Kathmandu: Doug Bandow, a Senior Fellow at the Cato Institute, speaks about economic freedom and why Nepal should also not curtail it.

London: The Middle East Symposium focuses mainly on why countries should pursue reforms else run the risk of losing out in the global race for economic supremacy.

Scotland: The G8 urges countries to open up their economies more, emphasising on the direct correlation between poverty reduction and economic freedom.

Beijing: Condoleeza Rice tells Chinese leaders to pursue the path of economic freedom.

Studies have shown there is direct correlation between economic freedom and economic growth. The collapse of the Soviet Union and the state of eastern European economies as well as that of most African countries demonstrate this adequately.

Economic freedom also has direct correlation with the system of governance. Again, studies have suggested that countries which pursue pluralism in their political structure provide more economic freedom. The perusal of economic freedom mandates least interference from the state and that happens best perhaps in a democratic political structure. With plural political forces, there is constant check on the government in power.

In South Asia, we have seen that democratic India has more economic freedom than military-ruled Pakistan. That perhaps also explains the economic growth of India outstripping Pakistan. Academia has always locked horns in the debate of whether China with its single party rule might lose its momentum of economic growth to India which has more political freedom.

Nepal's experiment with freeing parts of control on the economy in the early 1990s did lead to positive results. The GDP growth rates early in the decade were good but as the momentum on reforms dwindled, the growth rates fell. While the insurgency can be held responsible for lower growth rates, lagging off on reforms was more of a factor. In Sri Lanka the state has been engaged in domestic warfare for the past two decades but has still managed to keep growth rates steady. Sri Lanka's continuous pursuance of reforms and loosening of state control was the reason for sustained growth.

This Beed believes economic freedom integrates a large part of the informal economy that never converts to the mainstream formal economy. For instance, allowing money transfer firms to compete for remittance from abroad has brought remittances under the legitimate economy that was otherwise languishing in the hundi trade. However, not allowing Nepalis to invest abroad legitimately has kept the hundi business going. Opening this in a regulated manner would surely provide better returns to the tons of foreign exchange sitting on state coffers.

So, repeat after me: curtailment of economic freedom has always proved detrimental to a nation's economic growth and economic freedom is directly correlated to political freedom.