ impacts resonate long after the combatants have laid down their weapons,” the report says.
Pyakyural and Sainju’s book is a must read for students of Nepali politics as well as policymakers, and a timely warning not to sideline economics. Whoever is in power after the elections will have to address economic issues, otherwise stagnant production, and lack of job creation will continue to haunt politics for decades to come.
Bhagirath Yogi is a journalist with the BBC Nepali Service in London.
Nepal’s Conflict: A Micro-Impact Analysis on Economy Bishwambher Pyakuryal, Rabi Shanker Sainju 2007, pp 120, Rs 350
When trade fades, so does the Karnali’s economy and social fabric
From l to r: Humla herdsmen cross the border bridge into Tibet with Nepali timber to barter for food and alcohol, mountain goats with salt on their backs arrive in Mugu. The traditional trade routes from Tibet and India into Nepal in the early 1950s.Canny Karnali traders therefore had extra rice from Achham and salt from Tibet. It seemed as dependable as the sunrise in the east—the land of salt was the north, Tibet, and the land of provisions was the Achham plains. It seemed as if the salt traders would tread this loop forever. The promises all parties involved made, the lengths they went to ensure trust and reliability created an aura around Tibetan salt that is evident even today. The Nyinbus of Humla still keep a wooden box full of old Tibetan salt in the most sacred room of their house dedicated to the family god. Humli Khampa people, who are now settled in Bajura are still reluctant to use the iodised salt distributed in Martadi. They continue to use salt from the Tibetan plateau. As a matter of course, the farmers from the south who barter their red rice and barley and salt traders in Tibet establish ritual friendships with people they deal with, sealed with a vow to Mt Kailash and the holy Manasarovar Lake. This pact on mutual objects of faith ensured there was no treachery or distrust. The parties make their promise before a heaped plate of rice symbolising Mt Kailash and water in a kalash (a ritual vessel) standing in for Lake Manasarovar. Then dai chamal achheta (yoghurt mixed with rice) is shared by the new ritual partners. Once such a friendship is established, it is believed both their bodies merge into one and the relation is as permanent that of Shiva and Parvati, lasting as long as there is snow on Kailash and water in Manasarovar. An economic transaction changed into a social one, adding new meaning to an exchange between peoples of two different religions and cultures. This economics of travel that arose from basic need put down roots like a wayward tree, penetrating every aspect of the lives of trading communities. Many of the resultant practices and phenomena took on a patina of natural, age-old phenomena and it was not until the caravans started slowly coming to a stop in the mid-1970s that they were revealed to be the centre of a vital web. What forced the change? Geo-political realities and the inexorable march of “development”. The Chinese arrived in the remotest parts of Tibet, India fought a war with China, Nepalis got more mobile—the country forged more roads and entered the jet, or at least chopper, age. Malaria was eradicated in the tarai, better health care and nutrition meant Nepal’s midhill population increased, and changing patterns of population and consumption resulted in deforestation and eventually community forestry in the middle hills. In the 1950s, with the Chinese presence in Tibet, the Bhotia, the Drogpa (Tibetan nomads) and the Taklakoti of Tibet, who barely knew what paddy and wheat looked like, started consuming rice and flour produced in China brought to them via the newly constructed highways on the high plateau. And so the land of salt also became a food supplier. The 1962 Sino-Indian war destroyed the traditional caravan trade between areas in western Nepal and bordering areas of Himachal Pradesh and Kumaon Garhwal in India. In Nepal, meanwhile, new roads and a malaria-free tarai ensured that iodised Indian salt started making inroads into the condiment market. As the Indian salt trade started from the small haat bazaars (multipurpose markets) in the tarai after the eradication of malaria in the 1930s, the trans-Himalayan caravans moved their base to the plains. The Thakalis settled in Butwal, the Khampas of Mugu in Surkhet and the Sauka of Darchula, who started running yak caravans in Mahendranagar. The Salt Trading Corporation started flying out iodised salt to the furthest reaches of the kingdom in an effort to combat goitre and cretinism. Wherever an airstrip was built, there was now a monetary alternative to the barter economy. The growing middle hill population started stripping forest cover and encroaching on public forest—making the denudation alarming enough for a community forestry programme to be implemented since the 1980s. This meant nomadic shepherds lost their customary rights to grazing grounds. After 1990, there was nothing to replace the traditional guarantee that caravans could use commons to camp or let their animals graze. Among the first casualties of this rapid change were the haat bazaars along the Nepal-Tibet border. They used to be held every alternate year on the Tibetan and Nepali sides. But after the 1950 Nepal-Tibet treaty, this became history. Haat bazaars in the tarai, on the other hand, were flourishing with Indian goods and iodised salt. Migrant western hill people could fill many of their needs more easily at the bazaars in the south than in the north. Initially, the caravans with Indian salt meant alternative business and increased employment. Caravan runners started transporting Indian salt from the tarai up to the middle hills. More haat bazaars were started. The caravans of Karnali, especially those from Humla, played an important role