Nepali Times
Economic Sense
Historical blunderers


As the hotel strike drama unfolded, one thing was very clear- we Nepalis do not require a foreign hand to make matters worse in our country.

Historically, when we look at the progress made, we have been rather efficient at self-destruction. The Malla kings left us with empty coffers, and the Rana regime followed it up by building palatial neo-classical structures during a crippling famine. Thirty years of one-party democracy ensured the creation of an economic class at the cost of a backward mass. We've never needed the services of a Genghis Khan or a colonial superpower to cause economic imbalance, we have done it well ourselves. What else could explain the mess in the tourism industry in the past month? We obviously love to remain a $200 per capita country ranked first or second from the bottom, and we have politicians who believe this is the future.

The effects of the past week on tourism in Nepal will be felt in the long run. Other Asian destinations competing with Nepal today, like Vietnam and Laos, could not cash in on tourism due to perceived problems of security and uncertainty. Now they've overcome these problems and are marketing their countries well, while Nepal is saddled with such disrupt ion that tourists will think twice before visiting. The impact on Western tourists forced to change plans or Indian tourist here on honeymoon is the same. Why should they come to Nepal again?

The government's lackadaisical attitude and indecisiveness kept the problem simmering until the damage was done. The Prime Minister gave verbal assurances to the business community that he'd look into the matter, but everyone knows what that means. The trade sector cannot see how this problem won't recur after two months. On the other hand the government has asked labour unions to defer the stir by two months. The government cannot keep both commitments and only time will reveal all the complications.

After the restoration of democracy, the labour force and the media are two sections of society that have grown. The empowerment of labour through legislation and active inter-national intervention has given this country a lop-sided socialistic model.

Though the transformation from government owned enterprise to private enterprises has taken place, the labour model remains the same. A powerful pro-labour media has backed this. Politicians have also recognised the labour class as a powerful vote bank and like to keep them happy. The business segment making the most money doesn't have to deal with unions, as their businesses are trade-oriented. This has left a handful of entrepreneurs to bear the brunt of labour unions' tactics. Hotels, being an industry and not a trading enterprise, have been affected most. They have bowed to pressure from unions and conceded a lot in the past decade without being able to push issues linked to productivity and efficiency.

The past week should be a billion-dollar lesson for the country. The issue is not the service charge. It is the state of the nation. It is a state of anarchy where anyone, anytime, can undo what others have built over years. Politicians here exist for their own petty agendas, not for the country or enterprise. There would be no labour without enterprise. The government should know how to regulate enterprises but not hinder them. Yes, enterprises too should act well in time to understand a problem rather than wait till the end. But no one listens in this country.

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(11 JAN 2013 - 17 JAN 2013)