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‘Economic crisis, political solution’

Tuesday, November 24th, 2015
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Former commerce secretary Purushottam Ojha, former Vice Chair of National Planning Commission Shankar Sharma and facilitator Sujeev Shakya at the talk program. The event was jointly organised by Alliance for Social Dialogue and Nepal Economic Forum.

Experts at a talk program in Kathmandu on Tuesday stressed the need for a political solution to an economic crisis that has adversely affected Nepal.

Former commerce secretary Purushottam Ojha and ex-Vice President of National Planning Commission Shankar Sharma urged the government and Madhesi Morcha to find a political solution to a political crisis, which has adversely impacted Nepal’s economy over the last three months.

“We should not further delay in diversifying our trade, and we must also raise issues of India’s economic blockade at international forums like World Trade Organisation (WTO),” said Ojha. “But these are long-term strategies.  We urgently need a political solution to the ongoing economic crisis.”

Ojha added: “When we imported fuel donated by China, we realised how difficult trade across the Himalaya would be without developing necessary infrastructure. We must promote trade with China in the long run, but that cannot be an immediate solution to the crisis which we are now reeling under.”

Ojha also asked Federation of Nepalese Chambers of Commerce and Industry (FNCCI) to lobby with Federation of Indian Chambers of Commerce and Industry (FICCI) to put pressure on New Delhi to lift the blockade. “FNCCI and FICCI use their joint economic council as a forum to sort out trade issues,” he said. “This council must be used to lobby for lifting the blockade, too.”

Sharma stressed the need for sustained efforts to ensure food and energy security, but said political solution was the best way out of the present crisis. “The April-May earthquakes made 700,000 Nepalis poor, and this economic crisis might push even more people below the poverty line,” he said. “We urgently need a political solution. And when things get to normalcy, we must start working towards trade diversification.”

It has been three months after Madhesi Morcah began a street movement in the country’s southern plains against Nepal’s new constitution. After the constitution was promulgated on 20 September, India also backed the Morcha by imposing a trade embargo against the land-locked Himalayan country.

Economists say the damage done by the Morcha’s agitation and India’s blockade to Nepal’s economy is bigger than that caused by the April-May earthquakes. The government has already lost Rs 30 billion in revenue so far, and the Rashtra Bank has warned of negative economic growth and double-digit inflation.

Ojha says the government has lost Rs 2.17 billion in petrol and diesel revenues alone in the last three months. “If we factor in income of petroleum dealers and transporters, this figure could go up to Rs 2.88 billion,” he says. “Our formal economy is losing this money to informal economy, which will have long-term economic impacts.”

At the talk program jointly organised by Nepal Economic Forum and Alliance for Social Dialogue, Janakpur-based economics professor Surendra Labh, Birganj-based youth entrepreneur Ajaya Pradhananga and Saptari-based journalist Bhola Paswan shared their experiences about how the Madhesi movement and India’s blockade have affected economic activity in the Tarai.

“People are giving up hope, and they want to flee the country,” said Labh. “If something has kept economy afloat in the Tarai, it is remittance.”

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9 Responses to “‘Economic crisis, political solution’”

  1. Srivastava on Says:

    Just returned from Kathmandu to Delhi, here are my impressions of Nepal.
    Nepali government and media had one huge success, in convincing the hill population about the so called Indian blockade, for the rest, Nepali lies of Indian blockade have no takers in the world.

    Resistance to egalitarian democracy, thus violating Madhesi rights, by rendering them 2nd class citizens perpetually, and hiding all this behind the rhetoric of Indian blockade to me displays a cynical political leadership, with no commitment to either democracy, equality, rule of law or minority rights nor any commitment to the future of Nepal. Political greed, self interest, politics of identity, petty interest, and political jockeying for power look more like politics of Nepal. In addition gross incompetence is staggering, example being trying to Import fuel from China, the proverbial digging well for water when the house is already on fire.

    I return from Nepal disappointed in the political leadership, and as much as one wants that India should not interfere in Nepal, Nepal continues to behave like a child who needs to be scolded for his own good.