in the establishment of hill towns like Silgadhi in Doti, Sanphe Bagar, Bayal Pata, Kuchchi Binayak in Achham, and Martadi and Kolti in Bajura. The caravans didn’t just bring salt, but virtually every necessity. The Dadeldhura-Doti highway in the 1980s virtually wiped out the caravans. And when the Kohalpur-Banbasa highway was built, even the tarai haat bazaars dried up. And this was how salt started coming from the south and food from the north—once as unimaginable as a western sunrise. After the trade stopped, people had to negotiate all over again how they deal with land, livestock, food and each other. The impact has been devastating. Border villages like Chala, Chyaduk, Dojam and Nepka of Humla district and Mugal of Mugu district are among the worst-affected. Tibetan was the language of commerce, so they acted as interpreters for the Thakuri landlords, given responsibility of the weighing procedures by the Rana rulers. They were paid in flour and as their livelihood depended on border transactions, they did not own much land or have any established agricultural base. When the salt trade ran dry, they had nothing to fall back on. The caravan highway extended from Tibet to the tarai along the banks of the Karnali, the Seti and the Mahakali rivers. The open pastures were used by the caravans, and the sheep droppings were rich fertiliser. In Humla there was a system of collecting a royalty in exchange for allowing caravans the use of pastures. Now the market has dried up and the Humlalis have registered the pastures as private farms. With the yaks and sheep gone, they will have to find new ways to fertilise the soil. The change in the forestry act and lack of proper governance in recent years has led to a mass selling of sheep. Earlier honoured as a god of wealth, similar to the cow in Hinduism, sheep now fulfil the growing demand for meat, becoming the favourite snack in western Nepal’s growing urban areas. The urgency for border posts is obvious if you live in Humla. The biggest western Tibetan border town of Taklakot, adjoins Humla. When the caravans were still making their trips, Humlis were self-sufficient as far as food went, and the caravan used to supplement the scarce food supply in Taklakot. The Taklakot elite build up ritual friendships with their counterparts in Humla. When winter was around the corner, Taklakotis entered Nepal as far as Yalbang Chaur in Muchu Village District Committee to stock up on tito phapar (bitter buckwheat) flour, and bhuse jau (barley with a thick bark), which grows in Rodikot in Humla. Taklakot is now connected by road to other centres of supply, and the market, which also catered to Humla, does not function anymore. Humlis are now completely dependent on the Taklakot market for food supply and commodities. Because there is no checkpoint or customs post at the border in Hilsa, Humlis must now travel at their own peril and dogged by considerable harassment to inner Taklakot to buy their basic needs. The price? Deforestation and alcoholism. In Taklakot, Humlis pay for food with Nepali timber sold for as little as 7 Yuan (Rs 56) per kg. Worse, Humlis are sometimes forced to barter the wood for thope, the local alcohol. (See ‘Nepali timber to Tibet’, Nepali Times #17) The tradition of polyandry is also collapsing. The well-to-do Nyinba community, among others, had evolved a unique system of brothers dividing the caravan work equally amongst themselves and marrying a single wife. Since all the brothers’ earnings from different sources went to the wife and relations between all the husbands and the wife were equal, the families prospered. “A wife from a good family, water from a good spring”, goes a Nyinba saying. But now, as the sheep stocks are sold for meat, there are few or no pastures, the single wife will be married to many unemployed brothers. Many retired herders are now forced to take on a completely alien tradition: a single household with a sort of large joint family. In their old age some are settling down with individual wives and earning their livelihood running teashops and lodges in Simikot. Nyinba women who used to proudly wear along (traditional golden earrings), now line up in front of the Chief District Officer’s office with a coupon that entitles them to 5 kg of rice. And these are people who were earlier among the biggest salt traders of the upper Karnali. There is corruption and politics involved in the food coupons, tainting these straight-forward, honest and hard-working folk. One-third of the Himalayan region including Karnali once depended wholly on the caravan economy. Now, there is nothing to replace it. The Karnali is not the only region to be affected by these changes, but it is most desperate here. The people of the Karnali have been proud and self-sufficient for centuries. They don’t want handouts, they want a life of self-sufficiency and dignity. But the march of time, the encroachment of the outside world, and an uncaring faraway capital has forced them to speak out. And now that they are speaking out, the government considers them a nuisance. They are seeking their rights not as bohemian caravan runners romanticised in Oscar-nominated films, but as alert citizens of Nepal. All they are want is their dignity back.
Microfinance growing fast in South Asia: World Bank report
Micro-Finance movement has really taken off in South Asia. According to a recent World Bank report, microfinance today meets around 15 per cent of the overall credit requirements of low-income families. Bangladesh and Sri Lanka are leading the movement, while India falls under medium coverage category.
The report, ‘Microfinance in South Asia - towards financial inclusion for the poor’, notes that microfinance today reaches at least 35 million households in the region. However, the penetration and outreach of the sector varies greatly across the region.
