Nepali Times
Economic Sense
New year revolutions


One Big Lesson of 2007 for us was that a country doesn't necessary get its economy back on track just because a conflict is over.

The peace dividend is a mirage if mal-governance persists as it has here. Our political mess, the reason for the conflict in the first place, is still there. The established political parties just got back to pre-2002 business-as-usual.

The only thing different this time is that the Maoists have joined the lot and they have just demonstrated they are no less short-sighted and narrow-minded than the other six parties.

Power brokering in 2007 was at its peak and briefcase trading was SOP to get government jobs as well as juicy contracts. Perhaps, the parties should agree that they can disagree all they want about power, but they should all agree on the economy. Whoever comes to power has to grapple with that as a priority, after all. Learn from the victory of Narendra Modi in Gujarat that long term political future is about giving the people an economic environment of growth.

Yes, the year did have its good sides. The Nepal Stock Exchange went on a bull run, and let's just hope the bull doesn't gore too many people when it runs amok because of insider trading. The Nepali lotto mentality is at the fore once again as people have started to visit the stock exchange to bet on shares rather than go TO the casinos even though there is a law against allowing Nepalis in there. So even by going to the casino we are breaking the law.

Real estate prices, already high, have gone ballistic as pahadis from the tarai sell their land and move up to Kathmandu and Pokhara. In the absence of strong regulation of apartment buildings and housing projects, real estate developers are mushrooming. The oversupply of commercial space in Kathmandu will surely see some banks getting into trouble in 2008.

Tourism and the airlines are doing well and let's hope NAC's demise when it comes won't be too painful. The trouble is that the credibility of Nepali international operators are at par with NAC.

Manpower companies made good money in 2007 and will continue to do so. The educational consultancy businesses that even find placements in Liberia for Nepali students will make more fast bucks in the year to come. So will embassies issuing visas and consultants who can broker visa issuance.

The serpentine queues at gas stations demonstrate the mood of the Nepali economy: no one cares. The government doesn't care and the public accepts this incompetence. In any other country there would be fuel riots by now.

Hydropower licenses have been marking time for over a year, and many prospective investors have got tired of waiting and lost interest. The other important issue would remain how to rein the psuedo-militiant workforce that is continuously used by political parties for their own ends. The intent of the Maoist to really see a prosperous Nepal can only be demonstrated if they let enterprises function and workers work without being coerced, threatened or brainwashed. If Nepal wants to see foreign investment, then apart from the rhetoric of nationalist capitalist and other nebulous terminology, the labour issue needs to be seriously resolved.

The donor and development community have remained mere spectators in 2007. They have ensured that Nepal still remains the highest per-capita seminar and workshop country in the world.

The private sector has not been able to capitalise on opportunities presented to itself in the transition probably due to lack of good leadership. It should look for innovative ways to intervene in policy building and economic activities. There are enough banks and finance companies, we have only promoters but few ideas for new investments to create jobs.

(A blog has been added to

(11 JAN 2013 - 17 JAN 2013)