  2. Bunty on Says:

    The Blind Communist Parties of Nepal, in their over excitement to please their masters in China, went over board. Day in and day out Anti Indian comments are coming out and Pro China activities are being encouraged. My question to the people of Nepal is this. Are the Madhesi people not Nepalis. What they are asking is correct. Why is Nepali Govt only bothered in the Hill People who have become slaves of China.

  3. namah on Says:

    @srivastava: you attitude says it all: ‘child who needs to be scolded…’ Look who is talking? Destroyer of kashmir, north east, sri lanka and baiter of maoists and muslims? perpetual 2nd class citizens? like the tribals of India?

    you have amir khan who wants to leave india…did you see the reaction to that? which proved the very thing – intolerance – he was talking about? guess who came to support him? AR Rehman.

    Where only Hindus are safe now – India – that too right wing nuts – really needs to take pause before judging others.

    Politicians are politicians all over – US, Nepa, India. Don’t judge the people by that yardstick. Even I can talk about Raj Thackarey and generalise for all marathis.

  4. namah on Says:

    @bunty? what pro china activity? what are madhesis asking? do you even know the basics.

  5. Srivastava on Says:

    Nepali elite are unwilling to give up their feudal privileges. This requires lowering the status of Madhesi population in the constitution. Attempts to mask this dirty game of defending their corrupt vested interests with anti India, propaganda is politically unsustainable. This has and will lead to further political unrest, and deterioration of security environment in the region.

    India is left with no choice in face of this intransigence by the Nepali elites. A small elite with power of propaganda can not be allowed to violate human rights and risk security environment. Willingly or unwillingly, India will need to act, and India must act.

    India needs to help Nepal build egalitarian democracy, a democracy that is responsive to the poverty, rights and needs of all Nepalis equally.

  6. namah on Says:

    India should address the plight of its ‘ tired, poor, and huddled masses yearning to breathe free, the wretched refuse of your its society, the homeless, tempest-tossed, (with apologies to Emaa Lazarus.

    I remain amazed at the Indian’s gumption to preach on democracy, poverty, rights and needs. You are either blissfully ignorant of India social stratification or assume that Nepalis have remained under the rock for the past 5000 years.

    FYI…so that I don’t waste time…I am an Indian. I have lived and travelled from shore to shore…mountain to mountain…valley to valley…ghetto to ghetto…city to city…please don’t BS to me. Certainly don’t BS here.

  7. Ravi Raj Kaur on Says:

    When you see the result of 25 years of politics in young men and women, in the elderly….good boys take a 7000 rupies job. Who in Europe would get out of bed for that? To work in a shop yes. Monthly fee not hour.
    The endless queues for gas, for kerosene, for petrol. AND the humiliations in the embassies of better countries.
    There is no need for politics it is just hotel school management, every household some gas bottle some electricity and OPEN SCHOOLS.
    At this stage it hardly matters to be right. My guess? People will vote next time ANY thing but the current.
    There are so many not included wonderful people, where did the bunch of gruesome came from?

  8. Nepal-China trade * Rolpa News ::.. on Says:

    […] The Indian blockade amplified the voice for trade diversification, but the Department of Roads (DoR) has not shown any sense of urgency to repair the Rasuwa road. “At least the narrow sections must be widened and the damaged parts repaired,” says local businessman Kumar Karki. “Otherwise, it would be difficult to import goods from China.” […]

  9. P. P. Vista on Says:

    Nepal’s growth and development will come through the Himalayas. Tibet is an example. If we join hands with India, we will learn how to defecate in the open. India is decades behind China. China should be our key trading partner in the days ahead. Let us open the doors for trade with China and meet our demand for essentials. We can only graduate from a least developed country to a developing country only when we join hands with with China. India’s hidden agenda is its eye on our hydro to boost its economy. Other issues –be they tarai protests or Madhese fiascos — are India’s deceptive tactics. The agitating Madheses are unelected junks dancing to the tune of Narendra Modi. Nepal cannot succumb to such deceptive tactics. Unfortunately, this is the stark reality but for the Madhesis, it is bitter to shallow.

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