The report classifies the six South Asian countries into high, medium and low coverage levels. Leading this movement are Bangladesh and Sri Lanka, where more than 60 per cent of the poor are served by this sector. Nepal and India (increasingly) fall in the medium coverage category, while Pakistan and Afghanistan have been classified as low-coverage countries.
Both countries with high levels of coverage have devised unique methods of making microfinance available to the poor. While in Bangladesh, the coverage is based on the programmes of a few specialised institutions, in Sri Lanka the high outreach is largely based on an extensive network of Community Based Organisations (CBOs), which receive substantial government subsidies.
In India, the recent spurt in microfinance activity can be attributed to the growth of self-help groups (SHGs) as well as non-governmental organisations and microfinance institutions. This, however, remains largely concentrated in the southern states.
According to Mathew Titus, executive director of Sa-dhan, while such World Bank reports are useful, they do not necessarily reveal the entire picture. For instance, while it is true that India is at a medium coverage level, we cannot ignore the fact that the microfinance sector here is driven by commercial borrowings unlike other countries where World Bank subsidised multilateral institutions dominate the sector.
“The Reserve Bank of India and the government have taken steps to develop this activity for the poor. It has been given a ‘priority sector’ status by the RBI, which makes it important for banks to lend to the sector. Further, community based institutions are pre-dominant here as well. The SHG-bank linkage gets aggregated at the community level,” adds Titus.
The report says that South Asia has every conceivable kind of microfinance activity. “Women form the majority client-base for microfinance in the region and the activity focuses on women even in societies like Afghanistan,” claims the report.
Sunday, July 29, 2007
BHANU BHATKA JAYANTI celebrated in FLORIDA
Non Resident Nepali celebrated Bhanu jyanti and Nepali literature in Florida .The funcation was organized by International Nepali Literary Society (INLS) Florida Chaptar .
Bhanubhakta Acharya is a luminous star of Nepali literature. He was an outstanding poet, who dedicated his entire life to enriching Nepali literature. Perhaps Bhanubhakta is the only littérateur of Nepali literature whose literary reputation has been well established both at home and in several parts of India.
Bhanubhakta’s life was not a bed of roses. He did face several trials and tribulations in his life, but nothing could deter him from his mission to contribute to the Nepali literature. He remained active throughout his life to enrich it. We can learn a lot from his life.
Bhanubhakta, son of Dhananjaya Acharya, was born in Chundi Beshi of Ramgha in 1814. This village lies in the Tanahun district in Gandaki zone. A voracious reader, he was quite a handsome boy but very different from his friends. He was not interested in sports and preferred to be always alone. Nevertheless, he had immense love and interest in nature and he could communicate with it. Later on, when he began writing poetry, he was truly inspired by nature.
Bhanubhakta was a prolific writer. He had such creative ability that he could even turn general conversation into a melodious poem. This kind of talent is very rare in any human being but he had such ability right from childhood. He wrote many poems but, unfortunately, today we do not have all of this writings. In fact, we have lost most of his exclusive poems. It has been assumed that Bhanubhakta wrote a lot of poems between 1769 and 1846.
As a young poet, Bhanubhakta went to India once to buy books and to meet his old literary camaraderie. He spent a few months in Banaras and then returned to Kathmandu. When he arrival, he was overwhelmed by Kathmandu’s beauty. He was fascinated at seeing beautiful temples, neat and clean streets, exclusive handicrafts, big markets, crowds of people, beautiful houses and palaces etc.
The beauty of Kathmandu had captured the very heart and soul of the young poet. He at once decided to reside in Kathmandu to pursue a career in writing. One of his friends came out to help him who made an arrangement to stay in a room in the house of Dharmadutta, a famous astrologer at that time. He came in touch with many learned people of Kathmandu. They were all acquainted with the writings of each other and it directly, or indirectly, benefited Bhanubhakta.
While staying in Kathmandu, Bhanubhakta was informed of a lawsuit against him at his village. He had to get back to his village, Ramgha, as early as possible. It was only at his village where he learnt about the lawsuit.
His neighbour, Giridhari Bhat, had never liked Bhanubhakata or his poems from the very beginning. Giridhari was also a drunkard and gambler. On many occasions, Bhanubhakta had done his best to show Giridhari the right path and had tried to persuade him to stay away from such bad company and look after this wife and children. But Giridhari had not paid any attention to Bhanubhakta’s advice.
It was Giridhari, who had made a petition at the court demanding that he get his land back from Bhanubhakta. Giridhari said Bhanubhakta had taken his land by force. The poet talked to Giridhari and tried to reach a compromise with him. But Giridhari refused to make reconciliation. Then Bhanubhakta decided to face the charges before the court.
