Nepal's abysmal economic performance is often linked to its geography: 'India-locked' on three sides with China on its north. However, being landlocked does not necessarily destine countries to poverty. While not having direct access to the sea does have its disadvantages, there are plenty of opportunities as well. Take Switzerland or Dubai for example.
Often compared to Nepal for its size, natural beauty, and geography, Switzerland with a population of about eight million ranks 19th in terms of GDP. It has exploited its comparative advantages by exporting high value goods like watches and specialised goods and services like dairy products and banking.
Dubai, on the other hand, has transformed itself from a desert city into a microcosm of globalisation and markets itself with this unique tagline: bring your money to Dubai, no questions asked. With its modest oil reserves (expected to dry up within the next decade), which account for only 15 per cent of the state's income, Dubai adopted a blue ocean strategy of resurrecting its trading links and has quickly become one of the most sought after destinations for immigrant labour from South Asia and Africa.
The latest national census released by the Central Bureau of Statistics last week shows that around two million Nepalis migrate abroad for employment each year. And if figures, including unofficial ones, are to be believed these workers, constituting 10 per cent of the population, contribute about a quarter of the national economy. Over time, export of human resources has unconsciously become the single biggest revenue earner for the country.
However, there has been very little effort to understand the migration sector and develop it systematically. Why not export developed human resources with the target of drawing them back in the future? Global HR trends have changed and traditional staffing has given way to temporary staffing called 'temping'. Organisations are hiring knowledge workers for projects lasting from two to 15 months.
The Indian temping industry alone stands at IRs 172 billion and there is a growing demand in the IT and engineering sectors, FMCG (fast-moving consumer goods), retail, banking, and finance. If Nepal can value add and methodically feed its professional and general workers as temps in such international firms in India and other South Asian countries, not only will it be a revenue spinner, but this exposed labour force will have increased employability and will be more likely to turn into small entrepreneurs when transitioned back to Nepal.
This could be a good way to enhance entrepreneurship in a country where small time aspirants line up to various social venture funds for seed capital. However, all this requires a change in our mindset, an increased willingness to take risks, and trade off job security for international exposure and a better future.
We might not have mass production potential as China, but we have some homemade high-end products like Pashminas, rugs, khukri knives, speciality cheese and now adventure gears and wristwatches to flaunt. Despite the political chaos, tourism still remains our biggest selling point and Nepali hospitably still defines our brand equity.
We lack well-linked, economically viable value and supply chains in Nepal, but the country can certainly become a value chain partner for various high-end international brands. For instance, niche high-end products like Sherpa Adventure Gear and Kobold watches have exploited the Himalayan charm very well. Kobold, a renowned US watch company has set up a workshop in Nepal, assembling Himalayan Everest edition watches, the dial of which is made up of a piece of rock collected from the summit of Mount Everest (each watch sells for around $ 15,000).
Nepal has also been a popular MICE (meetings, incentives, conferences, and exhibitions) destination for our Indian neighbours especially for weddings. The first tier Indian cities might have lost interest in Nepal, but we still have the attention of the second tier cities.
Like Switzerland, Dubai and various African countries, Nepal needs to find alternative revenue sources as a means of lessening its dependence on foreign aid, which will eventually dry up. From being landlocked it should move towards creating a blue ocean and stop competing in areas where it has no comparative advantage. It can overcome its poor economic track record by identifying a viable 'brand' that is not determined by political manipulation. With its natural charm, Nepal has the potential to shape trends and become a key business partner for many advanced economies. However, this requires determined leadership and direction.