Transitional Economy

-BP BADAL

Money is what that money does. Money is the reward of laborious hard work. Money is not everything but it is something for daily requirements. Scarcity of money creates opportunities to earn more and its abundance shows the channels of expenditures. Both the situations are favorable for economic growth, as we know absence of Laxmi (wealth) is greater than her presence because she teaches so many lessons in her absences.

            Due to the unbearable pain and uncertainty of transition period, country is suffering from different socio- political problems. These problems have directly affected the Nepalese economy. It is felt in market that the smooth flow of cash is diminishing due to the series of strikes and bands. Such horrendous situation is very close to misbalance the social harmony and integration.  Denizens are clashing with denizens in unnecessary issues of different ethnicity and identity. In this 21st century democracy and equality is the fundamental right that no one can cease it.  Ultimate bottom line to sketch justice or injustice among different groups should measure on the balance of democracy as if the constitution will be for the people and by the people. Identity is not right it is a capacity. It is not political debate but it is related with deeds and activities to be a good citizen.

            It is not a time to demand integrated but extended Nepal.  Diplomatically, our leaders must be able to return our motherland back from India in Sugauli treaty.  Our house is burning in spite of settling it we are fighting for this and that room among brothers. Nobody knows when and where the band is called. The organizers themselves do not know the demand of Band. Normal life is seriously crippled.  Loss of hopes and frustrations are prevailing everywhere. Economic activities are in stagnant. Strikes have disgruntled the pace of economic performances pushing the country in crises. At present Nepal has to suffer 1.5 billion per day. It has also seriously affected the share market on Nepse index.

            The government had projected 4.5 % growth and inflation in 7% but this situation obviously influence adversely.  Due to the strike and sufficient flow of input materials cost of production of industries are increasing an in other hand peoples purchasing power is decreasing.  As the banks and financial institutions are reluctant to invest in country's development projects, they are not being able to mobilize their deposits where as banks' daily expenditures are increasing. From this reason, the flow of cash in market is limiting, people and investors are reluctant until May 27.  It has directly affected government's development projects, foreign investments and Nepal Investment Year 2012/13.

            As our political leaders are seriously working out to promulgate the constitution on stipulated timeline, our foreign diplomatic missions are highly active and in this busy schedule of leaders, they were able to meet our leaders.  What types of suggestions they provided to our leaders would be the relevant questions at this time. Meanwhile American Ambassador Scott H. De Lissi was appeared in a program, ' The Nepali Economy – Challenges and Potential' organized by Nepal Economic Forum. Mr. DeLisi has recommended few noteworthy economic tips on transitional journey with lots of optimistic parameters.  Nepal must be able to address the right policies and leadership for the next decades that the opportunities to get double-digit economic growth will not far.  Transitions are always tough but Nepal can go through this. It has three major economic challenges.

            Firstly, Nepal has to integrate its economy in worldwide arena. It has to start the competition with the regions like with Lakhnaw, Patna, Lasha, Calcutta, including Beijing and Delhi for new market and new opportunities.  It must carefully think about its competitive advantages in today's globalized economy. It has to be hanging free as a yam or sandwiches between two neighbouring economic giants for seeking new economic opportunities. We have to think and act logically not emotionally. Diplomatically we should be able to raise our issues clearly. Secondly, we are in Investment year 2012/13 and trying to attract foreign investments. From those investors' perspectives, they want stability and predictability in economic policies and regularities in decision-making. Investors always look alternatives so they are watching Bangladesh, or Cambodia, or Burma, or Uganda along with Nepal.  Therefore, Nepal must be able to create conducive and reliable environment inside the country to promote the business and economic activities. At least Nepal should be the best among other developing countries. Our leaders must think to create confidence to investors and assurance of their capital payback. Finally, we must adopt modern business culture, we must perceive profits, investments and capitals are positive terms that are essential for economic development. We have to adopt global business environment.  Business needs professional business managers and transparency in accounting system.  Our labour unions must work to promote business and welfare of workers not for political parties. Stability of domestic labour market is also very important issue of emerging investors in Nepal.

            The turning point of Nepali history on 27 May is approaching. If optimisms work, Nepal will get her long awaited constitution to prevail peace everywhere. After the statue leaders has to finalize the deadline of general election to end the volatile transition.  At this critical time, they must set an example to the world that after South Africa Nepal is a successful country, even though constitution is just an agreement of power sharing and division.  Actually, constitution should be in culture, norms, and values Just a paper does not work. Optimum utilization of resources with scientific allocation and economic development Nepal can change her face in new Nepal.  Federalists have not concentrated on its resource share and allocation among states. Nepal has achieved what Nepal has to achieve from political revolution, it is a crucial time to plunge into economic revolution. It is possible by making a common platform of Delhi and Beijing in Kathmandu as a transit point of trade rejecting all kind of master slave mentality.  Nepal has to break the relation of fixed rate of exchange between IRS and NRS. Nepalese economists can calculate demand and supply of foreign currencies to fix the currency rate.  Nepal must be able to safe her currency. The whole country is not dependent on monetary policy how federal units  will be independent and sustainable?