Bhanubhakta returned to Kathmandu and once again got down to his work. He had no job that could fetch him regular income in Kathmandu. His friends managed a job for him in the accounts department of Shri-3 commander-in-Chief General Krishna Bahadur Junga Rana in 1835. His new job fetched him a handsome salary that kept him afloat. Now, Bhanubhakta dedicated himself to writing poetry. Everything was all right when all of a sudden something went terribly wrong. Unfortunately, Bhanubhakta failed to submit official accounts in time. He was accused of embezzlement that put him in a prison for five months.
His every effort to prove himself unaccountable for the embezzlement of official money turned out to be in vain when he was finally incarcerated. In fact, Bhanubhakta’s reputation was tainted but still he was confident that one day he would be released with dignity and the real culprit would be caught.
Bhanubhakta wrote poems even in prison. One day he asked for a pen and a piece of paper and a guard brought them to him. He then wrote a poem to the Shri-3 Commander- in-Chief who called for his release from the prison.
Bhanubhakta wrote and compiled Ayodhyakanda, Kiskindha Kanda and Sunder Kanda when he was in prison. In the same year he had to perform Bartabandha of his son, Ramnath.
He wrote another letter to Rana, requesting him to allow him to do the Bartabandha of his son. This time he succeeded in convincing Rana and ordered for his release for one week so that he could perform his son’s Bartabandha. He performed the Bartabandha and then returned to Kathmandu to complete the remaining days in prison. During his stay in prison, he also wrote Youdha Kanda and Uttara Kanda, thus he completed the Ranayana in verse form. Bhanubhakta wrote Bhaktamala and Prashnotara thereafter. In 1836 Bhanubhakta wrote another book of verse called Badhusikchha.
Due to his very poor health, he was unable to write at all, so he called his son to write the translation for him. Bhanubhakta dictated, and Ramnath wrote down, what his father told him; finally the translated work was finished. Bhanubhakta died in 1868.
If we look into Bhanubhakta’s writings, we find that he had made a careful choice of words while writing poems, which are simple, lucid, and easy to understand.
Bhanubhakta is honoured with the title Aadi Kavi (the first poet), who has occupied an outstanding place in the Nepali literature no other littérateurs have ever attained.
Saturday, July 28, 2007
WB threatens to pull out of financial sector reform
The World Bank (WB) has warned that it would stall all assistance related to the financial sector reform programme if there is no 'satisfactory' improvement in Nepal Bank Limited (NBL) within one month and the expert management team at the bank is not restored, reports Kantipur daily.
In her letter to the finance secretary Bidhyadhar Mallik Thursday, WB's Nepal country director Susan Goldmark has given the government time till 21 August for this. The letter says that if the two pre-conditions stated in the letter are not fulfilled by that time then all assistance related to financial sector reform would be suspended.
As per this, the WB would suspend grants and loans amounting to Rs 10 billion ($150 million). It has also threatened of suspending budgetary support programme.
Citing dissatisfaction over the union activities and lack of cooperation from the central bank, ICCMT, an Irish/Scottish consulting firm that had been handling the management of troubled Nepal Bank Limited (NBL) for the last five years, unilaterally terminated the management contract on July 22. The team announced its decision after the NRB had agreed to extend its contract by six months as against its demand for 18 months extension.
The WB said in the letter that since NRB has not taken necessary measures to ensure effective control over NBL as required by the agreement signed in June 2004, the government would not be able to make further withdrawal of assistance unless the management contract with ICCMT is extended for a six-month period.
In the letter WB has also alleged that Nepal Rastra Bank (NRB) failed to create a conducive environment for the operation of the NBL and has asked for "decisive action satisfactory to the WB to restore the operational autonomy of the NBL management team."
The WB has recommended convening a meeting of all parties, including the finance ministry, NRB, the consulting firm and the WB before the departure of the one remaining consultant.
WB has also made it clear that following a six month extension for ICCMT, the government is free to hire a professional management team for NBL, foreign or local, but with at least one expatriate as either CEO or chief credit manager.
However, the team needs to have qualification and terms of reference acceptable to the WB and should be hired as per the procurement procedures agreed between Nepal and the WB, said the letter.
Meanwhile, on Friday, the NRB appointed a new management team at the NBL. The three member team is led by NRB director Dr. Binod Atreya and includes Laxmi Prapanna Niraula and Numnath Poudel.
nepalnews.com ag July 28 07
In her letter to the finance secretary Bidhyadhar Mallik Thursday, WB's Nepal country director Susan Goldmark has given the government time till 21 August for this. The letter says that if the two pre-conditions stated in the letter are not fulfilled by that time then all assistance related to financial sector reform would be suspended.
As per this, the WB would suspend grants and loans amounting to Rs 10 billion ($150 million). It has also threatened of suspending budgetary support programme.
Citing dissatisfaction over the union activities and lack of cooperation from the central bank, ICCMT, an Irish/Scottish consulting firm that had been handling the management of troubled Nepal Bank Limited (NBL) for the last five years, unilaterally terminated the management contract on July 22. The team announced its decision after the NRB had agreed to extend its contract by six months as against its demand for 18 months extension.
