Nepal goes to extreme lengths to articulate its xenophobia—be it foreign products or foreign nationals, the policies that the Government routinely comes up with or fails to amend, clearly shows the country’s reluctance in accepting globalization. A quick look at the new draft of Foreign Direct Investment policy shows how our perception is still dominated by Hinduism’s hierarchal aversion to trade. Foreigners cannot buy land/property in Nepal, there are too many hindrances for them to get involved in businesses and there is lack of security for any firm to thrive—our country has been successful at keeping investors (both national and international) at bay.
The idea that open trade will bring in foreign businessmen who would bleed the nation dry of its monetary resources is not new. Our economically healthy neighbors held similar skepticism and they feared foreign trade until a few decades back. Up until 1978, China was completely isolated from world trade and majority of its population suffered. The economic reformation started after 1978 whereby many state owned enterprises were privatized, entrepreneurship was encouraged. After joining the World Trade Organization (WTO) in 2001 foreign investors were welcomed and the economy soared in an unprecedented level and today China is the fastest growing economy producing things cheaply than anywhere else in the world. It is amazing to think that much of it was made possible with foreign investors. In 2013 alone, China was able to attract USD 117.6 billion in foreign direct investment.
Bordering us is also India, another giant in the world economy. Like China, India had retrogressive economic policies that kept foreign investors out until 1991. But with economic liberalism investors poured in; new businesses came about; and collaborations like Maruti-Suzuki, Hero Honda and so on were introduced in the market. As a result the economy soared like never before peaking at 9% in 2007. Information technology boomed in India in the early 90s and since then has grown continuously contributing USD 100 billion to the Indian GDP in 2012. Statistics aside, what these developments meant for the general Indian public is more interesting—for the first time ever, people had enough goods and services to choose from, poverty decreased unlike ever before, innovations brought about products that the majority of the population could afford, massive modern jobs followed the agricultural revolution and lives became much more comfortable.
Contrary to the belief that many people in Nepal hold liberal policies in India and China benefitted the natives rather than just a handful of foreign businessmen. India started manufacturing products targeting the local markets; the innovations brought about amazing products like Tata Nano, the cheapest car ever which gave the opportunity for millions of people in India to own a car; competition in the technological sector gave rise to cheap smart phones that spread like wildfire to most parts of the country providing internet access to many; even international publishing companies like Penguin and Vintage publications started operating in India which not only cleared paths for Indian writers to go international easily but the comparatively cheap cost of publication made books cheaper and more accessible to a huge chunk of the population.
Our xenophobia also stems out of the fact that we adore and respect our culture and we perceive the inevitable changes that would follow open trade and globalization as serious threats to our culture and tradition. This is a misguided view. Culture is dynamic, we change and our traditions change with us but the fact that we are Nepalese will not be threatened by use of foreign products or by interacting with foreigners or by continuously adapting our culture and bringing in foreign trends to decide what fits in at an individual level in a world where even the smallest of personal events are connected to the bigger picture in unforeseeable ways.
Humans have an incredible ability to adapt. The example of McDonalds coming to India shows how one’s culture and traditions are not easily distorted; people feared that McDonalds would change Indian people, especially the young ones who would start consuming beef as almost all McDonalds meat products are made from cows. However, it was the international chain that had to adapt. Selling Big Macs with a thick beef patty was out of the question in a Hindu dominant society; so instead, they served chicken and vegetable burgers. Obviously, McDonalds made a lot of money in India but they received it for the services that Indians were happy to purchase and they had to change to fit with the local culture and not the other way around. Also, Indian food chains started competing with the international ones which in turn flourished entrepreneurship at the local levels.
Some changes of open trade and globalization are visible in Nepal too—more people have mobile phones than access to toilets at present, products from all over the world can be bought here, people have more information on the changes taking place in different parts of the world. But the problem is that we have not been able to contribute much in the process. We have been spectators in the changing process and unlike China and India we have not been able to encourage and exploit vast resources that WTO membership has made accessible for us.
Our government has been running major industries and corporations for as long as we can remember and yet has not been able to deliver anything substantial and to cover the continuous loss it makes, the burden has fallen to the already hapless citizens. Heavy taxes are levied on anything that the government deems a luxury, be it a car, a bike or a bottle of beer. The general Nepali people suffer due to the incompetency of our government in the form of taxes and to entertain and use the poor services provided. It is ridiculous that though people are willing to and are able to pay for services like electricity and drinking water, the service providers have not been able to deliver. It’s high time that the illusive dream of prosperity be realized by following the method that all prosperous places have followed—remove bureaucratic red-tapism in trade.
Think about it, you and I could be living a more comfortable life in Nepal right now if multinational corporations made investments here. People respond to incentives and investments would come wherever profits are viable. Take NCELL for example which broke the monopoly that Nepal Telecom had over cellular services. Because of better deals provided by NCELL, Nepal Telecom had to improve its game too and we, as consumers got better services in return and thousands of jobs were created in Nepal though foreigners hold more than 80% of shares in NCELL. That competition brings out the best in competing parties is true in all sectors.
Economic prosperity is possible only through trade and it is long overdue that we liberalize our policies to encourage it. We have to let go of our xenophobia and make it easier for anyone willing to invest in Nepal because average Nepali people will be in the receiving part of the deal.