Nepali Times
Strictly Business
Private sector and conflict


Wednesday's declaration by Maoist Supremo Prachanda to end the ceasefire may have played like pre-Dasain music to the those who earn their keep by selling arms and military supplies. But for the majority of businesses across Nepal, the news is as cheerful as a funeral dirge as they ready themselves to shell out a monthly "revolutionary tax" to the Maoist rebels.

Leaving the failure of the third round of negotiations to political analysts, let us take a step back, survey the scene and, in this changed context, see what challenges lie ahead for business leaders. For 104 years, the Ranas kept the country locked up from the outside world, before being overthrown by leaders who had seen the world outside of Nepal. Despite its cache of foreign-educated technocrats, the nationalist Panchayat system that followed attempted to impose political uniformity, and preach the mantra of self-reliance and the so-called "Nepal-compatible system". But that too buckled down under the forces of democratic pluralism in 1990.

Through the ensuing 12 years of multiparty democracy, there was a robust growth in political pluralism. But, alas, that was accompanied by relatively little growth in economic opportunities for Nepalis, tens of millions of whom are young, illiterate, unskilled and desperately poor. The successive elected governments, headed by ambivalent socialists and communists, hemmed and hawed their way through economic reforms by consolidating power in Kathmandu and other urban centres, accumulating wealth for themselves and their allies. They utterly failed to strengthen institutions that should have taken its mandate from the law and not from the whims of ministers on rotation.

Meantime, Kathmandu's dominantly left-oriented intellectuals and the so-called members of the civil society, with their predictably knee-jerk distrust of market forces, did not help matters by being ideologues who aligned themselves along party-political lines. The overall result was such that by 1996, there was democracy in Nepal-if you defined it strictly through the number of freely elected politicians and other multiparty activities. But there also was a pervasive sense that something was not quite right as elected politicians failed repeatedly to convince the rising number of disenchanted, disgruntled and dispossessed citizens that their grievances were legitimate and then to set out to use the existing democratic apparatus to directly address those concerns.

Ignorant, arrogant and bereft of any sense of urgency, elected politicians neglected their very customers-the voters-who, in turn, started to find the uncomplicated and true-sounding messages of the Maoists more to their liking. Later, as the Maoists started to gather numerical momentum, young people across Nepal were increasingly left with only two choices-be a card-carrying member of the Maoist movement or leave the village. Though the peace talks early this year brought some hope, the current situation, with cries of war blaring over the quietly desperate wringing of hands, is no better than where Nepal was a year ago.

In this context, the challenge for those who see themselves captaining Nepal's private sector are two fold: first, they must cast aside narrow, vested interests to think hard and lay out a conceptual alternative to Maoist economics for all to see and compare. And second, they must push the government to use what's left of the democratic framework to integrate more areas of Nepal's economy, in terms of both infrastructure and information. Else, I fear that in coming days, our captains of industry will be reduced to mouthing the same old mind-numbingly dull lectures on peace and conflict-resolution in some donor-funded seminars while Nepali businesses literally go up in flames.

(11 JAN 2013 - 17 JAN 2013)