The WB said in the letter that since NRB has not taken necessary measures to ensure effective control over NBL as required by the agreement signed in June 2004, the government would not be able to make further withdrawal of assistance unless the management contract with ICCMT is extended for a six-month period.
In the letter WB has also alleged that Nepal Rastra Bank (NRB) failed to create a conducive environment for the operation of the NBL and has asked for "decisive action satisfactory to the WB to restore the operational autonomy of the NBL management team."
The WB has recommended convening a meeting of all parties, including the finance ministry, NRB, the consulting firm and the WB before the departure of the one remaining consultant.
WB has also made it clear that following a six month extension for ICCMT, the government is free to hire a professional management team for NBL, foreign or local, but with at least one expatriate as either CEO or chief credit manager.
However, the team needs to have qualification and terms of reference acceptable to the WB and should be hired as per the procurement procedures agreed between Nepal and the WB, said the letter.
Meanwhile, on Friday, the NRB appointed a new management team at the NBL. The three member team is led by NRB director Dr. Binod Atreya and includes Laxmi Prapanna Niraula and Numnath Poudel.
nepalnews.com ag July 28 07
Friday, July 27, 2007
Caste and Education in Nepal
An interesting study by the World Bank on educational achievement in Nepal is reported in the very-informative, highly-commendable blog of Freidrich Huebler (hat tip to the resourceful Bayesian Heresy). Nepal is poor: GDP per head is around $300, secondary school attendance is 30% (less than 1 in 3 kids attend secondary school), primary school attendance is 74% and life expectancy is 60 years. It is a country with an overwhelming Hindu majority, clearly stratified into dozens of hereditary, mutually-exclusive groups, called castes: the Brahman caste (priests and scholars) ranks top, followed by the Kshatriya (rulers and warriors), Vaishya (merchants), Sudra (peasants and manual workers), and the Dalits (untouchables). The following tables from Huebler show clear disparities in school attendance across castes/ethnic groups
Here are Hueber’s explanations:
At the level of the country as a whole, the primary school NAR [Net Attendance Rate] is 73.5 percent. Children from Brahman, Chhetri, and Newar households have the highest NAR values, between 86.8 and 93 percent. The lowest primary school net attendance rates are observed among Muslims (32.1 percent) and Tarai Dalits (37.5 percent). Hill Dalits (primary NAR 73.5 percent) are much more likely to attend school than Tarai Dalits. This difference in school participation can be explained by the fact that Dalits from the hill zone of Nepal are more integrated into society and therefore less subject to discrimination than Dalits from the southern tarai.
Explanation:
Secondary school net attendance rates in Nepal are shown in Figure 3. Overall, 30.9 percent of all Nepali children of secondary school age attend secondary school. The pattern of disparity is similar to that at the primary level of the education system. NAR [Net Attendance Rate] values are highest among children from Newar, Brahman, and Chhetri households, ranging from 44.6 to 52.3 percent. Tarai Dalits (secondary NAR 7.2 percent) and Muslims (7.9 percent) are least likely to attend secondary school. Similar to the primary level, Hill Dalits have a net attendance rate that is twice as high as that of Tarai Dalits…To build an equitable and inclusive society, and to reach the Millennium Development Goal of universal primary education, it is necessary to design policies that aid Muslims, Tarai Dalits, and other disadvantaged groups in Nepal.
Nobel-laureate, George Akerlof has asked the following question: why do social norms persist, despite their incompatibilities with urbanisation and development? His answer: it’s because the costs for an individual member of society of deviating from the social norms (becoming an outcaste) exceeds the benefits of staying within the norms. He takes the example of outcastes in India, who face the following costs: (1) “can only do scavenging (or other polluting) jobs,” (2) “cannot eat with caste members (including parents and siblings), touch them, touch their food,” and (3) “their own children will be also outcastes and will suffer the same prohibitions.”
Akerlof concludes that “if the punishment of becoming an outcaste is predicted to be sufficiently severe, the system of caste is held in equilibrium, irrespective of individual tastes, by economic incentives; the predictions of the caste system become a self-fulfilling prophecy…economic rewards may favor those who follow prevailing social custom; and in so doing, they give economic reasons why such social customs may endure.“
Another economist, Evan Osborne, argues that the caste system perpetuates itself for a political reason: in a country where the government is corrupt and/or is rent-seeking, citizens, eager to capture their share of the rent, are driven to organising themselves into pressure groups. And the most ‘efficient’ way to create a pressure group is through caste membership, as the latter is easily identifiable and fail-safe (it is not possible for a non-caste member to pass on as a caste member). Thus, according to Osborne, it is possible to find a society where, as economic development increases the size of the cake available for sharing, caste identity matters more and more in politics, though it may become less and less important in commerce.
