Nepali Times Asian Paints
ARTHA BEED
Economic Sense
Action Asia


ARTHA BEED


The last two weeks have seen a frenzy of activity in the region-India-Pakistan cricket diplomacy, Indo-China trade, US and India opening up skies for unlimited flights, Burma's emergence as a potential hydropower source and Bhutan readying for a new constitution to embrace the market economy. Whew.

Nepal is sandwiched between India and China which seem ready to set aside their political rivalry to become the world's largest trading partners over the next two decades. The idea is to beat Sino-US trade volumes and the way these two economies are growing, there's little doubt that's where they are headed. These two territorially minded powers will even sacrifice their border disputes at the altar of economic growth.

In the midst of all this is Nepal. We can either hitch our wagons to these two locomotives or shunt ourselves to a siding. Surely, we have the advantage of geography. There must be some goods and services we can sell to both. The growing economies of our neighbouring giants create wealthier people. This could be an opportunity for us to become an offshore financial centre, a haven to manage money, like Luxemborg.

Things are more complicated between India and Pakistan. But even here, there is tremendous bilateral business potential. Pakistan will soon have to find some other way to keep its army engaged if Kashmir is resolved. India and Pakistan need to conduct direct businesses because the costs of re-routing products into markets have skyrocketed.

Oil prices and projections provided by international consultants suggest that we need to work on alternative energy resources. This will mean that Bangladesh gas and Burma hydro could become potential sources. With India running to don the mantle of the regional energy player, there is a lot of visible activity. Discussions on Nepali hydro will of course remain an issue but we have missed opportunities before and will continue to miss them because the perception of loss of sovereignty carries more weight than the actual amount hydropower stations can earn.

India opening up its skies to US airlines adds a new dimension to travel, tourism and therefore economics in the region. It is one of those steps that will spur new avenues of growth. We can limit these discussions to seminars or take pro-active steps to cash in on this development. America is now going to be a one-hop flight from Nepal: how are we going to cash in on this?

The growing middle class in both India and China is pushing their governments to think beyond politics. They realise that as the composition of vote banks change, market economy will be the focus, not subsidies or free meals. For us, it's never too late to start all over again.


LATEST ISSUE
638
(11 JAN 2013 - 17 JAN 2013)


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