Akerlof’s and Osborne’s views have different policy implications. For Osborne, eliminate corruption and rent-seeking, and the caste system will crumble. For Akerlof, it is more deeply rooted in individual incentives and can only weaken if the punishment for being an outcaste is reduced.
The rupee, Asia's strongest currency against the dollar this year
“Cultural platitude is only one aspect of Nepal’s neighborly entanglements. More pervasive are economic domination and political influence of India. Landlocked Nepal has always remained a market for India. The shackles were somewhat loosened with Nepal’s joining of the Universal Postal Union in the 1950s, and currency autonomy achieved in the 1960s. However, the fact that today 25 percent of the Nepali market has Indian currency circulation indicates well the vulnerability of Nepal’s monetary situation.”- Dr Harka Gurung- march 2001)
Nepal does not have the direct peg adjustment relationship with Dollar but can instigate through Indian Currency .According to “The Economist”-weekly magazine published from London .Indian rupee has appreciated by nearly 10% since late 2006. Indian currency deparitated steady for almost a decade from 1993 to 2003 . Dropping from an average annual rate of Rs31.37:US$1 in the 1993/94 fiscal year (April-March) to Rs48.40:US$1 in 2002/03, The Appreciation of IC against the US dollar has also made NC stronger against dollar which is not natural.Nepal cannot sustain being pegged to the Indian currency anymore..it is a small country and does not have (and should not waste what it has) enough foreign reserve.
Nepal does not have the direct peg adjustment relationship with Dollar but can instigate through Indian Currency .According to “The Economist”-weekly magazine published from London .Indian rupee has appreciated by nearly 10% since late 2006. Indian currency deparitated steady for almost a decade from 1993 to 2003 . Dropping from an average annual rate of Rs31.37:US$1 in the 1993/94 fiscal year (April-March) to Rs48.40:US$1 in 2002/03, The Appreciation of IC against the US dollar has also made NC stronger against dollar which is not natural.Nepal cannot sustain being pegged to the Indian currency anymore..it is a small country and does not have (and should not waste what it has) enough foreign reserve.
Poverty, Social Divisions and Conflict in Nepal
A case study by
Lakshmi Iyer
An assistant professor in the Business, Government and the International Economy unit at Harvard Business School.
This is an interesting paper .which basically concludes that the reason behind the People’s war in not caste system or social polarization but poverty and low level of economic development,
http://www.hbs.edu/research/pdf/07-065.pdf
Lakshmi Iyer
An assistant professor in the Business, Government and the International Economy unit at Harvard Business School.
This is an interesting paper .which basically concludes that the reason behind the People’s war in not caste system or social polarization but poverty and low level of economic development,
http://www.hbs.edu/research/pdf/07-065.pdf
WHAT NEXT
I was pub crawling from durbarmarg to Thamel with my Amercian born and raised Nepali cousin .A Steet kid around 9 year old who was euphoria high from glue sniffing was lying down in the side walks .My cousin with a moist eyes and a heavy throat looked at me and said“Its real.Its like in the post card ”.He took out this SLR camera from his back pack and started caputraing this price less movement .After walking a few sec he pointed at this huge pink building with christmas light,fenced all around and asked me what was it ? I told him it’s the king’s palace .When we reached thamel ,we were in the hunt for pubs with happy hours offering .On the way we saw kathmandu digital genertation teen ageers fully loaded with high tech mp3 players and cells phones, gangster style hip-hop dress up, fancy bikes vrooming down the streets and getting the beast out of there 750 cc toys. Some sipping there Carmel lattés, hogging there double Decker sundaes in a balcony of a hip café and enjoying the night life of Thamel, Some queuing out side the ATM machines. MY cousin asked me “How come some people have so much and some so little?”
Since the unification of Nepal, King use to take all the political, economical and social decision. From 1846 to 1950 all the immediate power of the king was literally eliminated by the Rana prime ministers. During the entire Rana regime there was almost a negligible social economical development. In 1854 A.D., Jung Bahadur Rana, the first Rana prime minister of Nepal, promulgated the Mulki Ain - Nepal's indigenous legal system. Society was divided into castes like Brahmins and the Kshatriyas, the scholars and the warriors, were placed on top, while Tharus were at the bottom of the social hierarchy. The land they owned in the terrain plains was distributed among army generals and government officials, uprooting the community and making them landless. When in April 16th, 1853.The first train ran in India. East India company started expanding there railway networks to northern Indian state of Uttar paradesh and Bihar .Large amount of hard woods were exported to India for the construcation of the railways tracks .Revenue collected where dircetly send to the rana admistators ,common public didn’t get a small piece from that huge pie . Kathmandu in that time was the financial hub for tibeatan and Indian traders . Mawari from india started settleing in Nepal for trade and commerce ,Rana admistators backed them up for the gift shower they use to get in return. Rana lobbites were given more pirortity then the comman people of Nepal for trade.
The family reign of Ranas which brutally raped economically and socially the people of Nepal for 104 years ended in 1950.By that end Rana family owned emeses amount of the real Estes and properties in the country .They started businesses in India by establishing a family relationship with royal Rajput of India. With the help of NEPALI congress party and Independent India, King was established as the head of state. The first census of 1951 mathematically signifies that out of a total population of 8.2 million people only 2% percent were literate. After the first general election of 1959, the Birta
Abolition Act was amended which decrease the power of the local land lords throughout the kingdom. In early 60’s king Mahendra sacked the government and abolished multiparty democracy and injected a new system in Nepal, a party less pachayat system. Though Nepal was not any more socially isolated form rest of the world and foreign aid started poring in Nepal .Nepal did not make any significant economical growth which eventually lead to economical crisis in 1960. Due to the huge amount of foreign aid flowing in to the country .The poor people were addicted to foreign aid. “In a troubled environment, with violence, frequently changing governments, coups d’Etat, riots, etc., aid may hardly .contribute to growth.” (Chauvet, Guillaumont, 2002) . Project funded by aid were limited to Katmandu valley and the constituency of the key players in the government. In 1968 only hand full Nepali had a privilege of first class world standard of living, mostly bourgeois of Nepal (Shahs and Ranas).Statistical analysis done in 1969 computes a horrifying result which shows more than 95% of Nepalese population was living below the poverty level. The centralized development of the Panchyati system led to massive inequalities among padhis and madishes. Unbalanced economic growth was evident from Mechi to Mahakali, (east and west, hill and plain areas).Economy moved in the same sluggish pace for 30 years with increasing gap between rich and poor.
The fall of the Berlin wall in November 1989, Ignited the sprit of democracy and capitalism Through out the world .The people of Nepal also celebrated there self own democracy in 1990 .Then came the Pajero and parado era much worse than the suppression of Shahs and Rana . Corruption was running in the veins of politicians, INGOS and International donors .Nepal started being the political play ground of western countries and emerging nations. Millions of dollars had already flowed in threw loans, grants and foreign aid but there was a weak sign of developments. Nepal faced considerable political instability and governments have been short-lived since 1991, there have been 12 governments in as many years.
In 1996 “People’s War” had spread with an attack on a police post at Halleri in Rolpa district of Western Nepal. The root cause for the breeding of Maoist revolution in the reason were poverty ,Under development , Long standing grievance against royal family .Till 1973 main cash crop for the farmers in the under developed western Nepal was hashish . It is believed the 37th president of united state Richard Milhous Nixon with his recently formed Drug Enforcement Administration offerred new king Birendra 65 millon dollar to out law hashish and marijuna use in Nepal. Which caused economical crisis for the farmers.Studies show that the region with more development and less poverty has suffered less in the same period . In February 2005, in the face of growing attacks by Maoist activists, King Gyanendra Dismissed the Prime Minister, placed major political figures under arrest and seized power.This move and the subsequent curtailment of civil liberties in Nepal was sharply criticized by
Several nations, including the United States and India. In September 2005, the Maoists declared
a unilateral cease-fire, which was reciprocated by the government. The Maoist activistsbegan talks with seven major political parties in November 2005 in an attempt to present acommon front against the monarchy. In April 2006, King Gyanendra gave up absolute power and called on the seven-party coalition to designate a Prime Minister and organize elections.
WHAT NEXT ?????????????????????????????????
Since the unification of Nepal, King use to take all the political, economical and social decision. From 1846 to 1950 all the immediate power of the king was literally eliminated by the Rana prime ministers. During the entire Rana regime there was almost a negligible social economical development. In 1854 A.D., Jung Bahadur Rana, the first Rana prime minister of Nepal, promulgated the Mulki Ain - Nepal's indigenous legal system. Society was divided into castes like Brahmins and the Kshatriyas, the scholars and the warriors, were placed on top, while Tharus were at the bottom of the social hierarchy. The land they owned in the terrain plains was distributed among army generals and government officials, uprooting the community and making them landless. When in April 16th, 1853.The first train ran in India. East India company started expanding there railway networks to northern Indian state of Uttar paradesh and Bihar .Large amount of hard woods were exported to India for the construcation of the railways tracks .Revenue collected where dircetly send to the rana admistators ,common public didn’t get a small piece from that huge pie . Kathmandu in that time was the financial hub for tibeatan and Indian traders . Mawari from india started settleing in Nepal for trade and commerce ,Rana admistators backed them up for the gift shower they use to get in return. Rana lobbites were given more pirortity then the comman people of Nepal for trade.
The family reign of Ranas which brutally raped economically and socially the people of Nepal for 104 years ended in 1950.By that end Rana family owned emeses amount of the real Estes and properties in the country .They started businesses in India by establishing a family relationship with royal Rajput of India. With the help of NEPALI congress party and Independent India, King was established as the head of state. The first census of 1951 mathematically signifies that out of a total population of 8.2 million people only 2% percent were literate. After the first general election of 1959, the Birta
Abolition Act was amended which decrease the power of the local land lords throughout the kingdom. In early 60’s king Mahendra sacked the government and abolished multiparty democracy and injected a new system in Nepal, a party less pachayat system. Though Nepal was not any more socially isolated form rest of the world and foreign aid started poring in Nepal .Nepal did not make any significant economical growth which eventually lead to economical crisis in 1960. Due to the huge amount of foreign aid flowing in to the country .The poor people were addicted to foreign aid. “In a troubled environment, with violence, frequently changing governments, coups d’Etat, riots, etc., aid may hardly .contribute to growth.” (Chauvet, Guillaumont, 2002) . Project funded by aid were limited to Katmandu valley and the constituency of the key players in the government. In 1968 only hand full Nepali had a privilege of first class world standard of living, mostly bourgeois of Nepal (Shahs and Ranas).Statistical analysis done in 1969 computes a horrifying result which shows more than 95% of Nepalese population was living below the poverty level. The centralized development of the Panchyati system led to massive inequalities among padhis and madishes. Unbalanced economic growth was evident from Mechi to Mahakali, (east and west, hill and plain areas).Economy moved in the same sluggish pace for 30 years with increasing gap between rich and poor.
The fall of the Berlin wall in November 1989, Ignited the sprit of democracy and capitalism Through out the world .The people of Nepal also celebrated there self own democracy in 1990 .Then came the Pajero and parado era much worse than the suppression of Shahs and Rana . Corruption was running in the veins of politicians, INGOS and International donors .Nepal started being the political play ground of western countries and emerging nations. Millions of dollars had already flowed in threw loans, grants and foreign aid but there was a weak sign of developments. Nepal faced considerable political instability and governments have been short-lived since 1991, there have been 12 governments in as many years.
In 1996 “People’s War” had spread with an attack on a police post at Halleri in Rolpa district of Western Nepal. The root cause for the breeding of Maoist revolution in the reason were poverty ,Under development , Long standing grievance against royal family .Till 1973 main cash crop for the farmers in the under developed western Nepal was hashish . It is believed the 37th president of united state Richard Milhous Nixon with his recently formed Drug Enforcement Administration offerred new king Birendra 65 millon dollar to out law hashish and marijuna use in Nepal. Which caused economical crisis for the farmers.Studies show that the region with more development and less poverty has suffered less in the same period . In February 2005, in the face of growing attacks by Maoist activists, King Gyanendra Dismissed the Prime Minister, placed major political figures under arrest and seized power.This move and the subsequent curtailment of civil liberties in Nepal was sharply criticized by
Several nations, including the United States and India. In September 2005, the Maoists declared
a unilateral cease-fire, which was reciprocated by the government. The Maoist activistsbegan talks with seven major political parties in November 2005 in an attempt to present acommon front against the monarchy. In April 2006, King Gyanendra gave up absolute power and called on the seven-party coalition to designate a Prime Minister and organize elections.
WHAT NEXT ?????????????????????????????????
Tuesday, July 24, 2007
Nepal's budget gift makes Indian firm happy
KATHMANDU: A tax concession offered by Nepal's new budget and the government's efforts to bolster security for industries have appeased Indian company Aarti Strips Pvt Ltd that has given up its plan to leave the country and relocate in India and elsewhere.
Aarti Strips, a venture in which India's Bhushan group has a stake of nearly Nepali Rs.3 billion, became one of the biggest manufacturers of corrugated steel sheets in Nepal after it began operations in Biratnagar city in eastern Morang district in 2002.
Aarti, one of Nepal's largest forex earners with its annual turnover of around Rs.6 billion, had announced that it would pull out of Nepal due to the worsening security situation and an export tax.
"We produce about 100,000 tonnes yearly, about 87 percent of which is exported to Assam and Bihar," said Rosit Unnithan, general manager at Aarti.
"However, Nepal used to levy a half percent tax on the sale price, which made us lose nearly Rs.2-3 million," Unnithan said.
In addition, industries in Nepal, particularly in the southern plains, were also hit by rising extortion by a growing number of new armed groups, frequent shutdowns and labour trouble as the Maoist-affiliated unions began vying with the other unions for supremacy.
Finance Minister Ram Sharan Mahat had expressed concern at Aarti's announcement that it would exit Nepal.
Subsequently, when Mahat tabled the new budget for 2007-8 earlier this month, the export tax was scrapped.
"This year, our turnover will increase to around Rs.6.5 billion," Unnithan said. In addition, the government has also announced the formation of an industrial security force to ensure safety to beleaguered companies.
The Morang inspector-general of police has called a meeting with industry representatives to discuss the deployment of Armed Police Force.
The waiving of export tax as well as the establishment of an industrial security force has been hailed by other industrialists from the region.
Jagdish Rathi, former president of Morang Trade Association, was reported as saying that the deployment of security forces, especially along the highways, would boost Nepal's ailing industries
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